Cosponsors:
Representatives Stebelton, Blessing, Terhar, Hollington, Adams, J., Adams, R., Amstutz, Anielski, Antonio, Baker, Barnes, Blair, Boose, Boyd, Brenner, Bubp, Buchy, Butler, Combs, Conditt, Damschroder, Derickson, DeVitis, Duffey, Gardner, Garland, Grossman, Hackett, Hagan, C., Hall, Hayes, Henne, Hill, Hottinger, Johnson, Kozlowski, Landis, Letson, Maag, Martin, McGregor, Milkovich, Newbold, O'Brien, Peterson, Roegner, Rose, Rosenberger, Ruhl, Schuring, Sears, Slaby, Slesnick, Sprague, Stinziano, Szollosi, Thompson, Uecker, Winburn, Young Speaker Batchelder
Senators Schaffer, Beagle, Bacon, Balderson, Coley, Eklund, Faber, Hite, Hughes, Jones, LaRose, Lehner, Obhof, Oelslager, Patton, Sawyer, Tavares, Wagoner, Widener
Sec. 5747.01. Except as otherwise expressly provided or | 11 |
clearly appearing from the context, any term used in this chapter | 12 |
that is not otherwise defined in this section has the same meaning | 13 |
as when used in a comparable context in the laws of the United | 14 |
States relating to federal income taxes or if not used in a | 15 |
comparable context in those laws, has the same meaning as in | 16 |
section 5733.40 of the Revised Code. Any reference in this chapter | 17 |
to the Internal Revenue Code includes other laws of the United | 18 |
States relating to federal income taxes. | 19 |
(6) In the case of a taxpayer who is a beneficiary of a trust | 44 |
that makes an accumulation distribution as defined in section 665 | 45 |
of the Internal Revenue Code, add, for the beneficiary's taxable | 46 |
years beginning before 2002, the portion, if any, of such | 47 |
distribution that does not exceed the undistributed net income of | 48 |
the trust for the three taxable years preceding the taxable year | 49 |
in which the distribution is made to the extent that the portion | 50 |
was not included in the trust's taxable income for any of the | 51 |
trust's taxable years beginning in 2002 or thereafter. | 52 |
"Undistributed net income of a trust" means the taxable income of | 53 |
the trust increased by (a)(i) the additions to adjusted gross | 54 |
income required under division (A) of this section and (ii) the | 55 |
personal exemptions allowed to the trust pursuant to section | 56 |
642(b) of the Internal Revenue Code, and decreased by (b)(i) the | 57 |
deductions to adjusted gross income required under division (A) of | 58 |
this section, (ii) the amount of federal income taxes attributable | 59 |
to such income, and (iii) the amount of taxable income that has | 60 |
been included in the adjusted gross income of a beneficiary by | 61 |
reason of a prior accumulation distribution. Any undistributed net | 62 |
income included in the adjusted gross income of a beneficiary | 63 |
shall reduce the undistributed net income of the trust commencing | 64 |
with the earliest years of the accumulation period. | 65 |
(7) Deduct the amount of wages and salaries, if any, not | 66 |
otherwise allowable as a deduction but that would have been | 67 |
allowable as a deduction in computing federal adjusted gross | 68 |
income for the taxable year, had the targeted jobs credit allowed | 69 |
and determined under sections 38, 51, and 52 of the Internal | 70 |
Revenue Code not been in effect. | 71 |
(11)(a) Deduct, to the extent not otherwise allowable as a | 84 |
deduction or exclusion in computing federal or Ohio adjusted gross | 85 |
income for the taxable year, the amount the taxpayer paid during | 86 |
the taxable year for medical care insurance and qualified | 87 |
long-term care insurance for the taxpayer, the taxpayer's spouse, | 88 |
and dependents. No deduction for medical care insurance under | 89 |
division (A)(11) of this section shall be allowed either to any | 90 |
taxpayer who is eligible to participate in any subsidized health | 91 |
plan maintained by any employer of the taxpayer or of the | 92 |
taxpayer's spouse, or to any taxpayer who is entitled to, or on | 93 |
application would be entitled to, benefits under part A of Title | 94 |
XVIII of the "Social Security Act," 49 Stat. 620 (1935), 42 U.S.C. | 95 |
301, as amended. For the purposes of division (A)(11)(a) of this | 96 |
section, "subsidized health plan" means a health plan for which | 97 |
the employer pays any portion of the plan's cost. The deduction | 98 |
allowed under division (A)(11)(a) of this section shall be the net | 99 |
of any related premium refunds, related premium reimbursements, or | 100 |
related insurance premium dividends received during the taxable | 101 |
year. | 102 |
(b) Deduct, to the extent not otherwise deducted or excluded | 103 |
in computing federal or Ohio adjusted gross income during the | 104 |
taxable year, the amount the taxpayer paid during the taxable | 105 |
year, not compensated for by any insurance or otherwise, for | 106 |
medical care of the taxpayer, the taxpayer's spouse, and | 107 |
dependents, to the extent the expenses exceed seven and one-half | 108 |
per cent of the taxpayer's federal adjusted gross income. | 109 |
(c) Deduct, to the extent not otherwise deducted or excluded | 110 |
in computing federal or Ohio adjusted gross income, any amount | 111 |
included in federal adjusted gross income under section 105 or not | 112 |
excluded under section 106 of the Internal Revenue Code solely | 113 |
because it relates to an accident and health plan for a person who | 114 |
otherwise would be a "qualifying relative" and thus a "dependent" | 115 |
under section 152 of the Internal Revenue Code but for the fact | 116 |
that the person fails to meet the income and support limitations | 117 |
under section 152(d)(1)(B) and (C) of the Internal Revenue Code. | 118 |
(d) For purposes of division (A)(11) of this section, | 119 |
"medical care" has the meaning given in section 213 of the | 120 |
Internal Revenue Code, subject to the special rules, limitations, | 121 |
and exclusions set forth therein, and "qualified long-term care" | 122 |
has the same meaning given in section 7702B(c) of the Internal | 123 |
Revenue Code. Solely for purposes of divisions (A)(11)(a) and (c) | 124 |
of this section, "dependent" includes a person who otherwise would | 125 |
be a "qualifying relative" and thus a "dependent" under section | 126 |
152 of the Internal Revenue Code but for the fact that the person | 127 |
fails to meet the income and support limitations under section | 128 |
152(d)(1)(B) and (C) of the Internal Revenue Code. | 129 |
(12)(a) Deduct any amount included in federal adjusted gross | 130 |
income solely because the amount represents a reimbursement or | 131 |
refund of expenses that in any year the taxpayer had deducted as | 132 |
an itemized deduction pursuant to section 63 of the Internal | 133 |
Revenue Code and applicable United States department of the | 134 |
treasury regulations. The deduction otherwise allowed under | 135 |
division (A)(12)(a) of this section shall be reduced to the extent | 136 |
the reimbursement is attributable to an amount the taxpayer | 137 |
deducted under this section in any taxable year. | 138 |
(14) Deduct an amount equal to the deposits made to, and net | 154 |
investment earnings of, a medical savings account during the | 155 |
taxable year, in accordance with section 3924.66 of the Revised | 156 |
Code. The deduction allowed by division (A)(14) of this section | 157 |
does not apply to medical savings account deposits and earnings | 158 |
otherwise deducted or excluded for the current or any other | 159 |
taxable year from the taxpayer's federal adjusted gross income. | 160 |
(15)(a) Add an amount equal to the funds withdrawn from a | 161 |
medical savings account during the taxable year, and the net | 162 |
investment earnings on those funds, when the funds withdrawn were | 163 |
used for any purpose other than to reimburse an account holder | 164 |
for, or to pay, eligible medical expenses, in accordance with | 165 |
section 3924.66 of the Revised Code; | 166 |
(17) Deduct the amount contributed by the taxpayer to an | 180 |
individual development account program established by a county | 181 |
department of job and family services pursuant to sections 329.11 | 182 |
to 329.14 of the Revised Code for the purpose of matching funds | 183 |
deposited by program participants. On request of the tax | 184 |
commissioner, the taxpayer shall provide any information that, in | 185 |
the tax commissioner's opinion, is necessary to establish the | 186 |
amount deducted under division (A)(17) of this section. | 187 |
(18) Beginning in taxable year 2001 but not for any taxable | 188 |
year beginning after December 31, 2005, if the taxpayer is married | 189 |
and files a joint return and the combined federal adjusted gross | 190 |
income of the taxpayer and the taxpayer's spouse for the taxable | 191 |
year does not exceed one hundred thousand dollars, or if the | 192 |
taxpayer is single and has a federal adjusted gross income for the | 193 |
taxable year not exceeding fifty thousand dollars, deduct amounts | 194 |
paid during the taxable year for qualified tuition and fees paid | 195 |
to an eligible institution for the taxpayer, the taxpayer's | 196 |
spouse, or any dependent of the taxpayer, who is a resident of | 197 |
this state and is enrolled in or attending a program that | 198 |
culminates in a degree or diploma at an eligible institution. The | 199 |
deduction may be claimed only to the extent that qualified tuition | 200 |
and fees are not otherwise deducted or excluded for any taxable | 201 |
year from federal or Ohio adjusted gross income. The deduction may | 202 |
not be claimed for educational expenses for which the taxpayer | 203 |
claims a credit under section 5747.27 of the Revised Code. | 204 |
(20)(a)(i) AddSubject to divisions (A)(20)(a)(iii), (iv), | 209 |
and (v) of this section, add five-sixths of the amount of | 210 |
depreciation expense allowed by subsection (k) of section 168 of | 211 |
the Internal Revenue Code, including the taxpayer's proportionate | 212 |
or distributive share of the amount of depreciation expense | 213 |
allowed by that subsection to a pass-through entity in which the | 214 |
taxpayer has a direct or indirect ownership interest. | 215 |
(ii) AddSubject to divisions (A)(20)(a)(iii), (iv), and (v) | 216 |
of this section, add five-sixths of the amount of qualifying | 217 |
section 179 depreciation expense, including a person'sthe | 218 |
taxpayer's proportionate or distributive share of the amount of | 219 |
qualifying section 179 depreciation expense allowed to any | 220 |
pass-through entity in which the
persontaxpayer has a direct or | 221 |
indirect ownership interest. For the purposes of this division, | 222 |
"qualifying section 179 depreciation expense" means the difference | 223 |
between (I) the amount of depreciation expense directly or | 224 |
indirectly allowed to the taxpayer under section 179 of the | 225 |
Internal Revenue Code, and (II) the amount of depreciation expense | 226 |
directly or indirectly allowed to the taxpayer under section 179 | 227 |
of the Internal Revenue Code as that section existed on December | 228 |
31, 2002. | 229 |
(iii) Subject to division (A)(20)(a)(v) of this section, for | 230 |
taxable years beginning in 2012 or thereafter, if the increase in | 231 |
income taxes withheld by the taxpayer is equal to or greater than | 232 |
ten per cent of income taxes withheld by the taxpayer during the | 233 |
taxpayer's immediately preceding taxable year, "two-thirds" shall | 234 |
be substituted for "five-sixths" for the purpose of divisions | 235 |
(A)(20)(a)(i) and (ii) of this section. | 236 |
(iv) Subject to division (A)(20)(a)(v) of this section, for | 237 |
taxable years beginning in 2012 or thereafter, a taxpayer is not | 238 |
required to add an amount under division (A)(20) of this section | 239 |
if the increase in income taxes withheld by the taxpayer and by | 240 |
any pass-through entity in which the taxpayer has a direct or | 241 |
indirect ownership interest is equal to or greater than the sum of | 242 |
(I) the amount of qualifying section 179 depreciation expense and | 243 |
(II) the amount of depreciation expense allowed to the taxpayer by | 244 |
subsection (k) of section 168 of the Internal Revenue Code, and | 245 |
including the taxpayer's proportionate or distributive shares of | 246 |
such amounts allowed to any such pass-through entities. | 247 |
(v) If a taxpayer directly or indirectly incurs a net | 248 |
operating loss for the taxable year for federal income tax | 249 |
purposes, to the extent such loss resulted from depreciation | 250 |
expense allowed by subsection (k) of section 168 of the Internal | 251 |
Revenue Code and by qualifying section 179 depreciation expense, | 252 |
"the entire" shall be substituted for "five-sixths of the" for the | 253 |
purpose of divisions (A)(20)(a)(i) and (ii) of this section. | 254 |
(c) To the extent the add-back required under division | 261 |
(A)(20)(a) of this section is attributable to property generating | 262 |
nonbusiness income or loss allocated under section 5747.20 of the | 263 |
Revised Code, the add-back shall be sitused to the same location | 264 |
as the nonbusiness income or loss generated by the property for | 265 |
the purpose of determining the credit under division (A) of | 266 |
section 5747.05 of the Revised Code. Otherwise, the add-back shall | 267 |
be apportioned, subject to one or more of the four alternative | 268 |
methods of apportionment enumerated in section 5747.21 of the | 269 |
Revised Code. | 270 |
(b) If the amount deducted under division (A)(21)(a) of this | 309 |
section is attributable to an add-back allocated under division | 310 |
(A)(20)(c) of this section, the amount deducted shall be sitused | 311 |
to the same location. Otherwise, the add-back shall be apportioned | 312 |
using the apportionment factors for the taxable year in which the | 313 |
deduction is taken, subject to one or more of the four alternative | 314 |
methods of apportionment enumerated in section 5747.21 of the | 315 |
Revised Code. | 316 |
(c) No deduction is available under division (A)(21)(a) of | 317 |
this section with regard to any depreciation allowed by section | 318 |
168(k) of the Internal Revenue Code and by the qualifying section | 319 |
179 depreciation expense amount to the extent that such | 320 |
depreciation resultedresults in or increasedincreases a federal | 321 |
net operating loss carryback or carryforward to a taxable year to | 322 |
which division (A)(20)(d) of this section does not apply. If no | 323 |
such deduction is available for a taxable year, the taxpayer may | 324 |
carry forward the amount not deducted in such taxable year to the | 325 |
next taxable year and add that amount to any deduction otherwise | 326 |
available under division (A)(21)(a) of this section for that next | 327 |
taxable year. The carryforward of amounts not so deducted shall | 328 |
continue until the entire addition required by division (A)(20)(a) | 329 |
of this section has been deducted. | 330 |
(24) Deduct, to the extent included in federal adjusted gross | 343 |
income and not otherwise allowable as a deduction or exclusion in | 344 |
computing federal or Ohio adjusted gross income for the taxable | 345 |
year, military pay and allowances received by the taxpayer during | 346 |
the taxable year for active duty service in the United States | 347 |
army, air force, navy, marine corps, or coast guard or reserve | 348 |
components thereof or the national guard. The deduction may not be | 349 |
claimed for military pay and allowances received by the taxpayer | 350 |
while the taxpayer is stationed in this state. | 351 |
(25) Deduct, to the extent not otherwise allowable as a | 352 |
deduction or exclusion in computing federal or Ohio adjusted gross | 353 |
income for the taxable year and not otherwise compensated for by | 354 |
any other source, the amount of qualified organ donation expenses | 355 |
incurred by the taxpayer during the taxable year, not to exceed | 356 |
ten thousand dollars. A taxpayer may deduct qualified organ | 357 |
donation expenses only once for all taxable years beginning with | 358 |
taxable years beginning in 2007. | 359 |
(26) Deduct, to the extent not otherwise deducted or excluded | 369 |
in computing federal or Ohio adjusted gross income for the taxable | 370 |
year, amounts received by the taxpayer as retired military | 371 |
personnel pay for service in the United States army, navy, air | 372 |
force, coast guard, or marine corps or reserve components thereof, | 373 |
or the national guard, or received by the surviving spouse or | 374 |
former spouse of such a taxpayer under the survivor benefit plan | 375 |
on account of such a taxpayer's death. If the taxpayer receives | 376 |
income on account of retirement paid under the federal civil | 377 |
service retirement system or federal employees retirement system, | 378 |
or under any successor retirement program enacted by the congress | 379 |
of the United States that is established and maintained for | 380 |
retired employees of the United States government, and such | 381 |
retirement income is based, in whole or in part, on credit for the | 382 |
taxpayer's military service, the deduction allowed under this | 383 |
division shall include only that portion of such retirement income | 384 |
that is attributable to the taxpayer's military service, to the | 385 |
extent that portion of such retirement income is otherwise | 386 |
included in federal adjusted gross income and is not otherwise | 387 |
deducted under this section. Any amount deducted under division | 388 |
(A)(26) of this section is not included in a taxpayer's adjusted | 389 |
gross income for the purposes of section 5747.055 of the Revised | 390 |
Code. No amount may be deducted under division (A)(26) of this | 391 |
section on the basis of which a credit was claimed under section | 392 |
5747.055 of the Revised Code. | 393 |
(30) Deduct, to the extent not otherwise deducted or excluded | 410 |
in computing federal or Ohio adjusted gross income for the taxable | 411 |
year, any income derived from providing public services under a | 412 |
contract through a project owned by the state, as described in | 413 |
section 126.604 of the Revised Code or derived from a transfer | 414 |
agreement or from the enterprise transferred under that agreement | 415 |
under section 4313.02 of the Revised Code. | 416 |
(B) "Business income" means income, including gain or loss, | 417 |
arising from transactions, activities, and sources in the regular | 418 |
course of a trade or business and includes income, gain, or loss | 419 |
from real property, tangible property, and intangible property if | 420 |
the acquisition, rental, management, and disposition of the | 421 |
property constitute integral parts of the regular course of a | 422 |
trade or business operation. "Business income" includes income, | 423 |
including gain or loss, from a partial or complete liquidation of | 424 |
a business, including, but not limited to, gain or loss from the | 425 |
sale or other disposition of goodwill. | 426 |
(C) "Nonbusiness income" means all income other than business | 427 |
income and may include, but is not limited to, compensation, rents | 428 |
and royalties from real or tangible personal property, capital | 429 |
gains, interest, dividends and distributions, patent or copyright | 430 |
royalties, or lottery winnings, prizes, and awards. | 431 |
(a) A trust resides in this state for the trust's current | 455 |
taxable year to the extent, as described in division (I)(3)(d) of | 456 |
this section, that the trust consists directly or indirectly, in | 457 |
whole or in part, of assets, net of any related liabilities, that | 458 |
were transferred, or caused to be transferred, directly or | 459 |
indirectly, to the trust by any of the following: | 460 |
(iii) A person who was domiciled in this state for the | 471 |
purposes of this chapter when the trust document or instrument or | 472 |
part of the trust document or instrument became irrevocable, but | 473 |
only if at least one of the trust's qualifying beneficiaries is a | 474 |
resident domiciled in this state for the purposes of this chapter | 475 |
during all or some portion of the trust's current taxable year. If | 476 |
a trust document or instrument became irrevocable upon the death | 477 |
of a person who at the time of death was domiciled in this state | 478 |
for purposes of this chapter, that person is a person described in | 479 |
division (I)(3)(a)(iii) of this section. | 480 |
(c) With respect to a trust other than a charitable lead | 484 |
trust, "qualifying beneficiary" has the same meaning as "potential | 485 |
current beneficiary" as defined in section 1361(e)(2) of the | 486 |
Internal Revenue Code, and with respect to a charitable lead trust | 487 |
"qualifying beneficiary" is any current, future, or contingent | 488 |
beneficiary, but with respect to any trust "qualifying | 489 |
beneficiary" excludes a person or a governmental entity or | 490 |
instrumentality to any of which a contribution would qualify for | 491 |
the charitable deduction under section 170 of the Internal Revenue | 492 |
Code. | 493 |
(d) For the purposes of division (I)(3)(a) of this section, | 494 |
the extent to which a trust consists directly or indirectly, in | 495 |
whole or in part, of assets, net of any related liabilities, that | 496 |
were transferred directly or indirectly, in whole or part, to the | 497 |
trust by any of the sources enumerated in that division shall be | 498 |
ascertained by multiplying the fair market value of the trust's | 499 |
assets, net of related liabilities, by the qualifying ratio, which | 500 |
shall be computed as follows: | 501 |
(ii) Each subsequent time the trust receives assets, a | 508 |
revised qualifying ratio shall be computed. The numerator of the | 509 |
revised qualifying ratio is the sum of (1) the fair market value | 510 |
of the trust's assets immediately prior to the subsequent | 511 |
transfer, net of any related liabilities, multiplied by the | 512 |
qualifying ratio last computed without regard to the subsequent | 513 |
transfer, and (2) the fair market value of the subsequently | 514 |
transferred assets at the time transferred, net of any related | 515 |
liabilities, from sources enumerated in division (I)(3)(a) of this | 516 |
section. The denominator of the revised qualifying ratio is the | 517 |
fair market value of all the trust's assets immediately after the | 518 |
subsequent transfer, net of any related liabilities. | 519 |
(ii) The transfer is made to a trust to which the decedent, | 548 |
prior to the decedent's death, had directly or indirectly | 549 |
transferred assets, net of any related liabilities, while the | 550 |
decedent was domiciled in this state for the purposes of this | 551 |
chapter, and prior to the death of the decedent the trust became | 552 |
irrevocable while the decedent was domiciled in this state for the | 553 |
purposes of this chapter. | 554 |
(1) Add interest or dividends, net of ordinary, necessary, | 620 |
and reasonable expenses not deducted in computing federal taxable | 621 |
income, on obligations or securities of any state or of any | 622 |
political subdivision or authority of any state, other than this | 623 |
state and its subdivisions and authorities, but only to the extent | 624 |
that such net amount is not otherwise includible in Ohio taxable | 625 |
income and is described in either division (S)(1)(a) or (b) of | 626 |
this section: | 627 |
(2) Add interest or dividends, net of ordinary, necessary, | 633 |
and reasonable expenses not deducted in computing federal taxable | 634 |
income, on obligations of any authority, commission, | 635 |
instrumentality, territory, or possession of the United States to | 636 |
the extent that the interest or dividends are exempt from federal | 637 |
income taxes but not from state income taxes, but only to the | 638 |
extent that such net amount is not otherwise includible in Ohio | 639 |
taxable income and is described in either division (S)(1)(a) or | 640 |
(b) of this section; | 641 |
(4) Deduct interest or dividends, net of related expenses | 644 |
deducted in computing federal taxable income, on obligations of | 645 |
the United States and its territories and possessions or of any | 646 |
authority, commission, or instrumentality of the United States to | 647 |
the extent that the interest or dividends are exempt from state | 648 |
taxes under the laws of the United States, but only to the extent | 649 |
that such amount is included in federal taxable income and is | 650 |
described in either division (S)(1)(a) or (b) of this section; | 651 |
(5) Deduct the amount of wages and salaries, if any, not | 652 |
otherwise allowable as a deduction but that would have been | 653 |
allowable as a deduction in computing federal taxable income for | 654 |
the taxable year, had the targeted jobs credit allowed under | 655 |
sections 38, 51, and 52 of the Internal Revenue Code not been in | 656 |
effect, but only to the extent such amount relates either to | 657 |
income included in federal taxable income for the taxable year or | 658 |
to income of the S portion of an electing small business trust for | 659 |
the taxable year; | 660 |
(9)(a) Deduct any amount included in federal taxable income | 676 |
solely because the amount represents a reimbursement or refund of | 677 |
expenses that in a previous year the decedent had deducted as an | 678 |
itemized deduction pursuant to section 63 of the Internal Revenue | 679 |
Code and applicable treasury regulations. The deduction otherwise | 680 |
allowed under division (S)(9)(a) of this section shall be reduced | 681 |
to the extent the reimbursement is attributable to an amount the | 682 |
taxpayer or decedent deducted under this section in any taxable | 683 |
year. | 684 |
(12) Deduct any amount, net of related expenses deducted in | 713 |
computing federal taxable income, that a trust is required to | 714 |
report as farm income on its federal income tax return, but only | 715 |
if the assets of the trust include at least ten acres of land | 716 |
satisfying the definition of "land devoted exclusively to | 717 |
agricultural use" under section 5713.30 of the Revised Code, | 718 |
regardless of whether the land is valued for tax purposes as such | 719 |
land under sections 5713.30 to 5713.38 of the Revised Code. If the | 720 |
trust is a pass-through entity investor, section 5747.231 of the | 721 |
Revised Code applies in ascertaining if the trust is eligible to | 722 |
claim the deduction provided by division (S)(12) of this section | 723 |
in connection with the pass-through entity's farm income. | 724 |
(AA)(1) "Eligible institution" means a state university or | 760 |
state institution of higher education as defined in section | 761 |
3345.011 of the Revised Code, or a private, nonprofit college, | 762 |
university, or other post-secondary institution located in this | 763 |
state that possesses a certificate of authorization issued by the | 764 |
Ohio board of regents pursuant to Chapter 1713. of the Revised | 765 |
Code or a certificate of registration issued by the state board of | 766 |
career colleges and schools under Chapter 3332. of the Revised | 767 |
Code. | 768 |
(2) "Qualified tuition and fees" means tuition and fees | 769 |
imposed by an eligible institution as a condition of enrollment or | 770 |
attendance, not exceeding two thousand five hundred dollars in | 771 |
each of the individual's first two years of post-secondary | 772 |
education. If the individual is a part-time student, "qualified | 773 |
tuition and fees" includes tuition and fees paid for the academic | 774 |
equivalent of the first two years of post-secondary education | 775 |
during a maximum of five taxable years, not exceeding a total of | 776 |
five thousand dollars. "Qualified tuition and fees" does not | 777 |
include: | 778 |
(b) The qualifying trust amount multiplied by a fraction, the | 825 |
numerator of which is the sum of the book value of the qualifying | 826 |
investee's physical assets in this state on the last day of the | 827 |
qualifying investee's fiscal or calendar year ending immediately | 828 |
prior to the day on which the trust recognizes the qualifying | 829 |
trust amount, and the denominator of which is the sum of the book | 830 |
value of the qualifying investee's total physical assets | 831 |
everywhere on the last day of the qualifying investee's fiscal or | 832 |
calendar year ending immediately prior to the day on which the | 833 |
trust recognizes the qualifying trust amount. If, for a taxable | 834 |
year, the trust recognizes a qualifying trust amount with respect | 835 |
to more than one qualifying investee, the amount described in | 836 |
division (BB)(4)(b) of this section shall equal the sum of the | 837 |
products so computed for each such qualifying investee. | 838 |
(ii) With respect to a trust or portion of a trust that is | 842 |
not a resident as ascertained in accordance with division | 843 |
(I)(3)(d) of this section, the amount of its modified nonbusiness | 844 |
income satisfying the descriptions in divisions (B)(2) to (5) of | 845 |
section 5747.20 of the Revised Code, except as otherwise provided | 846 |
in division (BB)(4)(c)(ii) of this section. With respect to a | 847 |
trust or portion of a trust that is not a resident as ascertained | 848 |
in accordance with division (I)(3)(d) of this section, the trust's | 849 |
portion of modified nonbusiness income recognized from the sale, | 850 |
exchange, or other disposition of a debt interest in or equity | 851 |
interest in a section 5747.212 entity, as defined in section | 852 |
5747.212 of the Revised Code, without regard to division (A) of | 853 |
that section, shall not be allocated to this state in accordance | 854 |
with section 5747.20 of the Revised Code but shall be apportioned | 855 |
to this state in accordance with division (B) of section 5747.212 | 856 |
of the Revised Code without regard to division (A) of that | 857 |
section. | 858 |
(5)(a) Except as set forth in division (BB)(5)(b) of this | 865 |
section, "qualifying investee" means a person in which a trust has | 866 |
an equity or ownership interest, or a person or unit of government | 867 |
the debt obligations of either of which are owned by a trust. For | 868 |
the purposes of division (BB)(2)(a) of this section and for the | 869 |
purpose of computing the fraction described in division (BB)(4)(b) | 870 |
of this section, all of the following apply: | 871 |
(ii) If the qualifying investee, or if the qualifying | 878 |
investee and any members of the qualifying controlled group of | 879 |
which the qualifying investee is a member on the last day of the | 880 |
qualifying investee's fiscal or calendar year ending immediately | 881 |
prior to the date on which the trust recognizes the gain or loss, | 882 |
separately or cumulatively own, directly or indirectly, on the | 883 |
last day of the qualifying investee's fiscal or calendar year | 884 |
ending immediately prior to the date on which the trust recognizes | 885 |
the qualifying trust amount, more than fifty per cent of the | 886 |
equity of a pass-through entity, then the qualifying investee and | 887 |
the other members are deemed to own the proportionate share of the | 888 |
pass-through entity's physical assets which the pass-through | 889 |
entity directly or indirectly owns on the last day of the | 890 |
pass-through entity's calendar or fiscal year ending within or | 891 |
with the last day of the qualifying investee's fiscal or calendar | 892 |
year ending immediately prior to the date on which the trust | 893 |
recognizes the qualifying trust amount. | 894 |
An upper level pass-through entity, whether or not it is also | 900 |
a qualifying investee, is deemed to own, on the last day of the | 901 |
upper level pass-through entity's calendar or fiscal year, the | 902 |
proportionate share of the lower level pass-through entity's | 903 |
physical assets that the lower level pass-through entity directly | 904 |
or indirectly owns on the last day of the lower level pass-through | 905 |
entity's calendar or fiscal year ending within or with the last | 906 |
day of the upper level pass-through entity's fiscal or calendar | 907 |
year. If the upper level pass-through entity directly and | 908 |
indirectly owns less than fifty per cent of the equity of the | 909 |
lower level pass-through entity on each day of the upper level | 910 |
pass-through entity's calendar or fiscal year in which or with | 911 |
which ends the calendar or fiscal year of the lower level | 912 |
pass-through entity and if, based upon clear and convincing | 913 |
evidence, complete information about the location and cost of the | 914 |
physical assets of the lower pass-through entity is not available | 915 |
to the upper level pass-through entity, then solely for purposes | 916 |
of ascertaining if a gain or loss constitutes a qualifying trust | 917 |
amount, the upper level pass-through entity shall be deemed as | 918 |
owning no equity of the lower level pass-through entity for each | 919 |
day during the upper level pass-through entity's calendar or | 920 |
fiscal year in which or with which ends the lower level | 921 |
pass-through entity's calendar or fiscal year. Nothing in division | 922 |
(BB)(5)(a)(iii) of this section shall be construed to provide for | 923 |
any deduction or exclusion in computing any trust's Ohio taxable | 924 |
income. | 925 |
(3) A "qualifying pre-income tax trust election" is an | 968 |
election by a pre-income tax trust to subject to the tax imposed | 969 |
by section 5751.02 of the Revised Code the pre-income tax trust | 970 |
and all pass-through entities of which the trust owns or controls, | 971 |
directly, indirectly, or constructively through related interests, | 972 |
five per cent or more of the ownership or equity interests. The | 973 |
trustee shall notify the tax commissioner in writing of the | 974 |
election on or before April 15, 2006. The election, if timely | 975 |
made, shall be effective on and after January 1, 2006, and shall | 976 |
apply for all tax periods and tax years until revoked by the | 977 |
trustee of the trust. | 978 |