Illinois Administrative Code
Title 86 - REVENUE
Part 100 - INCOME TAX
Subpart G - BASE INCOME OF CORPORATIONS
Section 100.2657 - Subtraction Modification for High Impact Business Interest (IITA Section 203(b)(2)(M-1))
Current through Register Vol. 48, No. 38, September 20, 2024
a) A corporation that is a "financial organization" within the meaning of IITA Section 304(c) may subtract an amount included in its taxable income as interest income from a loan or loans made by such taxpayer to a borrower, to the extent that such a loan is secured by property which is eligible for the High Impact Business Investment Credit under IITA Section 201(h). (IITA Section 203(b)(2)(M-1))
b) Coordination with Subtraction for Enterprise Zone Interest. Notwithstanding subsection (a), a taxpayer may not claim a subtraction modification under IITA Section 203(b)(2)(M-1) and this Section for any taxable year in which the taxpayer is allowed to claim the subtraction modification under IITA Section 203(b)(2)(M) and Section 100.2655 of this Part for interest on a loan secured by property eligible for the enterprise zone investment credit or river edge redevelopment zone investment credit. (IITA Section 203(b)(2)(M-1))
c) Eligible Property. For purposes of this Section, "eligible property" shall mean property that is "qualified property", as defined under IITA Section 201(h) and Section 100.2130(e) of this Part, and that is placed in service on or after the date the owner is designated as a high impact business by the Department of Commerce and Economic Opportunity. To be considered eligible property, it is not necessary that the property be placed in service in a federally designated foreign trade zone or subzone.
d) Portion of Loan Secured by Eligible Property. To determine the portion of a loan that is secured by eligible property, the entire principal amount of the loan between the taxpayer and the borrower should be divided into the basis of the eligible property which secures the loan, using for this purpose the original basis of such property on the date it was placed in service. The subtraction modification available to the taxpayer in any year under IITA Section 203(b)(2)(M-1) shall be that portion of the total interest paid by the borrower with respect to such loan attributable to the eligible property as calculated under the previous sentence. (IITA Section 203(b)(2)(M-1)) There is no limitation to the length of time for which the subtraction may be taken with respect to a particular loan.
e) Basis. For purposes of the computation in subsection (d), the basis of eligible property shall be its borrower's basis in the eligible property for federal income tax purposes, including the costs of any improvements or repairs included in that basis, but without adjustment for depreciation or IRC section 179 deductions claimed with respect to the property.
f) Examples. The provisions of IITA Section 203(b)(2)(M-1) and this Section may be illustrated by the following examples.