Current through Register Vol. 61, No. 4, April 1, 2022
(1) In general. The contribution deduction
allowed corporations subject to taxation under Oregon Revised Statutes (ORS)
Chapter 317 or 318, that file federal consolidated returns, is limited to the
lesser of:
(a) The contributions made by the
members of the unitary group; or
(b) 10 percent of the modified federal
consolidated taxable income of the members of the unitary group.
Example 1 : Corporation A files a
consolidated federal return for tax year 2010. A's federal return consists of
two unitary groups of corporations, one of which is required to file an Oregon
return. Corporation B is a member of the unitary group of corporations required
to file a 2010 Oregon return. B contributed $1,000,000 to charities. No other
corporation included in A's consolidated federal return made contributions in
2010. For tax year 2010, A has federal consolidated taxable income of
$20,000,000 before any contribution deduction. The unitary group required to
file the Oregon return has modified federal consolidated taxable income of
$500,000 before any contribution deduction.
Under Treasury Regulations adopted under section 1502 of the
Internal Revenue Code (IRC), A is allowed to claim a contribution deduction of
$1,000,000 (the lesser of the amount paid by all members of the federal
consolidated group or 10 percent of the federal consolidated taxable income of
the entire group before the contribution deduction). For Oregon purposes,
however, the unitary group is allowed a contribution deduction of $50,000 (the
lesser of the $1,000,000 paid by members of the unitary group or 10 percent of
the $500,000 modified federal consolidated taxable income before the
contribution deduction).
Example
2 : Assume the same facts as in Example 1 except that the unitary
group required to file an Oregon return has modified federal consolidated net
loss of $100,000. This unitary group has no allowable contribution deduction
even though A will be permitted to deduct the entire contribution on its 2010
consolidated federal return.
Example
3 : Assume the same facts as in Example 1 except that no member of
the unitary group required to file an Oregon return made any contribution and
members of the nonunitary group made the $1,000,000 contribution. For federal
purposes, the consolidated group is permitted to claim a deduction for the
contributions made by any member of the group. However, for Oregon purposes, no
deduction is allowed.
(2) Carryover of excess contributions.
(a) Any contribution not used in the tax year
is carried over to the next tax year. In no case shall a contribution be
carried over for more than five succeeding tax years. Any contribution not used
is lost.
(b) Contribution
carryovers for any consolidated return tax year shall consist of any excess
contributions of the unitary group, plus any excess contributions of members of
the group arising in separate return tax years of such members and which may be
carried over to the taxable year pursuant to the principles of IRC section 170.
However, such consolidated contribution carryovers shall not include any excess
contributions apportioned to a corporation for a separate return tax year
pursuant to Treasury Regulations adopted under section 1502 of the IRC.
Example 4
: Assume the same
facts as in Example 1 except that the unitary group has modified federal
consolidated taxable income of $5,000. The allowable contribution deduction is
limited to $500 (the lesser of the $1,000,000 contributed or 10 percent of the
group's $5,000 modified federal consolidated taxable income). The unitary group
is allowed to carry over $999,500 to the group's next tax year, 2011. None of
the amount may be carried over beyond tax year 2015 (five years from the tax
year in which the amount was contributed).
Example 5 : Assume the same facts as in
Example 4 except that in tax year 2010 A acquired Corporation C. C will be
included in A's 2011 consolidated federal return and is unitary with the group
required to file an Oregon return. In 2010, C had a contribution carryover of
$200,000. Its income and deductions were used in computing the unitary group's
2011 Oregon consolidated taxable income. Since C is unitary with the group
required to file an Oregon return, the unitary group's carryover for tax year
2011 is $1,199,500 ($999,500 plus $200,000).
(c) Excess contribution carryovers are
applied to a given tax year in the same manner as provided under IRC sections
170 and 381 as they apply to the unitary group required to file an Oregon
return.
Notes
Or.
Admin. R. 150-317-0620
RD 11-1988,
f. 12-19-88, cert. ef. 12-31-88; RD 7-1993, f. 12-30-93, cert. ef. 12-31-93;
Renumbered from 150-317.715(2)-(B), REV 2-2014, f. & cert. ef. 7-31-14;
Renumbered from 150-317.715(3)-(B),
REV
69-2016, f. 8-15-16, cert. ef.
9/1/2016
Publications: Contact the Oregon Department of Revenue for
information about how to obtain a copy of the publication referred to or
incorporated by reference in this rule pursuant to ORS
183.360(2) and
183.355(1)(b).
Stat. Auth.: ORS
305.100
Stats. Implemented: ORS
317.715
