Or. Admin. R. 150-317-0660 - Computation of Taxable Income; Excess Loss Accounts

Current through Register Vol. 61, No. 4, April 1, 2022

An Oregon subtraction is allowed for the amount of excess loss account included in federal taxable income under the provisions of Treasury Regulation subsection 1.1502-19 if:

(1) The losses did not offset unitary income in the year incurred; or
(2) The excess losses were attributable to losses incurred in tax years beginning prior to January 1, 1986.
Example 1: Corporation P purchased 100 percent of the stock of Corporation S for $1,000 on January 1, 1986. P and S were not unitary and S had negative earning and profits (E&P) of $1,000 in the tax year ending December 31, 1986. They filed a consolidated federal and separate Oregon returns in 1986. P and S were unitary and filed consolidated federal and Oregon returns in 1987. During 1987, S realized another negative E&P of $1,000. P sold S to an unrelated buyer for $1,000 on January 1, 1988. [Table not included. See PDF link below.]
Example 2: Same facts as Example (1), except that all events took place two years earlier. The 1986 Oregon return would show a subtraction of $2,000,000 because both losses, even the 1985 loss which did offset unitary income, were incurred in tax years beginning before January 1, 1986.

Notes

Or. Admin. R. 150-317-0660
RD 7-1993, f. 12-30-93, cert. ef. 12-31-93; Renumbered from 150-317.720, REV 69-2016, f. 8-15-16, cert. ef. 9/1/2016; REV 61-2017, f. & cert. ef. 8/8/2017; REV 83-2017, minor correction filed 12/28/2017, effective 12/28/2017

To view tables referenced in rule text, click here to view rule.

Statutory/Other Authority: ORS 305.100

Statutes/Other Implemented: ORS 317.720

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