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
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,
Admin. R. 150-317-0660
RD 7-1993, f.
12-30-93, cert. ef. 12-31-93; Renumbered from 150-317.720,
69-2016, f. 8-15-16, cert. ef.
61-2017, f. & cert. ef.
83-2017, minor correction filed 12/28/2017,
Statutory/Other Authority: ORS
Statutes/Other Implemented: ORS