§287.733. Corporations filing consolidated federal returns

A. Except as otherwise provided in Subsection B of this Section, when a corporation is included with affiliates in a consolidated federal income tax return in accordance with federal law, the terms and provisions of this Part shall apply as if the corporation had been required to file an income tax return with the Internal Revenue Service on a separate corporation basis for the current and all prior taxable years, in accordance with federal law. Nothing in this Section shall be construed to allow a deduction for federal income tax on a separate corporation basis.

B.(1) Notwithstanding the provisions of Subsection A, any gain recognized by the distributing corporation pursuant to Section 311(b) of the Internal Revenue Code, but deferred for federal income tax purposes pursuant to the regulations under Section 1502 of the Internal Revenue Code, relating to deferred intercompany transactions, shall also be deferred for purposes of this Part and shall be restored to income of the distributing corporation in the year it would be restored to a member of the affiliated group pursuant to the regulations under Section 1502 of the Internal Revenue Code. Except, such deferred income shall be restored to income of the distributing corporation and taxed if the distributing corporation is merged with another corporation, reorganized, or ceases to be liable for corporation income tax for any reason whatsoever.

(2) In such case, for the purpose of determining gain or loss but for no other purposes, the adjusted basis of the distributee corporation in the property distributed to it by the distributing corporation shall be the distributing corporation's basis increased by the gain which would have been recognized but which is deferred pursuant to Paragraph B(1).

(3) Notwithstanding any other provision of this Section for purposes of determining a deduction for depreciation or amortization, the basis of any property distributed pursuant to Paragraph B(2) shall be the same to the distributee corporation as it was to the distributing corporation.

Acts 1986, 1st Ex. Sess., No. 16, §1, eff. Dec. 24, 1986; Acts 1996, No. 42, §1, eff. for taxable periods beginning after Dec. 31, 1996.