(1) In determining the taxable income of a resident pass-through entity taxpayer, an addition, subtraction, or adjustment that relates to an item of income, gain, loss, deduction, or credit of a pass-through entity shall be made in accordance with this section.

(2) For a resident pass-through entity taxpayer of a pass-through entity except for a pass-through entity that is an S corporation, the resident pass-through entity taxpayer's share of an addition, subtraction, or adjustment that relates to an item of income, gain, loss, deduction, or credit is: (a) if the item of income, gain, loss, deduction, or credit is required to be taken into account separately for federal income tax purposes, the resident pass-through entity taxpayer's distributive share of the item of income, gain, loss, deduction, or credit: (i) for federal income tax purposes; and (ii) determined under Section 704 et seq., Internal Revenue Code; or (b) if the item of income, gain, loss, deduction, or credit is not required to be taken into account separately for federal income tax purposes, determined in accordance with the resident pass-through entity taxpayer's distributive share of income, gain, loss, deduction, or credit: (i) relating to the pass-through entity generally; (ii) for federal income tax purposes; and (iii) under Section 704 et seq., Internal Revenue Code.

(a) if the item of income, gain, loss, deduction, or credit is required to be taken into account separately for federal income tax purposes, the resident pass-through entity taxpayer's distributive share of the item of income, gain, loss, deduction, or credit: (i) for federal income tax purposes; and (ii) determined under Section 704 et seq., Internal Revenue Code; or

(i) for federal income tax purposes; and

(ii) determined under Section 704 et seq., Internal Revenue Code; or

(b) if the item of income, gain, loss, deduction, or credit is not required to be taken into account separately for federal income tax purposes, determined in accordance with the resident pass-through entity taxpayer's distributive share of income, gain, loss, deduction, or credit: (i) relating to the pass-through entity generally; (ii) for federal income tax purposes; and (iii) under Section 704 et seq., Internal Revenue Code.

(i) relating to the pass-through entity generally;

(ii) for federal income tax purposes; and

(iii) under Section 704 et seq., Internal Revenue Code.

(3) For a resident pass-through entity taxpayer of a pass-through entity that is an S corporation, the resident pass-through entity taxpayer's share of an addition, subtraction, or adjustment that relates to an item of income, gain, loss, deduction, or credit is: (a) if the item of income, gain, loss, deduction, or credit is required to be taken into account separately for federal income tax purposes, the resident pass-through entity taxpayer's pro rata share of the item of income, gain, loss, deduction, or credit: (i) for federal income tax purposes; and (ii) determined under Section 1366 et seq., Internal Revenue Code; or (b) if the item of income, gain, loss, deduction, or credit is not required to be taken into account separately for federal income tax purposes, determined in accordance with the resident pass-through entity taxpayer's pro rata share of the item of income, gain, loss, deduction, or credit: (i) relating to the pass-through entity generally; (ii) for federal income tax purposes; and (iii) under Section 1366 et seq., Internal Revenue Code.

(a) if the item of income, gain, loss, deduction, or credit is required to be taken into account separately for federal income tax purposes, the resident pass-through entity taxpayer's pro rata share of the item of income, gain, loss, deduction, or credit: (i) for federal income tax purposes; and (ii) determined under Section 1366 et seq., Internal Revenue Code; or

(i) for federal income tax purposes; and

(ii) determined under Section 1366 et seq., Internal Revenue Code; or

(b) if the item of income, gain, loss, deduction, or credit is not required to be taken into account separately for federal income tax purposes, determined in accordance with the resident pass-through entity taxpayer's pro rata share of the item of income, gain, loss, deduction, or credit: (i) relating to the pass-through entity generally; (ii) for federal income tax purposes; and (iii) under Section 1366 et seq., Internal Revenue Code.

(i) relating to the pass-through entity generally;

(ii) for federal income tax purposes; and

(iii) under Section 1366 et seq., Internal Revenue Code.