EXAMPLE: Assume that Corporation A and Corporation B constitute a unitary business group and there is no nonbusiness income or loss. Under the facts given below, if A and B file separate returns in 1986, using combined apportionment, A will have an Illinois net loss of $100 and B will have an Illinois net loss of $400, and if a combined return is filed, the group will report a combined Illinois net loss of $500.
Corp A. | Corp. B | Combined | |
Base Income (loss) | 200 | (1,200) | (1,000) |
Business Income | (1,000) | ||
Apport. % (sep. Ill./comb. everywhere) | 10% | 40% | |
Apport. % (comb. Ill./comb. everywhere) | 50% | ||
Apportioned income (loss) | (100) | (400) | (500) |
Illinois Net Income (loss) | (100) | (400) | (500) |
EXAMPLE: Assume that Corporation A and Corporation B constitute a unitary business group in 1986. Under the facts given below, if A and B file separate returns in 1986, using the combined apportionment method, A will have an Illinois net loss of $170 and B will report Illinois net income of $520. If a combined return is filed, the group will report combined Illinois net income of $350.
Corp. A | Corp. B | Combined | |
Base income | 1,000 | ||
Nonbusiness loss | (300) | (300) | |
Business income | 1,300 | ||
Apport. % (sep.Ill./comb. everywhere) | 10% | 40% | |
Apport. % (comb. Ill./comb. everywhere | 50% | ||
Apportioned income | 130 | 520 | 650 |
Nonbusiness loss allocable to Illinois | (300) | (300) | |
Illinois Net income (loss) | (170) | 520 | 350 |
EXAMPLE: Assume that Corporation A and Corporation B constitute a unitary business group, that in 1986 there is a $170 Illinois net loss entirely attributable to Corporation A because Corporation B had no property, payroll, or sales in Illinois, and that the loss must be carried forward because of losses in prior years. Assume further that in 1987 both A and B have property, payroll and sales in Illinois. The separate and combined absorption of the loss in 1987 is illustrated below. Under the facts given, if A and B file separate returns, the $170 Illinois net loss deduction will be recognized on A's return only, and A will have a $70 net loss carryover to 1988. B will have to pay tax on net income of $400. If a combined return is filed in 1987, the $170 Illinois net loss from 1986 will be fully absorbed in 1987, and the combined group will pay tax on combined net income of $330.
Corp. A | Corp. B | Combined | |
Base income | 1,000 | ||
Business income | 1,000 | ||
Apport. % (sep. Ill./comb. everywhere | 10% | 40% | |
Apport. % (comb. Ill./comb. everywhere) | 50% | ||
Apportioned income | 100 | 400 | 500 |
Net loss deduction | (170) | (170) | |
Net income (loss) | (70) | 400 | 330 |
Ill. Admin. Code tit. 86, § 100.2340
Added at 11 Ill. Reg. 17782, effective October 16, 1987