N.J. Admin. Code § 18:7-5.4

Current through Register Vol. 56, No. 9, May 6, 2024

Section 18:7-5.4 - Factors not adjustable to Federal taxable income

(a) No adjustment to Federal taxable income is permitted under this rule for:

1. Gains or losses not recognized for Federal income tax purposes under I.R.C. § 351 or similar sections but only to the extent that recapture or other provisions of the Code are not paramount to these sections.

2. The general business credit allowed or allowable for Federal income tax purposes under I.R.C. § 38.

i. This may not be taken as a deduction in computing the New Jersey net income tax base, nor as a credit, in any manner, in computing tax liability under the Corporation Business Tax Act.

ii. Upon disposition of assets which qualified for a general business credit under I.R.C. § 38, taxpayer must use the same basis for computing gain or loss for New Jersey net income tax purposes as employed for Federal income tax purposes.

3. Depreciation attributable to a decrease in the basis of depreciable property for Federal income tax purposes, as a result of the general business credit allowed or allowable under I.R.C. § 38.

i. This depreciation may not be taken as a deduction in computing the New Jersey net income tax base.

ii. Depreciation taken for New Jersey net income tax purposes must be reported at the same amount as reported for Federal income tax purposes for the same period.

N.J. Admin. Code § 18:7-5.4

Amended by 49 N.J.R. 1694(a), effective 6/19/2017