Instructions For Form 20-I - Oregon Corporation Income Tax

§ An intangible asset is owned by one corporation or

reported on line 18, Schedule C of federal Form 5471.

business (the owner), and used by another (the user)

Report each subject corporation’s income or loss as a

for a royalty or other fee;

separate amount on Schedule ASC-CORP; don’t com-

§ Both the owner and the user are “owned by the same

bine amounts of multiple corporations.

interests,” as defined in Treas. Reg.§1.469-4T, para-

If a subject corporation’s loss or item of expense has

graph (j);

been excluded from your federal consolidated tax-

§ The owner and the user aren’t included in the same

able income as carried to your Oregon return, it is a

Oregon tax return; and

negative “Other addition” to arrive at Oregon taxable

§ The separation of ownership of the intangible asset

income. For more information, see ORS 317.715 and the

from the user of the intangible asset results in either:

corresponding administrative rules.

evasion of tax or a computation of Oregon taxable

• Listed foreign jurisdictions—previously included

income that isn’t clearly reflective of Oregon busi-

loss or expense. If any portion of loss or expense

ness income.

of a foreign corporation (subject corporation) that’s

If the owner also files an Oregon return, the owner

required to be included in the determination of federal

of the intangible asset must report the corresponding

taxable income per ORS 317.715 was already included

royalty or other income from such use from federal

in your Oregon taxable income, it won’t be included

taxable income as an offset to Oregon taxable income.

again. Reduce the “Other addition” loss for the portion

The offset should be shown as a negative “Other addi-

of the loss or expense that was previously included.

tion” on Schedule ASC-CORP. (ORS 314.295) (OAR

Include a schedule with your return to explain how

150-314.295)

each amount is determined. For more information,

• Inventory costs. The costs allocable to inventory are

see ORS 317.715 and the corresponding administrative

the same as those included in IRC §263A. Differences

rules.

in depreciation and depletion allocable to inventory

• Long-term care insurance premiums. Premiums

result in a modification. [ORS 314.287(3)]

deducted on the federal return must be added back if

• IRC §139A federal subsidies for prescription drug

the Oregon credit’s claimed under ORS 315.610. (ORS

plans. For federal purposes, taxpayers can exclude

317.322)

from taxable income certain federal subsidies for

• Losses of nonunitary corporations. The net losses of

prescription drug plans per IRC §139A. However, for

nonunitary corporations included in a consolidated

Oregon purposes, this federally excluded income is an

federal return must be eliminated from the Oregon

addition on the Oregon return. (ORS 317.401)

return. Net losses include the separate loss as deter-

• IRC §631(a) treatment of timber isn’t recognized by

mined under Treasury Regulations adopted for IRC

Oregon. Both beginning and ending inventories must

§1502, and deductions, additions, or items of income,

be adjusted for IRC §631(a) gain. For Oregon purposes,

expense, gain, or loss for which the consolidated treat-

there is no taxable event until actual sale. (ORS 317.362)

ment is prescribed. Attach a schedule showing compu-

• Listed foreign jurisdictions —income. Taxable income

tation of the net loss eliminated. [ORS 317.715(2)]

of any unitary corporation that’s incorporated in a

• Net federal capital loss deduction. If the Oregon and

listed foreign jurisdiction and isn’t otherwise required

federal capital loss deductions are different, add the

to file a consolidated federal return (subject corpora-

federal capital loss back to income. The Oregon capital

tion) shall be included in Oregon income as an “Other

loss will be deducted after subtractions (and apportion-

addition.” See ORS 317.715 for the listed foreign juris-

ment for corporations required to apportion income) to

dictions. Use the subject corporation’s net income as

arrive at Oregon taxable income. (OAR 150-317.013)

reported on line 18, Schedule C of federal Form 5471.

• QPAI deduction. Add to federal taxable income the

Report each subject corporation’s income or loss as a

amount of QPAI deduction per IRC §199 claimed on

separate amount on Schedule ASC-CORP; don’t com-

the federal return. Agricultural or horticultural coop-

bine amounts of multiple corporations.

eratives, reduce the addition by the amount passed

If a subject corporation’s income has been excluded

through to cooperative patrons under IRC §199(d)(3)

from your federal consolidated taxable income as car-

(A). (ORS 317.398)

ried to your Oregon return, it’s a positive “Other addi-

• Qualified research and development credit. After you

tion” to arrive at Oregon taxable income. For more

have calculated the credit, you must add the amount

information, see ORS 317.715 and the corresponding

back to your Oregon taxable income.

administrative rules.

• REITs and RICs. An REIT or RIC meeting the federal

• Listed foreign jurisdictions —loss. Taxable loss of

affiliate definition, must be included in the consoli-

any unitary corporation that’s incorporated in a listed

dated Oregon return. This is an Oregon modification

foreign jurisdiction and isn’t otherwise required to

(addition or subtraction) to federal taxable income. For

file a consolidated federal return (subject corpora-

apportioning taxpayers, factors from the REIT or RIC

tion) shall be included in Oregon income as a negative

are included in the apportionment calculation. (ORS

“Other addition.” See ORS 317.715 for the listed foreign

jurisdictions. Use the subject corporation’s net loss as

317.010 and rules)

150-102-021-1 (Rev. 10-14)

Form 20-I Instructions

Instructions For Form 20-I - Oregon Corporation Income Tax - 2014 Page 10

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