59-7-105.  Additions to unadjusted income.
     In computing adjusted income the following amounts shall be added to unadjusted income:

(1)  interest from bonds, notes, and other evidences of indebtedness issued by any state of the United States, including any agency and instrumentality of a state of the United States;

Terms Used In Utah Code 59-7-105

  • Adjusted income: means unadjusted income as modified by Sections 59-7-105 and 59-7-106. See Utah Code 59-7-101
  • Amortization: Paying off a loan by regular installments.
  • Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
  • Captive real estate investment trust: means a real estate investment trust if:
(i) the shares or beneficial interests of the real estate investment trust are not regularly traded on an established securities market; and
(ii) more than 50% of the voting power or value of the shares or beneficial interests of the real estate investment trust are directly, indirectly, or constructively:
(A) owned by a controlling entity of the real estate investment trust; or
(B) controlled by a controlling entity of the real estate investment trust. See Utah Code 59-7-101
  • Common ownership: means the direct or indirect control or ownership of more than 50% of the outstanding voting stock of:
    (i) a parent-subsidiary controlled group as defined in Section 1563, Internal Revenue Code, except that 50% shall be substituted for 80%;
    (ii) a brother-sister controlled group as defined in Section 1563, Internal Revenue Code; or
    (iii) three or more corporations each of which is a member of a group of corporations described in Subsection (2)(a)(i) or (ii), and one of which is:
    (A) a common parent corporation included in a group of corporations described in Subsection (2)(a)(i); and
    (B) included in a group of corporations described in Subsection (2)(a)(ii). See Utah Code 59-7-101
  • Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
  • Corporation: includes :
    (a) entities defined as corporations under Sections 7701(a) and 7704, Internal Revenue Code; and
    (b) other organizations that are taxed as corporations for federal income tax purposes under the Internal Revenue Code. See Utah Code 59-7-101
  • Doing business: includes any transaction in the course of business by a domestic corporation or by a foreign corporation qualified to do or doing business in this state. See Utah Code 59-7-101
  • Income: includes losses. See Utah Code 59-7-101
  • Internal Revenue Code: means Title 26 of the United States Code as effective during the year in which Utah taxable income is determined. See Utah Code 59-7-101
  • Lease: A contract transferring the use of property or occupancy of land, space, structures, or equipment in consideration of a payment (e.g., rent). Source: OCC
  • Real estate investment trust: means the same as that term is defined in Section 856, Internal Revenue Code. See Utah Code 59-7-101
  • return: includes a combined report. See Utah Code 59-7-101
  • State: when applied to the different parts of the United States, includes a state, district, or territory of the United States. See Utah Code 68-3-12.5
  • taxable year: includes the period for which such return is made. See Utah Code 59-7-101
  • Unadjusted income: includes deferred foreign income described in Section 965(a), Internal Revenue Code. See Utah Code 59-7-101
  • United States: includes the 50 states and the District of Columbia. See Utah Code 59-7-101
    • (2)  the amount of any deduction taken on a corporation‘s federal return for taxes paid by a corporation:

    (a)  to Utah for taxes imposed by this chapter; and

    (b)  to another state of the United States, a foreign country, a United States possession, or the Commonwealth of Puerto Rico for taxes imposed for the privilege of doing business, or exercising its corporate franchise, including income, franchise, corporate stock and business and occupation taxes;

    (3)  the safe harbor lease adjustment required under Subsections 59-7-111(1)(a) and (2)(a);

    (4)  capital losses that have been deducted on a Utah corporate return in previous years;

    (5)  any deduction on the federal return that has been previously deducted on the Utah return;

    (6)  charitable contributions, to the extent deducted on the federal return when determining federal taxable income;

    (7)  the amount of gain or loss determined under Section 59-7-114 relating to a target corporation under Section 338, Internal Revenue Code, unless such gain or loss has already been included in the unadjusted income of the target corporation;

    (8)  the amount of gain or loss determined under Section 59-7-115 relating to corporations treated for federal purposes as having disposed of its assets under Section 336(e), Internal Revenue Code, unless such gain or loss has already been included in the unadjusted income of the target corporation;

    (9)  adjustments to gains, losses, depreciation expense, amortization expense, and similar items due to a difference between basis for federal purposes and basis as computed under Section 59-7-107;

    (10)  the amount withdrawn under Title 53B, Chapter 8a, Utah Educational Savings Plan, from the account of a corporation that is an account owner as defined in Section 53B-8a-102, for the taxable year for which the amount is withdrawn, if that amount withdrawn from the account of the corporation that is the account owner:

    (a)  is not expended for:

    (i)  higher education costs as defined in Section 53B-8a-102.5; or

    (ii)  a payment or distribution that qualifies as an exception to the additional tax for distributions not used for educational expenses provided in Sections 529(c) and 530(d), Internal Revenue Code; and

    (b)  is subtracted by the corporation:

    (i)  that is the account owner; and

    (ii)  in accordance with Subsection 59-7-106(1)(r);

    (11)  the amount of the deduction for dividends paid, as defined in Section 561, Internal Revenue Code, that is allowed under Section 857(b)(2)(B), Internal Revenue Code, in computing the taxable income of a captive real estate investment trust, if that captive real estate investment trust is subject to federal income taxation; and

    (12)  any deduction on a return filed under this chapter for a royalty or other expense that a corporation pays to an entity related by common ownership for the use of an intangible asset where the intangible asset is owned by the entity related by common ownership unless the corporation can demonstrate to the satisfaction of the commission or a court on judicial review in accordance with Section 59-1-602 or 4, that:

    (a)  for the same taxable year, the entity related by common ownership is subject to income taxes on the royalty or other expense:

    (i)  under this chapter;

    (ii)  under the laws of another state; or

    (iii)  by a foreign government that has in force an income tax treaty with the United States; or

    (b)  if Subsection (12)(a) does not apply, the corporation paying the royalty or other expenses never owned the intangible asset.

    Amended by Chapter 184, 2020 General Session

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