17 NCAC 05B .1109 — Equity Capital Not Deductible

The equity capital of a wholly owned subsidiary does not represent "indebtedness" owed to a parent corporation which the parent is entitled to deduct from its franchise tax base. 17 NCAC 05B .1110 RECIPROCAL INDEBTEDNESS BETWEEN AFFILIATES A corporation that owes indebtedness to a parent, subsidiary, or affiliated corporation and at the same time is owed indebtedness by the same parent, subsidiary, or affiliated corporation shall net the payable and receivable for purposes of the indebtedness computation in arriving at the net worth base under G.S. 105-122. If the indebtedness is owed to one corporation and the receivable is due from another corporation, each amount shall be treated separately.