Modified Federal Consolidated Taxable Income

Federal consolidated taxable income must be modified if the affiliated group of corporations consists of more than one unitary group or includes any alien, domestic, or foreign insurer that is excluded from the consolidated state return under ORS 317.710 (5) or (7). The separate taxable income determined under the provisions set forth in the treasury regulations under Internal Revenue Code (IRC) section 1502 attributable to an affiliated corporation, which does not belong to the unitary group of which the corporation subject to tax under this chapter is a member, or attributable to insurers excluded from the federal consolidated state return under ORS 317.710 (5) or (7), must be subtracted from federal consolidated taxable income.

Example: Corporations M, G, P, and W file a consolidated federal return. Corporations M, P, and W are engaged in a single unitary business. Corporation G's business activities are separate and unrelated. Corporation P is an insurance company doing business in Oregon and is required to be excluded from the federal consolidated return by ORS 317.710. Modified federal consolidated taxable income is computed by subtracting, from federal consolidated taxable income, Corporation G and P's separate taxable incomes and by reversing the necessary adjustments pursuant to the provisions set forth in the treasury regulations under IRC section 1502 attributable to Corporations G and P.

[Publications: Contact the Oregon Department of Revenue for information about how to obtain a copy of the publication referred to or incorporated by reference in this rule pursuant to ORS 183.360(2) and 183.355(1)(b).]