WILLIAM DONALD SCHAEFER, Governor

Governor

House Bill No. 1389

AN ACT concerning

Income Tax - Tax Preference

FOR the purpose of altering certain references and deleting
certain obsolete references to the Internal Revenue Code to
account for changes in federal law relating to items of tax
preference; specifying a certain amount to be exempt from
taxation as tax preference items; and providing for
application of this Act.

BY repealing and reenacting, with amendments,

Article 81 - Revenue and Taxes

Section 280B

Annotated Code of Maryland

(1980 Replacement Volume and 1986 Supplement)

SECTION 1. BE IT ENACTED BY THE GENERAL ASSEMBLY OF
MARYLAND, That the Laws of Maryland read as follows:

Article 81 - Revenue and Taxes

280B.

(a)  For purposes of this subtitle, items of tax preference
are determined and defined in §§ 57 and [58] 59 of the Internal
Revenue Code, as amended from time to time, excluding the oil
percentage depletion allowance as claimed and allowed under § 613
of the Internal Revenue Code, as amended from time to time, the
sum total of which is in excess of [the amount specified in § 56
(a) (1) of the Internal Revenue Code, as amended from time to
time,] $10,000 IN THE CASE OF A INDIVIDUAL RETURN OR $20,000 IN
THE CASE OF A JOINT RETURN, as modified and apportioned under the
provisions of § [58] 59 of the Internal Revenue Code, as amended
from time to time.

(b)  A "tax option" corporation which has elected to file
its federal income tax return under the provisions of § 1371 of
Subchapter "S" of the Internal Revenue Code and for purposes of
subsection (a) of this section, shall account for its tax
preference items as belonging to the individual shareholders of
the corporation. A pro rata apportionment of the items of tax
preference is reportable by each shareholder on his individual
return in a manner consistent with federal requirements.

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