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Chapter 290
Section 290.9728
Topics
Recent History
- 2016 Subd. 2 Amended 2016 c 158 art 3 s 25
- 2014 Subd. 2 Amended 2014 c 308 art 9 s 70
- 2003 Subd. 2 Amended 2003 c 2 art 1 s 33
- 1997 Subd. 1 Amended 1997 c 231 art 6 s 19
This is an historical version of this statute chapter. Also view the most recent published version.
290.9728 TAX ON CAPITAL GAINS.
Subdivision 1. Tax imposed. There is imposed a tax on the taxable income of an "S"
corporation that has:
(1) elected S corporation status pursuant to section 1362 of the Internal Revenue Code of
1986, as amended through December 31, 1986, before January 1, 1987;
(2) a net capital gain for the taxable year (i) in excess of $25,000 and (ii) exceeding 50
percent of the corporation's federal taxable income for the taxable year; and
(3) federal taxable income for the taxable year exceeding $25,000.
The tax is imposed at the rate prescribed by section 290.06, subdivision 1. For purposes of
this section, "federal taxable income" means federal taxable income determined under section
1374(4)(d) of the Internal Revenue Code. This section does not apply to an S corporation which
has had an election under section 1362 of the Internal Revenue Code of 1954, in effect for the three
immediately preceding taxable years. This section does not apply to an S corporation that has been
in existence for less than four taxable years and has had an election in effect under section 1362 of
the Internal Revenue Code of 1954 for each of the corporation's taxable years. For purposes of
this section, an S corporation and any predecessor corporation are treated as one corporation.
Subd. 2. Taxable income. For purposes of this section, taxable income means the lesser of:
(1) the amount of the net capital gain of the S corporation for the taxable year, as determined
under sections 1222 and 1374 of the Internal Revenue Code, and subject to the modifications
provided in section 290.01, subdivisions 19e and 19f, in excess of $25,000 that is allocable to this
state under section 290.17, 290.191, or 290.20; or
(2) the amount of the S corporation's federal taxable income, subject to the provisions of
section 290.01, subdivisions 19c to 19f, that is allocable to this state under section 290.17,
290.191, or 290.20.
History: 1987 c 268 art 1 s 126; 1988 c 719 art 2 s 48; 1989 c 28 s 25; 1990 c 604 art 2 s
16; 1991 c 291 art 6 s 46; 1992 c 511 art 6 s 19; 1993 c 375 art 8 s 14; 1994 c 587 art 1 s
24; 1997 c 231 art 6 s 19; 2003 c 2 art 1 s 33
Subdivision 1. Tax imposed. There is imposed a tax on the taxable income of an "S"
corporation that has:
(1) elected S corporation status pursuant to section 1362 of the Internal Revenue Code of
1986, as amended through December 31, 1986, before January 1, 1987;
(2) a net capital gain for the taxable year (i) in excess of $25,000 and (ii) exceeding 50
percent of the corporation's federal taxable income for the taxable year; and
(3) federal taxable income for the taxable year exceeding $25,000.
The tax is imposed at the rate prescribed by section 290.06, subdivision 1. For purposes of
this section, "federal taxable income" means federal taxable income determined under section
1374(4)(d) of the Internal Revenue Code. This section does not apply to an S corporation which
has had an election under section 1362 of the Internal Revenue Code of 1954, in effect for the three
immediately preceding taxable years. This section does not apply to an S corporation that has been
in existence for less than four taxable years and has had an election in effect under section 1362 of
the Internal Revenue Code of 1954 for each of the corporation's taxable years. For purposes of
this section, an S corporation and any predecessor corporation are treated as one corporation.
Subd. 2. Taxable income. For purposes of this section, taxable income means the lesser of:
(1) the amount of the net capital gain of the S corporation for the taxable year, as determined
under sections 1222 and 1374 of the Internal Revenue Code, and subject to the modifications
provided in section 290.01, subdivisions 19e and 19f, in excess of $25,000 that is allocable to this
state under section 290.17, 290.191, or 290.20; or
(2) the amount of the S corporation's federal taxable income, subject to the provisions of
section 290.01, subdivisions 19c to 19f, that is allocable to this state under section 290.17,
290.191, or 290.20.
History: 1987 c 268 art 1 s 126; 1988 c 719 art 2 s 48; 1989 c 28 s 25; 1990 c 604 art 2 s
16; 1991 c 291 art 6 s 46; 1992 c 511 art 6 s 19; 1993 c 375 art 8 s 14; 1994 c 587 art 1 s
24; 1997 c 231 art 6 s 19; 2003 c 2 art 1 s 33
Official Publication of the State of Minnesota
Revisor of Statutes