“Adjusted Federal Taxable Income,” for a person required to file as a C corporation, or for a person that has elected to be taxed as a C corporation under Section 1803.25(e) of this chapter, means a C corporation's federal taxable income before net operating losses and special deductions as determined under the Internal Revenue Code, adjusted as follows:
(a) Deduct intangible income to the extent included in federal taxable income. The deduction shall be allowed regardless of whether the intangible income relates to assets used in a trade or business or assets held for the production of income.
(b) Add an amount equal to five per cent (5%) of intangible income deducted under division (a) of this section, but excluding that portion of intangible income directly related to the sale, exchange, or other disposition of property described in Section 1221 of the Internal Revenue Code;
(c) Add any losses allowed as a deduction in the computation of federal taxable income if the losses directly relate to the sale, exchange, or other disposition of an asset described in Section 1221 or 1231 of the Internal Revenue Code;
(d) (1) Except as provided in division (d)(2) of this section, deduct income and gain included in federal taxable income to the extent the income and gain directly relate to the sale, exchange, or other disposition of an asset described in Sections 1221 or 1231 of the Internal Revenue Code;
(2) Division (d)(1) of this section does not apply to the extent the income or gain is income or gain described in Section 1245 or 1250 of the Internal Revenue Code.
(e) Add taxes on or measured by net income allowed as a deduction in the computation of federal taxable income;
(f) In the case of a real estate investment trust or regulated investment company, add all amounts with respect to dividends to, distributions to, or amounts set aside for or credited to the benefit of investors and allowed as a deduction in the computation of federal taxable income;
(g) Deduct, to the extent not otherwise deducted or excluded in computing federal taxable income, any income derived from a transfer agreement or from the enterprise transferred under that agreement under R.C. § 4313.02;
(h) Deduct exempt income to extent not otherwise deducted or excluded in computing adjusted federal taxable income.
(i) Deduct any net profit of a pass-through entity owned directly or indirectly by the taxpayer and included in the taxpayer's federal taxable income unless an affiliated group of corporations includes that net profit in the group's federal taxable income in accordance with Section 1806.03(e)(3)B.
(j) Add any loss incurred by a pass-through entity owned directly or indirectly by the taxpayer and included in the taxpayer's federal taxable income unless an affiliated group of corporations includes that loss in the group's federal taxable income in accordance with Section 1806.03(e)(3)B.
(k) If the taxpayer is not a C corporation, is not a disregarded entity that has made the election described in Section 1803.48(b) of this chapter, is not a publicly traded partnership that has made the election described in Section 1803.25(e) of this chapter, and is not an individual, the taxpayer is required to compute adjusted federal taxable income under this chapter as if the taxpayer were a C corporation, except guaranteed payments and other similar amounts paid or accrued to a partner, former partner, shareholder, former shareholder, member, or former member are not allowed as a deductible expense unless such payments are a pension or retirement benefit payment paid to a retired partner, retired shareholder, or retired member or are in consideration for the use of capital and treated as payment of interest under Section 469 of the Internal Revenue Code or United States treasury regulations. Amounts paid or accrued to a qualified self-employed retirement plan with respect to a partner, former partner, shareholder, former shareholder, member, or former member of the taxpayer, amounts paid or accrued to or for health insurance for a partner, former partner, shareholder, former shareholder, member, or former member, and amounts paid or accrued to or for life insurance for a partner, former partner, shareholder, former shareholder, member, or former member shall not be allowed as a deduction. Nothing in Section 1803.02 of this chapter permits a taxpayer to add or deduct any amount more than once, or permits a taxpayer to deduct any amount paid to or accrued for purposes of federal self-employment tax.
(Ord. 9984-2015. Passed 12-15-15; Ord. 11012-2018. Passed 1-23-18; Ord. 11375-2023. Passed 12-12-23.)