Tax News

CCH (cch.taxgroup.com) reports:

  Legislation has been enacted relating to the computation of Georgia personal and corporate income taxes that requires a taxpayer to add back all expenses and costs paid, accrued, or incurred to a captive real estate investment trust (REIT), applicable to taxable years beginning on or after January 1, 2010. The amount of the adjustment is reduced, but not below zero, to the extent the corresponding expenses and costs received as income by the captive REIT are reduced by expenses paid, accrued, or incurred to persons that are not related members. The law also provides for a reduction of the adjustment, but not below zero, to the extent that the corresponding expenses and costs are received as income in an arm's length transaction by the captive REIT and to the extent that such income is allocated or apportioned, or both, to and taxed by Georgia or another state that imposes a tax on or measured by the income of the captive REIT. In addition, the Commissioner is authorized to reverse the adjustment, in whole or in part, when the taxpayer and Commissioner agree in writing to use an alternative method of apportionment. The adjustment applies to a corporation that files a separate return with Georgia and to the separate taxable income computation of each member of a Georgia consolidated return. The penalty for failure to make the adjustment is 10% of the additional tax owed, in addition to other penalties imposed.

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  Act 170 (H.B. 379), Laws 2009, effective May 5, 2009, applicable as noted