IDR State Tax Reform Guidance: Built-in Gains Tax on S Corporations

Monday - 01/27/2020

In 2018, the Iowa legislature enacted Senate File 2417, a state tax reform bill that includes extensive changes to the state’s tax structure. The Department has released guidance to explain the following tax change:

  • Built-In Gains Tax on S Corporation - The Department of Revenue has received several questions regarding the applicability of the federal S corporation built-in gains tax for Iowa tax purposes. This guidance is not a detailed analysis of the calculation of this federal tax, but is instead intended to generally describe Iowa’s conformity with the federal built-in gains tax on S corporations, with a particular focus on Iowa’s conformity since the change to the recognition period enacted in federal Public Law 114-113, Division Q, section 127, Commonly referred to as the Protecting Americans from Tax Hikes Act.

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