(a) Whenever the Internal Revenue Code of 1986 provides
that a separate taxable estate or entity is created in a case concerning a
debtor under this title, and the income, gain, loss, deductions, and credits
of such estate shall be taxed to or claimed by the estate, a separate taxable
estate is also created for purposes of any State and local law imposing a tax
on or measured by income and such income, gain, loss, deductions, and credits
shall be taxed to or claimed by the estate and may not be taxed to or claimed
by the debtor. The preceding sentence shall not apply if the case is
dismissed. The trustee shall make tax returns of income required under any
such State or local law.
(b) Whenever the Internal Revenue Code of 1986 provides that no separate
taxable estate shall be created in a case concerning a debtor under this
title, and the income, gain, loss, deductions, and credits of an estate shall
be taxed to or claimed by the debtor, such income, gain, loss, deductions, and
credits shall be taxed to or claimed by the debtor under a State or local law
imposing a tax on or measured by income and may not be taxed to or claimed by
the estate. The trustee shall make such tax returns of income of corporations
and of partnerships as are required under any State or local law, but with
respect to partnerships, shall make such returns only to the extent such
returns are also required to be made under such Code. The estate shall be
liable for any tax imposed on such corporation or partnership, but not for any
tax imposed on partners or members.
(c) With respect to a partnership or any entity treated as a partnership
under a State or local law imposing a tax on or measured by income that is a
debtor in a case under this title, any gain or loss resulting from a
distribution of property from such partnership, or any distributive share of
any income, gain, loss, deduction, or credit of a partner or member that is
distributed, or considered distributed, from such partnership, after the
commencement of the case, is gain, loss, income, deduction, or credit, as the
case may be, of the partner or member, and if such partner or member is a
debtor in a case under this title, shall be subject to tax in accordance with
subsection (a) or (b).
(d) For purposes of any State or local law imposing a tax on or measured by
income, the taxable period of a debtor in a case under this title shall
terminate only if and to the extent that the taxable period of such debtor
terminates under the Internal Revenue Code of 1986.
(e) The estate in any case described in subsection (a) shall use the same
accounting method as the debtor used immediately before the commencement of
the case, if such method of accounting complies with applicable nonbankruptcy
tax law.
(f) For purposes of any State or local law imposing a tax on or measured by
income, a transfer of property from the debtor to the estate or from the
estate to the debtor shall not be treated as a disposition for purposes of any
provision assigning tax consequences to a disposition, except to the extent
that such transfer is treated as a disposition under the Internal Revenue Code
of 1986.
(g) Whenever a tax is imposed pursuant to a State or local law imposing a
tax on or measured by income pursuant to subsection (a) or (b), such tax shall
be imposed at rates generally applicable to the same types of entities under
such State or local law.
(h) The trustee shall withhold from any payment of claims for wages,
salaries, commissions, dividends, interest, or other payments, or collect, any
amount required to be withheld or collected under applicable State or local
tax law, and shall pay such withheld or collected amount to the appropriate
governmental unit at the time and in the manner required by such tax law, and
with the same priority as the claim from which such amount was withheld or
collected was paid.
(i)
(1) To the extent that any State or local law imposing a tax on or
measured by income provides for the carryover of any tax attribute from one
taxable period to a subsequent taxable period, the estate shall succeed to
such tax attribute in any case in which such estate is subject to tax under
subsection (a).
(2) After such a case is closed or dismissed, the debtor shall succeed to
any tax attribute to which the estate succeeded under paragraph (1) to the
extent consistent with the Internal Revenue Code of 1986.
(3) The estate may carry back any loss or tax attribute to a taxable
period of the debtor that ended before the date of the order for relief
under this title to the extent that--
(A) applicable State or local tax law provides for a carryback in the
case of the debtor; and
(B) the same or a similar tax attribute may be carried back by the
estate to such a taxable period of the debtor under the Internal Revenue
Code of 1986.
(j)
(1) For purposes of any State or local law imposing a tax on or measured
by income, income is not realized by the estate, the debtor, or a successor
to the debtor by reason of discharge of indebtedness in a case under this
title, except to the extent, if any, that such income is subject to tax
under the Internal Revenue Code of 1986.
(2) Whenever the Internal Revenue Code of 1986 provides that the amount
excluded from gross income in respect of the discharge of indebtedness in a
case under this title shall be applied to reduce the tax attributes of the
debtor or the estate, a similar reduction shall be made under any State or
local law imposing a tax on or measured by income to the extent such State
or local law recognizes such attributes. Such State or local law may also
provide for the reduction of other attributes to the extent that the full
amount of income from the discharge of indebtedness has not been applied.
(k)
(1) Except as provided in this section and section
505, the time and manner of filing tax returns and the items of income,
gain, loss, deduction, and credit of any taxpayer shall be determined under
applicable nonbankruptcy law.
(2) For Federal tax purposes, the provisions of this section are subject
to the Internal Revenue Code of 1986 and other applicable Federal
nonbankruptcy law.
[Rev. 4-30-05]