Idaho State Statutes - Idaho Attorney Directory

For
taxable years commencing on and after January 1, 1999:
(1) Add interest and dividends received or accrued during the taxable
year from foreign securities and from securities issued by states and other
political subdivisions exempt from federal income tax under the Internal
Revenue Code, less applicable amortization.
(2) Subtract any expenses and interest not allowed under sections 265 and
291 of the Internal Revenue Code in computing taxable income, as defined in
section 63-3011B, Idaho Code, for interest on indebtedness incurred or
continued to purchase or to carry obligations the interest of which is not
subject to the taxes imposed under the Internal Revenue Code.
(3) Subtract interest and dividends received or accrued during the
taxable year from securities issued:
(a) By the federal government and its instrumentalities to the extent
included in taxable income and not subject to taxation by this state, and
(b) By the state of Idaho, its cities and political subdivisions, exempt
from federal income tax under the Internal Revenue Code.
(4) No deduction shall be allowed for interest on indebtedness incurred
or continued to purchase or to carry obligations the interest of which is not
subject to the taxes imposed under this chapter. The amount of interest on
indebtedness thus incurred or continued shall be an amount which bears the
same ratio to the aggregate amount allowable to the taxpayer as a deduction
for interest for the taxable year as the taxpayer's interest income from the
obligations mentioned in the preceding sentence bears to the taxpayer's total
income for the taxable year. "Aggregate amount allowable" means the taxpayer's
total interest expense deducted in determining taxable income as defined in
section 63-3011B, Idaho Code, plus interest expense disallowed under sections
265 and 291 of the Internal Revenue Code, plus interest expense from a
pass-through entity, plus the interest expense of a foreign corporation that,
pursuant to sections 63-3027 and 63-3027B through 63-3027E, Idaho Code, is
included in a combined report with the taxpayer less interest expense of any
corporation included with the taxpayer in a consolidated federal return but
not a part of the combined report filed with the state tax commission for the
same taxable year. The deduction under this subsection shall not exceed the
amount of interest and dividend income added pursuant to subsection (1) of
this section less interest and dividend income from the state of Idaho, its
cities and political subdivisions, subtracted pursuant to subsection (3) of
this section.
(5) No deduction shall be allowed for expenses (other than interest)
attributable to interest or dividend income which is not subject to the taxes
imposed under this chapter.

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