                                 CODE OF VIRGINIA

TRANSITIONAL MODIFICATIONS TO VIRGINIA TAXABLE INCOME (§ 58.1-315)

The modifications of Virginia taxable income to be made in accordance with
subdivision 2 of § 58.1-322.04 and subsection D of § 58.1-402, so long as
applicable, are as follows:

1. There shall be subtracted from Virginia taxable income the amount necessary
to prevent the taxation under this chapter of any annuity or of any other amount
of income or gain which was properly included in income or gain and was taxable
under Articles 1, 2, 3, 4, 5, 6, or 7 (&#xA7;&#xA7; 58-77 through 58-151) of
Chapter 4 of Title 58 to the taxpayer prior to the repeal thereof, or to a
decedent by reason of whose death the taxpayer acquires the right to receive the
income or gain, or to a trust or estate from which the taxpayer received the
income or gain.

2. The carry-back of net operating losses or net capital losses to reduce
taxable income of taxable years beginning prior to January 1, 1972, shall not be
permitted. Where a taxpayer would have been allowed to deduct an amount as a net
operating loss carry-over or net capital loss carry-over in determining taxable
income for a taxable year beginning after December 31, 1971, but for the fact
that such loss, or a portion of such loss, had been carried back in determining
taxable income for a taxable year beginning prior to January 1, 1972, there
shall be added to Virginia taxable income any amount which was actually deducted
in determining taxable income as a net operating loss carry-over or net capital
loss carry-over and there shall be subtracted from Virginia taxable income the
amount which could have been deducted as a net operating loss carry-over or net
capital loss carry-over in arriving at taxable income but for the fact that such
loss, or a portion of such loss, had been carried back for federal purposes.

3. There shall be added to Virginia taxable income the amount necessary to
prevent the deduction under this chapter of any item which was properly
deductible by the taxpayer in determining a tax under &#xA7;&#xA7; 58-77 through
58-151 prior to the repeal thereof.

4. There shall be subtracted from Virginia taxable income that portion of any
accumulation distribution which is allocable, under the laws of the United
States relating to federal income taxes, to undistributed net income of a trust
for any taxable year beginning on or before December 31, 1971. The rules
prescribed by such laws of the United States with reference to any such
accumulation distribution shall be applied, mutatis mutandis, to allow for this
limitation; and, without limiting the generality of the foregoing, the credit
provided by &#xA7; 58.1-370 in the case of accumulation distributions shall in
no instance encompass any part of any tax paid for a taxable year beginning on
or before December 31, 1971.

5. As to gain or loss attributable to the sale or exchange of nondepreciable
property, Virginia taxable income shall be adjusted to effect a reduction in
such gain or increase in such loss by the amount by which the adjusted basis of
such property, determined for Virginia income tax purposes at the close of the
taxable period immediately preceding the first taxable period to which Articles
7.1 to 7.6 (&#xA7; 58-151.01 et seq.) of Title 58 applied prior to repeal
thereof exceeds the adjusted basis of such property for federal income tax
purposes determined at the close of the same period.

6. There shall be subtracted from the Virginia taxable income of a shareholder
of an electing small business corporation any amount included in his taxable
income as his share of the undistributed taxable income of such corporation for
any year of the corporation beginning before January 1, 1972.

7. There shall be subtracted from federal taxable income amounts which would
have been deductible by the corporation in computing federal taxable income but
for the election of such corporation of the additional investment tax credit
under &#xA7; 46(a)(2)(B) of the Internal Revenue Code in effect on January 1,
1978.

HISTORY: Code 1950, § 58-151.0111; 1971, Ex. Sess., c. 171; 1972, c. 827; 1973,
c. 323; 1974, c. 248; 1981, c. 402; 1984, c. 675; 2017, c. 444.