                                 CODE OF VIRGINIA

VIRGINIA TAXABLE INCOME; ADDITIONAL MODIFICATIONS (§ 58.1-322.04)

In calculating Virginia taxable income pursuant to § 58.1-322, the following
adjustments shall be made:

1. There shall be added to or subtracted from federal adjusted gross income, as
the case may be, the individual&#8217;s share, as beneficiary of an estate or
trust, of the Virginia fiduciary adjustment determined under &#xA7; 58.1-361.

2. There shall be added or subtracted, as the case may be, the amounts provided
in &#xA7; 58.1-315 as transitional modifications.

3. To the extent included in federal adjusted gross income, there shall be (i)
subtracted from federal adjusted gross income, by a shareholder of an electing
small business corporation (S corporation) that is subject to the bank franchise
tax imposed under Chapter 12 (&#xA7; 58.1-1200 et seq.) for the calendar year in
which such taxable year begins, the shareholder&#8217;s allocable share of the
income or gain of such electing small business corporation (S corporation) and
(ii) added back to federal adjusted gross income, such that federal adjusted
gross income shall be increased, by a shareholder of an electing small business
corporation (S corporation) that is subject to the bank franchise tax imposed
under Chapter 12 (&#xA7; 58.1-1200 et seq.) for the calendar year in which such
taxable year begins, the shareholder&#8217;s allocable share of the losses or
deductions of such electing small business corporation (S corporation).
			To the extent excluded from federal adjusted gross income, there shall be
added to federal adjusted gross income, by a shareholder of an electing small
business corporation (S corporation) that is subject to the bank franchise tax
imposed under Chapter 12 (&#xA7; 58.1-1200 et seq.) for the calendar year in
which such taxable year begins, the value of any distribution paid or
distributed to the shareholder by such electing small business corporation (S
corporation).

4. Notwithstanding any other provision of law, the income from any disposition
of real property that is held by the taxpayer for sale to customers in the
ordinary course of the taxpayer&#8217;s trade or business, as defined in &#xA7;
453(l)(1)(B) of the Internal Revenue Code, of property may, at the election of
the taxpayer, be recognized under the installment method described under &#xA7;
453 of the Internal Revenue Code, provided that (i) the election relating to the
dealer disposition of the property has been made on or before the due date
prescribed by law (including extensions) for filing the taxpayer&#8217;s return
of the tax imposed under this chapter for the taxable year in which the
disposition occurs and (ii) the dealer disposition is in accordance with
restrictions or conditions established by the Department, which shall be set
forth in guidelines developed by the Department. Along with such restrictions or
conditions, the guidelines shall also address the recapture of such income under
certain circumstances. The development of the guidelines shall be exempt from
the Administrative Process Act (&#xA7; 2.2-4000 et seq.).

HISTORY: 2017, c. 444.