THE GENERAL ASSEMBLY OF PENNSYLVANIA

SENATE BILL

INTRODUCED BY CORMAN AND BRUBAKER, DECEMBER 6, 2011

SENATOR BRUBAKER, FINANCE, AS AMENDED, DECEMBER 14, 2011   

AN ACT

Amending the act of March 4, 1971 (P.L.6, No.2), entitled "An

act relating to tax reform and State taxation by codifying

and enumerating certain subjects of taxation and imposing

taxes thereon; providing procedures for the payment,

collection, administration and enforcement thereof; providing

for tax credits in certain cases; conferring powers and

imposing duties upon the Department of Revenue, certain

employers, fiduciaries, individuals, persons, corporations

and other entities; prescribing crimes, offenses and

penalties," in personal income tax, providing for

carryforward of losses by individual taxpayers; and further

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providing for limitation of pass-thru of losses to

shareholders.

The General Assembly of the Commonwealth of Pennsylvania

hereby enacts as follows:

Section 1.  The act of March 4, 1971 (P.L.6, No.2), known as

the Tax Reform Code of 1971, is amended by adding a section to

read:

Section 304.2.  Carryforward of Losses by Individual

Taxpayers.--(a)  An For the tax year beginning January 1, 2013,

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and each tax year thereafter, an individual taxpayer required to

file a return under this article shall be entitled to carry

forward loss within a class of income enumerated under section

303.

(b)  A taxpayer may not offset a gain within one class of

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income with a loss carried forward from a prior year in another

class of income.

(b) (c)  There shall be a carryforward period which may not

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exceed three taxable years.

(c) (d)  This section shall not apply to losses relating to

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income under section 303(a)(7).

Section 2.  Section 307.10 of the act, added December 23,

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1983 (P.L.370, No.90), is amended to read:

Section 307.10.  Limitation on Pass-thru of Losses to

Shareholders.--(a)  The aggregate amount of losses taken into

account by a shareholder of a Pennsylvania S corporation under

section 307.9 shall not exceed the sum of the adjusted basis of

the shareholder's stock in the Pennsylvania S corporation,

determined after applying section 307.11(a) for the taxable year

and the shareholder's adjusted basis of any indebtedness of the

Pennsylvania S corporation to the shareholder, determined before

applying section 307.11(d) for the taxable year.

(b)  [There] Except as provided under section 304.2, there 

shall be no carryover of losses by the shareholders of the

Pennsylvania S corporation.

Section 2 3.  This act shall take effect in 60 days 

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immediately.

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