11 U.S.C. § 346 : US Code - Section 346: Special provisions related to the treatment of State and local taxes

Search 11 U.S.C. § 346 : US Code - Section 346: Special provisions related to the treatment of State and local taxes

(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.