OAR 150-316-0569: Adjustment to Income for Basis Differences

On the return for the first taxable year beginning after December 31, 1995, federal taxable income shall be increased or decreased by an amount equal to the difference between the property’s adjusted federal basis as determined for regular tax purposes and its adjusted Oregon basis due to the use of different federal and Oregon depreciation methods, periods, or conventions, as defined by IRC 168. If the adjusted Oregon basis is less than the adjusted federal basis, the modification shall be an addition. If the adjusted Oregon basis is greater than the adjusted federal basis, the modification shall be a subtraction. For tax years beginning after December 31, 1996, no modifications to depreciation expense shall be made as a result of using different depreciation methods, periods, or conventions prior to January 1, 1996.