Browse Arkansas Code titles and sections
26-51-403. Income generally.
Arkansas Code — all titles (historical 2020) · legal_authorities
26-51-403. Income generally.
(a) The term “net income” means the adjusted gross income of a taxpayer less the deductions allowed by the Income Tax Act of 1929, § 26-51-101 et seq.
(b) “Adjusted gross income” means, in the case of an individual, gross income minus the following deductions:
(1) Trade and business deductions otherwise allowable as deductions under this chapter that are attributable to a trade or business carried on by the taxpayer if the trade or business does not consist of the performance of services by the taxpayer as an employee;
(2) Trade and business deductions of employees otherwise allowable as deductions under this chapter;
(3) Deductions that consist of expenses paid or incurred by the taxpayer in connection with the performance by him or her of services as an employee under a reimbursement or other expense allowance arrangement with his or her employer;
(4) Losses from the sale or exchange of property;
(5) Deductions attributable to property held for the production of rents and royalties;
(6)(A) Certain deductions of life tenants and income beneficiaries of property.
(B) In the case of a life tenant of property, an income beneficiary of property held in trust, or an heir, legatee, or devisee of an estate, the deduction for depreciation allowed by 26 U.S.C. § 167, as provided in § 26-51-428, and the deduction allowed by 26 U.S.C. § 611, as provided in § 26-51-429;
(7) Deductions for certain portions of lump-sum distributions from pension plans taxed under 26 U.S.C. § 402(e), as set forth in § 26-51-414;
(8) Deductions for moving expenses, as set forth in § 26-51-423(a)(4);
(9) Deductions for alimony payments;
(10) Deductions for separate maintenance payments;
(11) Deductions for interest forfeited to a bank, savings as
Source: Arkansas Code — historical release 78 (November 6, 2020) · 26-51-403
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. A text match is a research starting point; applicability is not established.
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Stable record: arkansas_code:legal_authorities:26-51-403
Source file: gov.ar.code.title.26.odt
Pages: Not recorded – Not recorded
Passage SHA-256: 09c224c89d10afd5ca4c035eb77c40597f128d06c9e412078b840a9f12a02918
Source location: content.xml paragraph 12216
Stored source content
26-51-403. Income generally.
(a) The term “net income” means the adjusted gross income of a taxpayer less the deductions allowed by the Income Tax Act of 1929, § 26-51-101 et seq.
(b) “Adjusted gross income” means, in the case of an individual, gross income minus the following deductions:
(1) Trade and business deductions otherwise allowable as deductions under this chapter that are attributable to a trade or business carried on by the taxpayer if the trade or business does not consist of the performance of services by the taxpayer as an employee;
(2) Trade and business deductions of employees otherwise allowable as deductions under this chapter;
(3) Deductions that consist of expenses paid or incurred by the taxpayer in connection with the performance by him or her of services as an employee under a reimbursement or other expense allowance arrangement with his or her employer;
(4) Losses from the sale or exchange of property;
(5) Deductions attributable to property held for the production of rents and royalties;
(6)(A) Certain deductions of life tenants and income beneficiaries of property.
(B) In the case of a life tenant of property, an income beneficiary of property held in trust, or an heir, legatee, or devisee of an estate, the deduction for depreciation allowed by 26 U.S.C. § 167, as provided in § 26-51-428, and the deduction allowed by 26 U.S.C. § 611, as provided in § 26-51-429;
(7) Deductions for certain portions of lump-sum distributions from pension plans taxed under 26 U.S.C. § 402(e), as set forth in § 26-51-414;
(8) Deductions for moving expenses, as set forth in § 26-51-423(a)(4);
(9) Deductions for alimony payments;
(10) Deductions for separate maintenance payments;
(11) Deductions for interest forfeited to a bank, savings association, et cetera, on premature withdrawals from time savings accounts or deposits;
(12) Deductions allowed for cash payments to individual retirement accounts and deductions allowed for cash payments to retirement savings plans of certain married individuals to cover a nonworking spouse;
(13) Deductions for contributions by self-employed persons to pension, profit-sharing, and annuity plans;
(14) The border city exemption as provided by § 26-52-601 et seq.;
(15) Deductions for the health insurance costs of self-employed persons as computed in accordance with § 26-51-423(c);
(16) Deductions for contributions to a long-term intergenerational trust created pursuant to the Long-Term Intergenerational Security Act of 1995, § 28-72-501 et seq.; and
(17) Deductions for contributions to the Arkansas Tax-Deferred Tuition Savings Program not to exceed five thousand dollars ($5,000) per taxpayer under § 6-84-111(b).
(c)(1) The net income shall be computed upon the basis of the taxpayer's annual accounting period, either fiscal or calendar year, in accordance with the method of accounting regularly employed in keeping the books of the taxpayer.
(2) If no such method of accounting has been employed or if the method employed does not clearly reflect the income, the computation shall be made upon such basis and in such manner as in the opinion of the Secretary of the Department of Finance and Administration does clearly reflect the income.
(3) If the taxpayer's annual accounting period is other than a fiscal year as defined by the Income Tax Act of 1929, § 26-51-101 et seq., or he or she has no annual accounting period, or does not keep books, the net income shall be computed upon the basis of the calendar year.
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Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** There shall be allowed as a depreciation deduction a reasonable allowance for the exhaustion, wear and tear (including a reasonable allowance for obsolescence)—
(1) of property used in the trade or business, or
(2) of property held for the production of income.
**(b) Cross reference** For determination of depreciation deduction in case of property to which section 168 applies, see section 168.
**(c) Basis for depreciation**
(1) **In general** — The basis on which exhaustion, wear and tear, and obsolescence are to be allowed in respect of any property shall be the adjusted basis provided in section 1011, for the purpose of determining the gain on the sale or other disposition of such property.
(2) **Special rule for property subject to lease** — If any property is acquired subject to a lease—
(A) no portion of the adjusted basis shall be allocated to the leasehold interest, and
(B) the entire adjusted basis shall be taken into account in determining the depreciation deduction (if any) with respect to the property subject to the lease.
**(d) Life tenants and beneficiaries of trusts and estates** In the case of property held by one person for life with remainder to another person, the deduction shall be computed as if the life tenant were the absolute owner of the property and shall be allowed to the life tenant. In the case of property held in trust, the allowable deduction shall be apportioned between the income beneficiaries and the trustee in accordance with the pertinent provisions of the instrument creating the trust, or, in the absence of such provisions, on the basis of the trust income allocable to each. In the case of an estate, the allowable deduction shall be apportioned between the estate and the heirs, legatees, and devisees
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 167
Stored review status: release_metadata_unconfirmed. The source passage cites 26 U.S.C. § 167. This identifies an authority to review, not proof of applicability.
Federal law — U.S. Code and appendices · legal_authorities
Page 774
TITLE 26—INTERNAL REVENUE CODE
§ 167
EFFECTIVE DATE OF 1969 AMENDMENT
Amendment by Pub. L. 91–172 applicable to taxable
years beginning after July 11, 1969, see section 431(d) of
Pub. L. 91–172, set out as an Effective Date note under
section 585 of this title.
EFFECTIVE DATE OF 1966 AMENDMENT
Pub. L. 89–722, § 2, Nov. 2, 1966, 80 Stat. 1152, as amend-
ed by Pub. L. 99–514, § 2, Oct. 22, 1986, 100 Stat. 2095, pro-
vided that:
‘‘(a) Except as provided in subsections (b) and (c), the
amendments made by the first section of this Act
[amending this section and section 81 of this title] shall
apply to taxable years ending after October 21, 1965.
‘‘(b) If—
‘‘(1) the taxpayer before October 22, 1965, claimed a
deduction, for a taxable year ending before such date,
under section 166(c) of the Internal Revenue Code of
1986 [formerly I.R.C. 1954] for an addition to a reserve
for bad debts on account of debt obligations described
in section 166(g)(1)(A) of such Code (as amended by
the first section of this Act), and
‘‘(2) the assessment of a deficiency of the tax im-
posed by chapter 1 of such Code for such taxable year
and each subsequent taxable year ending before Octo-
ber 22, 1965, is not prevented on December 31, 1966, by
the operation of any law or rule of law,
then such deduction on account of such debt obliga-
tions shall be allowed for each such taxable year under
such section 166(c) to the extent that the deduction
would have been allowable under the provisions of such
section 166(g)(1)(A) if such provisions applied to such
taxable years.
‘‘(c) Section 166(g)(2) of the Internal Revenue Code of
1986 (as amended by the first section of this Act) shall
apply to taxable years beginning after December 31,
1953, and ending after August 16,
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 167
Stored review status: historical_2024_not_currentness_verified. The source passage cites 26 U.S.C. § 167. This identifies an authority to review, not proof of applicability.
Federal law — U.S. Code and appendices · legal_authorities
**(a) Taxability of beneficiary of exempt trust** Except as otherwise provided in this section, any amount actually distributed to any distributee by any employees’ trust described in section 401(a) which is exempt from tax under section 501(a) shall be taxable to the distributee, in the taxable year of the distributee in which distributed, under section 72 (relating to annuities).
**(b) Taxability of beneficiary of nonexempt trust**
(1) **Contributions** — Contributions to an employees’ trust made by an employer during a taxable year of the employer which ends with or within a taxable year of the trust for which the trust is not exempt from tax under section 501(a) shall be included in the gross income of the employee in accordance with section 83 (relating to property transferred in connection with performance of services), except that the value of the employee’s interest in the trust shall be substituted for the fair market value of the property for purposes of applying such section.
(2) **Distributions** — The amount actually distributed or made available to any distributee by any trust described in paragraph (1) shall be taxable to the distributee, in the taxable year in which so distributed or made available, under section 72 (relating to annuities), except that distributions of income of such trust before the annuity starting date (as defined in section 72(c)(4)) shall be included in the gross income of the employee without regard to section 72(e)(5) (relating to amounts not received as annuities).
(3) **Grantor trusts** — A beneficiary of any trust described in paragraph (1) shall not be considered the owner of any portion of such trust under subpart E of part I of subchapter J (relating to grantors and others treated as substantial owners).
(4) **Failure t
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 402
Stored review status: release_metadata_unconfirmed. The source passage cites 26 U.S.C. § 402. This identifies an authority to review, not proof of applicability.
Federal law — U.S. Code and appendices · legal_authorities
Page 1240
TITLE 26—INTERNAL REVENUE CODE
§ 402
‘‘(1) for purposes of chapter 1 of the Internal Rev-
enue Code of 1986 (relating to normal taxes and
surtaxes), such regulations shall not apply before
January 1, 1980; and
‘‘(2) for purposes of chapter 21 of such Code (relat-
ing to Federal Insurance Contributions Act) and for
purposes of chapter 24 of such Code (relating to col-
lection of income tax at source on wages), such regu-
lations shall not apply before the day on which such
regulations are issued in final form.
‘‘(e) SALARY REDUCTION REGULATIONS DEFINED.—For
purpose of this section, the term ‘salary reduction reg-
ulations’
means
regulations
dealing
with
the
includibility in gross income (at the time of contribu-
tion) of amounts contributed to a plan which includes
a trust that qualifies under section 401(a) [subsec. (a) of
this section], or a plan described in section 403(a) or
405(a), including plans or arrangements described in
subsection (b)(2), if the contribution is made under an
arrangement under which the contribution will be
made only if the employee elects to receive a reduction
in his compensation or to forego an increase in his
compensation, or under an arrangement under which
the employee is permitted to elect to receive part of his
compensation in one or more alternative forms (if one
of such forms results in the inclusion of amounts in in-
come under the Internal Revenue Code of 1986).’’
[Pub. L. 95–615, § 210(b), Nov. 8, 1978, 92 Stat. 3109, pro-
vided that: ‘‘Section 5 of this Act [amending section
2006 of Pub. L. 93–406, set out above] shall not apply
with respect to any type of plan for any period for
which rules for that type of plan are provided by the
Revenue Act of 1978 [Pub. L. 95–600, see Short Title of
1978
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 402
Stored review status: historical_2024_not_currentness_verified. The source passage cites 26 U.S.C. § 402. This identifies an authority to review, not proof of applicability.
Federal law — U.S. Code and appendices · legal_authorities
**(a) General rule** In the case of mines, oil and gas wells, other natural deposits, and timber, there shall be allowed as a deduction in computing taxable income a reasonable allowance for depletion and for depreciation of improvements, according to the peculiar conditions in each case; such reasonable allowance in all cases to be made under regulations prescribed by the Secretary. For purposes of this part, the term “mines” includes deposits of waste or residue, the extraction of ores or minerals from which is treated as mining under section 613(c). In any case in which it is ascertained as a result of operations or of development work that the recoverable units are greater or less than the prior estimate thereof, then such prior estimate (but not the basis for depletion) shall be revised and the allowance under this section for subsequent taxable years shall be based on such revised estimate.
**(b) Special rules**
(1) **Leases** — In the case of a lease, the deduction under this section shall be equitably apportioned between the lessor and lessee.
(2) **Life tenant and remainderman** — In the case of property held by one person for life with remainder to another person, the deduction under this section shall be computed as if the life tenant were the absolute owner of the property and shall be allowed to the life tenant.
(3) **Property held in trust** — In the case of property held in trust, the deduction under this section shall be apportioned between the income beneficiaries and the trustee in accordance with the pertinent provisions of the instrument creating the trust, or, in the absence of such provisions, on the basis of the trust income allocable to each.
(4) **Property held by estate** — In the case of an estate, the deduction under this section shall b
Source: Supplied U.S. Code snapshot — release unconfirmed · 26 U.S.C. § 611
Stored review status: release_metadata_unconfirmed. The source passage cites 26 U.S.C. § 611. This identifies an authority to review, not proof of applicability.
Federal law — U.S. Code and appendices · legal_authorities
Page 1793
TITLE 26—INTERNAL REVENUE CODE
§ 611
1 Editorially supplied. Section 613A added by Pub. L. 94–12
without corresponding amendment of part analysis.
Act of 1986 [Pub. L. 99–514, amending section 368 of this
title, repealing this section and enacting provisions set
out as notes under sections 368 and 597 of this title]
(other
than
subsection
(c)(2)(B)
thereof
[section
904(c)(2)(B) of Pub. L. 99–514, formerly set out as a note
above]) is hereby repealed and the Internal Revenue
Code of 1986 shall be applied as if the amendments made
by such section had not been enacted.’’
REFERENCES TO FEDERAL SAVINGS AND LOAN
INSURANCE CORPORATION
Pub. L. 101–73, title XIV, § 1401(c)(7), Aug. 9, 1989, 103
Stat. 550, provided that: ‘‘Any reference to the Federal
Savings and Loan Insurance Corporation in section 597
of the Internal Revenue Code of 1986 (as in effect on the
day before the date of the enactment of this Act [Aug.
9, 1989]) shall be treated as including a reference to the
Resolution Trust Corporation and the FSLIC Resolu-
tion Fund.’’
ANNUAL REPORTS ON TRANSACTIONS IN WHICH FEDERAL
FINANCIAL ASSISTANCE PROVIDED
Pub. L. 101–73, title XIV, § 1403, Aug. 9, 1989, 103 Stat.
551, which required the Secretary of the Treasury to
submit annual reports to the Senate and to the Com-
mittee on Ways and Means of the House of Representa-
tives on transactions with respect to which Federal fi-
nancial assistance subject to this section was provided,
terminated, effective May 15, 2000, pursuant to section
3003 of Pub. L. 104–66, as amended, set out as a note
under section 1113 of Title 31, Money and Finance. See,
also, page 142 of House Document No. 103–7.
[§ 601. Repealed. Pub. L. 94–455, title XIX,
§ 1901(a)(85), Oct. 4, 1976, 90 Stat. 1778]
Section,
Source: Supplied 2024 U.S. Code historical extraction · 26 U.S.C. § 611
Stored review status: historical_2024_not_currentness_verified. The source passage cites 26 U.S.C. § 611. This identifies an authority to review, not proof of applicability.
Arkansas Code — all titles (historical 2020) · legal_authorities
26-51-101. Title.
This act shall be known and may be cited as the “Income Tax Act of 1929”.
Source: Arkansas Code — historical release 78 (November 6, 2020) · 26-51-101
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 26-51-101. This identifies an authority to review, not proof of applicability.
Arkansas Code — all titles (historical 2020) · legal_authorities
26-51-414. Deferred compensation plans.
(a)(1) The following sections relating to annuities, retirement savings, and employee benefit plans are adopted for the purpose of computing Arkansas income tax liability, except Arkansas capital gains treatment and the Arkansas tax rates shall apply:
(A) Title 26 U.S.C. §§ 72, 219, 402 — 404, 406 — 416, and 457, as in effect on January 1, 2017; and
(B) Title 26 U.S.C. § 401, as in effect on March 30, 2010.
(2) The requirements for filing a joint return under 26 U.S.C. § 219(c)(1)(A) shall not apply.
(b) Title 26 U.S.C. § 408A as in effect on January 1, 2010, relating to Roth individual retirement accounts, is adopted for the purpose of computing Arkansas income tax liability, except with regard to adjusted gross income under 26 U.S.C. § 408A(c)(3), which shall be determined in the same manner as under § 26-51-403(b).
(c) Any additional tax or penalty imposed by this section shall be ten percent (10%) of the amount of any additional tax or penalty provided in the federal income tax law adopted by this section.
(d) Title 26 U.S.C. § 1042, as in effect on January 1, 2003, regarding the deferral of gain realized on the sale of a corporation's shares of stock to the corporation's employee stock ownership plan (ESOP), is adopted for the purpose of computing Arkansas income tax liability.
Source: Arkansas Code — historical release 78 (November 6, 2020) · 26-51-414
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 26-51-414. This identifies an authority to review, not proof of applicability.
Arkansas Code — all titles (historical 2020) · legal_authorities
26-51-428. Depreciation — Deductions — Expensing of property. [Effective until contingency in Acts 2007, No. 613, § 2 is met.]
(a) Title 26 U.S.C. §§ 167 and 168(a)-(j), as in effect on January 1, 2019, and 26 U.S.C. § 179, as in effect on January 1, 2009, regarding depreciation and expensing of property, are adopted for the purpose of computing Arkansas income tax liability for property purchased in tax years beginning on or after January 1, 2014.
(b) The basis on which exhaustion, wear and tear, and obsolescence are to be allowed in respect to any property shall be the adjusted basis provided in § 26-51-411 for the purpose of determining the gain on the sale or other disposition of the property.
(c) Title 26 U.S.C. § 197, as in effect on January 1, 2007, regarding the amortization of goodwill and certain other intangibles, is adopted for the purpose of computing Arkansas income tax liability.
Source: Arkansas Code — historical release 78 (November 6, 2020) · 26-51-428
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 26-51-428. This identifies an authority to review, not proof of applicability.
Arkansas Code — all titles (historical 2020) · legal_authorities
26-51-428. Depreciation — Deductions — Expensing of property. [Effective if contingency in Acts 2007, No. 613, § 2 is met.]
(a) Title 26 U.S.C. §§ 167, 168, and 179A, as in effect on January 1, 1999, and 26 U.S.C. § 179 as in effect on January 1, 2007, regarding depreciation and expensing of property, are adopted for the purpose of computing Arkansas income tax liability.
(b) The basis on which exhaustion, wear and tear, and obsolescence are to be allowed in respect to any property shall be the adjusted basis provided in § 26-51-411 for the purpose of determining the gain on the sale or other disposition of the property.
(c) Title 26 U.S.C. § 197, as in effect on January 1, 2007, regarding the amortization of goodwill and certain other intangibles, is adopted for the purpose of computing Arkansas income tax liability.
Source: Arkansas Code — historical release 78 (November 6, 2020) · 26-51-428
Stored review status: Historical 2020-11-06 source release; later amendments not reconciled; machine-extracted, not independently legally reviewed; source heading status: text_in_historical_source. The source passage cites 26-51-428. This identifies an authority to review, not proof of applicability.