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01/13/21 REVISOR EAP/HR 21-01750 4.1 EFFECTIVE DATE. This section is effective for taxable years beginning after December 4.2 31, 2020. 4.3 Sec. 5. Minnesota Statutes 2020, section 290.01, subdivision 19, is amended to read: 4.4 Subd. 19. Net income. (a) For a trust or estate taxable under section 290.03, and a 4.5 corporation taxable under section 290.02, the term "net income" means the federal taxable 4.6 income, as defined in section 63 of the Internal Revenue Code of 1986, as amended through 4.7 the date named in this subdivision, incorporating the federal effective dates of changes to 4.8 the Internal Revenue Code and any elections made by the taxpayer in accordance with the 4.9 Internal Revenue Code in determining federal taxable income for federal income tax 4.10 purposes, and with the modifications provided in sections 290.0131 to 290.0136. 4.11 (b) For an individual, the term "net income" means federal adjusted gross income with 4.12 the modifications provided in sections 290.0131, 290.0132, and 290.0135 to 290.0137. 4.13 (c) In the case of a regulated investment company or a fund thereof, as defined in section 4.14 851(a) or 851(g) of the Internal Revenue Code, federal taxable income means investment 4.15 company taxable income as defined in section 852(b)(2) of the Internal Revenue Code, 4.16 except that: 4.17 (1) the exclusion of net capital gain provided in section 852(b)(2)(A) of the Internal 4.18 Revenue Code does not apply; 4.19 (2) the deduction for dividends paid under section 852(b)(2)(D) of the Internal Revenue 4.20 Code must be applied by allowing a deduction for capital gain dividends and exempt -interest 4.21 dividends as defined in sections 852(b)(3)(C) and 852(b)(5) of the Internal Revenue Code; 4.22 and 4.23 (3) the deduction for dividends paid must also be applied in the amount of any 4.24 undistributed capital gains which the regulated investment company elects to have treated 4.25 as provided in section 852(b)(3)(D) of the Internal Revenue Code. 4.26 (d) The net income of a real estate investment trust as defined and limited by section 4.27 856(a), (b), and (c) of the Internal Revenue Code means the real estate investment trust 4.28 taxable income as defined in section 857(b)(2) of the Internal Revenue Code. 4.29 (e) The net income of a designated settlement fund as defined in section 468B(d) of the 4.30 Internal Revenue Code means the gross income as defined in section 468B(b) of the Internal 4.31 Revenue Code. Sec. 5. 4