701—52.16 (422) Franchise tax credit. For tax years beginning on or after January 1, 1998, a shareholder in a financial institution as defined in Section 581 of the Internal Revenue Code which has elected to have its income taxed directly to the shareholders may take a tax credit equal to the shareholder’s pro rata share of the Iowa franchise tax paid by the financial institution.
The credit must be computed by recomputing the amount of tax computed under Iowa Code section 422.33 by reducing the shareholder’s taxable income by the shareholder’s pro rata share of the items of income and expenses of the financial institution and deducting from the recomputed tax the credits allowed by Iowa Code section 422.33. The recomputed tax must be subtracted from the amount of tax computed under Iowa Code section 422.33 reduced by the credits allowed in Iowa Code section 422.33.
The resulting amount, not to exceed the shareholder’s pro rata share of the franchise tax paid by the financial institution, is the amount of tax credit allowed the shareholder.
This rule is intended to implement Iowa Code section 422.33, as amended by 1999 Iowa Acts, chapter 95.