IL SB1739

Amends the Illinois Income Tax Act to establish a new method for allocating capital gains and losses from sales or exchanges of Subchapter S corporation shares or partnership interests (excluding investment partnerships) to Illinois

Requires gains and losses from pass-through entity sales to be allocated based on the average of the entity's Illinois apportionment factor over three years: the year of sale and the two immediately preceding tax years

For pass-through entities in existence less than three years, the allocation average is calculated using only the years the entity actually existed

Applies to pass-through entities that are taxable in Illinois, with the allocation determined in proportion to the entity's Illinois business activity as computed under Section 304