The circumstances under which the adjustment provided in ORS § 314.115 is authorized are as follows:

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(1) The determination requires the inclusion in gross income of an item that was erroneously included in the gross income of the taxpayer for another taxable year or in the gross income of a related taxpayer.

(2) The determination allows a deduction or credit that was erroneously allowed to the taxpayer for another taxable year or to a related taxpayer.

(3)(a) The determination requires the exclusion from gross income of an item included in a return filed by the taxpayer or with respect to which tax was paid and that was erroneously excluded or omitted from the gross income of the taxpayer for another taxable year, or from the gross income of a related taxpayer; or

(b) The determination requires the exclusion from gross income of an item not included in a return filed by the taxpayer and with respect to which the tax was not paid but that is includable in the gross income of the taxpayer for another taxable year or in the gross income of a related taxpayer.

(4) The determination disallows a deduction or credit that should have been allowed to, but was not allowed to, the taxpayer for another taxable year, or to a related taxpayer.

(5) The determination allows or disallows any of the additional deductions allowable in computing the taxable income of estates or trusts, or requires or denies any of the inclusions in the computation of taxable income of beneficiaries, heirs or legatees, specified in sections 641 to 679 of the Internal Revenue Code, or corresponding provisions of subsequent internal revenue laws, and the correlative inclusion or deduction, as the case may be, has been erroneously excluded, omitted or included, or disallowed, omitted or allowed, as the case may be in respect of the related taxpayer.

(6) The determination allows or disallows a deduction (including a credit) in computing the taxable income (or, as the case may be, net income, normal tax net income or surtax net income) of a corporation, and a correlative deduction or credit has been erroneously allowed, omitted or disallowed, as the case may be, in respect of a related taxpayer described in ORS § 314.105 (2)(g).

(7)(a) The determination determines the basis of property, and in respect of any transaction on which such basis depends, or in respect of any transaction that was erroneously treated as affecting such basis, there occurred, with respect to a taxpayer described in paragraph (b) of this subsection, any of the errors described in paragraph (c) of this subsection.

(b) The taxpayer with respect to whom the erroneous treatment occurred must be:

(A) The taxpayer with respect to whom the determination is made;

(B) A taxpayer who acquired title to the property in the transaction and from whom, mediately or immediately, the taxpayer with respect to whom the determination is made derived title; or

(C) A taxpayer who had title to the property at the time of the transaction and from whom, mediately or immediately, the taxpayer with respect to whom the determination is made derived title, if the basis of the property in the hands of the taxpayer with respect to whom the determination is made is determined under section 1015(a) of the Internal Revenue Code.

(c) With respect to a taxpayer described in paragraph (b) of this subsection, there was an erroneous inclusion in, or omission from, gross income, there was an erroneous recognition, or nonrecognition, of gain or loss, or there was an erroneous deduction of an item properly chargeable to capital account or an erroneous charge to capital account of an item properly deductible. [1971 c.248 § 4; 1983 c.162 § 50; 1987 c.293 § 52; 2005 c.94 § 77]

[1953 c.702 § 3; repealed by 1971 c.248 § 6]