Arkansas Code
Subchapter 4 - Computation of Tax Liability
§ 26-51-436. Deductions — Limitations

Notwithstanding any other provision of the Income Tax Act of 1929, § 26-51-101 et seq., with regard to deductions allowed in computing net income:
(1) Title 26 U.S.C. § 465, as in effect on January 1, 1987, is adopted to limit deductions claimed under the Income Tax Act of 1929, § 26-51-101 et seq., to the amount the taxpayer has at risk, as that term is used in the federal income tax law;
(2) Title 26 U.S.C. § 469, as in effect on January 1, 1997, regarding the limitations on deductibility of passive activity losses and credits, is adopted for the purpose of computing Arkansas income tax liability;
(3) Title 26 U.S.C. § 280F(a)-(d), as in effect on January 1, 2019, regarding investment tax credit and depreciation for luxury automobiles and other property, is adopted for purposes of computing Arkansas income tax liability;
(4) Title 26 U.S.C. § 68, as in effect on January 1, 2011, is adopted to limit itemized deductions;
(5) Title 26 U.S.C. § 220, as in effect on January 1, 2011, regarding the deductibility from income of contributions made to a medical savings account by the taxpayer or the taxpayer's employer, is adopted for the purpose of computing Arkansas income tax liability;
(6) Title 26 U.S.C. § 264, as in effect on January 1, 1999, regarding premium and interest deductions on life insurance of officers and employees, is adopted for the purpose of computing Arkansas income tax liability; and
(7) Title 26 U.S.C. § 470, as in effect on January 1, 2009, regarding leasing transactions between taxpayers, is adopted for the purpose of computing Arkansas income tax liability.

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