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DocuSign Envelope ID: D733A3F0-EC57-49D6-A4C4-7A15E4E44C25 <br />Section 3. That Section 128.2201(b)(10), Definitions, of the Lakewood Codified <br />Ordinances, currently reading as follows: <br />128.2201 DEFINITIONS. <br />(b)"ADJUSTED FEDERAL TAXABLE INCOME," for a person required to file as a C corporation, <br />or for a person that has elected to be taxed as a C corporation under division (v)(4) of this section, <br />means a C corporation's federal taxable income before net operating losses and special deductions <br />as determined under the Internal Revenue Code, adjusted as follows: <br />(10) Add any loss incurred by a pass -through entity owned directly or indirectly by the taxpayer <br />and included in the taxpayer's federal taxable income unless an affiliated group of corporations <br />includes that loss in the group's federal taxable income in accordance with division (e)(3)(B) of <br />Section 128.063 of this Chapter. <br />If the taxpayer is not a C corporation, is not a disregarded entity that has made the election <br />described in division (tt)(2) of this section, is not a publicly traded partnership that has made the <br />election described in division (v)(4) of this section, and is not an individual, the taxpayer shall <br />compute adjusted federal taxable income under this section as if the taxpayer were a C corporation, <br />except guaranteed payments and other similar amounts paid or accrued to a partner, former partner, <br />shareholder, former shareholder, member, or former member shall not be allowed as a deductible <br />expense unless such payments are in consideration for the use of capital and treated as payment of <br />interest under section 469 of the Internal Revenue Code or United States treasury regulations. <br />Amounts paid or accrued to a qualified self-employed retirement plan with respect to a partner, <br />former partner, shareholder, former shareholder, member, or former member of the taxpayer, <br />amounts paid or accrued to or for health insurance for a partner, former partner, shareholder, former <br />shareholder, member, or former member, and amounts paid or accrued to or for life insurance for a <br />partner; former partner, shareholder, former shareholder, member, or former member shall not be <br />allowed as a deduction. <br />Nothing in division (a) of this section shall be construed as allowing the taxpayer to add or deduct <br />any amount more than once or shall be construed as allowing any taxpayer to deduct any amount <br />paid to or accrued for purposes of federal self-employment tax. <br />is hereby repealed. <br />Section 3. That new Section 128.2201(b)(10), Definitions, of the Lakewood Codified <br />Ordinances, is hereby enacted to read as follows: <br />12 8.2201 DEFINITIONS. <br />(b)"ADJUSTED FEDERAL TAXABLE INCOME," for a person required to file as a C corporation, <br />or for a person that has elected to be taxed as a C corporation under division (v)(4) of this section, <br />means a C corporation's federal taxable income before net operating losses and special deductions <br />as determined under the Internal Revenue Code, adjusted as follows: <br />(10) Add any loss incurred by a pass -through entity owned directly or indirectly by the taxpayer <br />and included in the taxpayer's federal taxable income unless an affiliated group of corporations <br />includes that loss in the group's federal taxable income in accordance with division (e)(3)(B) of <br />Section 128.063 of this Chapter. <br />If the taxpayer is not a C corporation, is not a disregarded entity that has made the election <br />- - described in division (tt)(2) of this section, is not a publicly traded partnership that has made the <br />