§ 155.22. Definitions.
The following words and terms, when used in § § 155.21—155.24, have the following meanings, unless the context clearly indicates otherwise:
Actual value—Cash value.
Book income—Income as reported in Line 1 of Schedule M-1 of the Federal 1120 Form.
Capital stock—Common stock, preferred and special stock.
Capital stock value—Defined in section 601 of the TRC (72 P. S. § 7601) as the actual value of the taxpayer in cash as it existed at the close of the year for which the report is made, taking into consideration:(i) The average selling price of stock.
(ii) Corporate earnings.
(iii) Dividends declared.
(iv) Stockholder equity.
Corporate earnings—The book income as reported to the shareholders which is adjusted for distortions in the current and prior years created by nonrecurring-type gains and losses or by use or correction of inconsistent or erroneous accounting practices. Reference should also be made to § 155.23(b) (relating to determination of valuation factors).
Daily weighted average—Computed by multiplying each listed price of the capital stock during the taxable year by the number of days the price was listed. The product is added and that sum is divided by the number of days the capital stock was listed.Example: $20 listed for 80 days = 1600 15 listed for 40 days = 600 21 listed for 80 days = 1680 18 listed for 60 days = 1080
260 days 4960The average selling price is $19.08 (4960 ÷ 260).
Disposition—A transfer, such as a sale or exchange.
Dividends declared—Normal distributions of corporate earnings which are not in the nature of liquidating or other nonrecurring or extraordinary distributions. Reference should also be made to § 155.23(c) (relating to determination of valuating factors).
Mean average—Computed by taking the average of the highest and lowest price the capital stock was listed during the taxable year.Example: The highest listed price of the taxpayer’s capital stock was $56; the lowest price was $38. The average selling price is $47 ($94 ÷ 2).
Net book value—The basis of real property and tangible and intangible personal property after adjustments (depreciation, amortization and other write-downs) as reflected on the corporate financial statements.
Selling price of the stock—The average which the capital stock sold for during the taxable year. Reference should also be made to § 155.23(a).
Stockholder equity—Defined in section 601 of the TRC (72 P. S. § 7601) as the actual value indicated or measured by consideration of the intrinsic value of a corporation’s tangible property and assets, and of the value of its goodwill and franchise and privileges, as indicated by the material results of their exercise, taking into consideration the amount of its indebtedness. Reference should also be made to § 155.23(d).
Source The provisions of this § 155.22 adopted September 1, 1978, effective September 2, 1978, 8 Pa.B. 2457.
Cross References This section cited in 61 Pa. Code § 155.21 (relating to general); 61 Pa. Code § 155.23 (relating to determination of valuation factors); 61 Pa. Code § 155.24 (relating to valuation methods); and 61 Pa. Code § 155.28 (relating to capital stock value methods—fixed formula).
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