Today's Law As Amended

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SB-567 Taxation.(2017-2018)



SECTION 1.

 Section 17755 of the Revenue and Taxation Code is amended to read:

17755.
 (a)  For taxable years beginning on or after January 1, 2014, Section 664(c)(2) of the Internal Revenue Code, relating to excise tax, shall not apply and, in lieu thereof, the unrelated business taxable income, as defined in Section 23732, of every charitable remainder annuity trust or charitable remainder unitrust shall be subject to tax under Section 17651.
(b) For a charitable remainder annuity trust formed on or after January 1, 2018, Section 664(d)(1)(D) of the Internal Revenue Code is modified by substituting “40 percent” for “10 percent.”

SEC. 2.

 Section 18031 of the Revenue and Taxation Code is amended to read:

18031.
 (a)  Subchapter O of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to gain or loss on disposition of property, shall apply, except as otherwise provided.
(b) (1) The basis of property in the hands of a person who acquires that property from a decedent or to whom property passed from a decedent, unless such property is sold, exchanged or otherwise disposed of before the decedent’s death by that person, shall be determined under Section 1015 of the Internal Revenue Code, relating to basis of property acquired by gifts and transfers in trust, for those persons described in paragraphs (2) and (3), and Section 1014(a), relating to in general, and Section 1014(f) of the Internal Revenue Code, as added by Section 2004(a) of Public Law 114-41, relating to basis must be consistent with estate tax return, shall not apply to those persons.
(2) For individuals with the following adjusted gross income for the taxable year of the decedent’s death:
(A) Two million dollars ($2,000,000) or greater in the case of a joint return or surviving spouse, as defined in Section 17046.
(B) One million five hundred thousand dollars ($1,500,000) or greater in the case of a head of household, as defined in Section 17042.
(C) One million dollars ($1,000,000) or greater for all other filers.
(3) For persons other than individuals with total income for the taxable year of the decedent’s death of one million dollars ($1,000,000) or greater.
(4) An adjustment shall not be allowed to increase the basis of inherited property to which the rules of this subdivision apply with respect to any federal estate tax paid on the acquisition of such property.
(5) This subdivision shall apply to property acquired or inherited from decedents who died on or after January 1, 2018.

SEC. 3.

 Section 24343 of the Revenue and Taxation Code is amended to read:

24343.
 (a) Section 162 of the Internal Revenue Code, relating to trade or business expenses, shall apply, except as otherwise provided.
(b) For purposes of applying Section 162 of the Internal Revenue Code, any references to Section 170 of the Internal Revenue Code  Code, relating to charitable, etc, contributions and gifts,  shall be modified to refer to Sections 24357 to 24359.1, inclusive, of this part.
(c) For taxable years beginning on or after January 1, 2018, Section 162(m)(4)(B) of the Internal Revenue Code, relating to exception for remuneration payable on commission basis, and Section 162(m)(4)(C) of the Internal Revenue Code, relating to other performance-based compensation, shall not apply.

SEC. 4.

 Section 24911 of the Revenue and Taxation Code is amended to read:

24911.
 (a) The adjusted basis for determining the gain or loss from the sale or other disposition of property, whenever acquired, shall be the basis (determined basis, determined  under Section 24912) 24912,  or other applicable sections of Chapter 15 (relating 15, relating  to gain or loss on disposition of property) property,  and Chapter 8 (relating 8, relating  to corporate distributions and adjustments), adjustments,  adjusted as provided in Sections 24916 and 24917.
(b) If a deduction is allowable under Section 24357 (relating 24357, relating  to charitable contributions) contributions,  by reason of a sale, then the adjusted basis for determining the gain from such sale shall be that portion of the adjusted basis which bears the same ratio to the adjusted basis as the amount realized bears to the fair market value of the property.
(c) (1) The basis of property in the hands of a person who acquires that property from a decedent or to whom property passed from a decedent, unless such property is sold, exchanged or otherwise disposed of before the decedent’s death by that person, shall be determined under Section 1015 of the Internal Revenue Code for persons subject to tax under this part with net income for the taxable year of the decedent’s death of one million dollars ($1,000,000) or greater and Section 1014(a), relating to in general, and Section 1014(f) of the Internal Revenue Code, as added by Section 2004(a) of Public Law 114-41, relating to basis must be consistent with estate tax return, shall not apply to those persons.
(2) An adjustment shall not be allowed to increase the basis of inherited property to which the rules of this subdivision apply with respect to any federal estate tax paid on the acquisition of that property.
(3) This subdivision shall apply to property acquired or inherited from decedents who died on or after January 1, 2018.
SEC. 5.
 It is the intent of the Legislature to enact legislation for taxable years beginning on or after January 1, 2017, to modify the way payments are taxed to related parties, as defined in Section 267, 318, or 707 of the Internal Revenue Code.
SEC. 6.
 This act provides for a tax levy within the meaning of Article IV of the California Constitution and shall go into immediate effect.