Code Section Group

Revenue and Taxation Code - RTC

DIVISION 2. OTHER TAXES [6001 - 60709]

  ( Heading of Division 2 amended by Stats. 1968, Ch. 279. )

PART 10. PERSONAL INCOME TAX [17001 - 18181]

  ( Part 10 added by Stats. 1943, Ch. 659. )

CHAPTER 14. General Rules for Determining Capital Gains and Losses [18151 - 18181]
  ( Chapter 14 repealed and added by Stats. 1983, Ch. 488, Sec. 65. )

18151.
  

Subchapter P of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to capital gains and losses, shall apply, except as otherwise provided.

(Amended by Stats. 1993, Ch. 873, Sec. 29. Effective October 6, 1993.)

18151.5.
  

Section 301 of Title III of Division A of the Emergency Economic Stabilization Act of 2008 (Public Law 110-343), relating to gain or loss from sale of certain preferred stock, shall not apply.

(Added by Stats. 2010, Ch. 14, Sec. 38. Effective January 1, 2011.)

18152.
  

(a) Section 1202 of the Internal Revenue Code, relating to 50-percent exclusion for gain from certain small business stock, shall not apply.

(b) Any reference in the Internal Revenue Code to the “exclusion allowed under Section 1202” shall, for purposes of this part, be modified to refer to the exclusion allowed under Section 18152.5.

(Added by Stats. 1997, Ch. 611, Sec. 49. Effective October 3, 1997.)

18153.
  

(a) In the case of a taxpayer subject to tax under this part:

(1) A penalty shall not be imposed with respect to the additional tax of that taxpayer.

(2) Interest shall not accrue with respect to the additional tax of that taxpayer due for the taxable year.

(3) In the case of a liability for additional tax of a taxpayer under this part, notwithstanding any other eligibility requirements contained in Section 19008, the Franchise Tax Board shall enter into an agreement under Section 19008 to accept the full payment of the additional tax in installments over a period not to exceed five years.

(b) For purposes of subdivision (a), the term “additional tax” means:

(1) The increase in tax for a taxable year beginning on or after January 1, 2008, and before January 1, 2013, to the extent that the increase is attributable to the amendments made to Section 18152.5 by the act adding this section.

(2) If Section 18152.5, as amended by the act adding this section, is for any reason held invalid, ineffective, or unconstitutional by an appellate court of competent jurisdiction, the term “additional tax” means the increase in tax for a taxable year beginning on or after January 1, 2008, and before January 1, 2013, to the extent that the increase is attributable to the implementation of the appellate court holding invalidating Section 18152.5, as amended by the act adding this section, coupled with the implementation of the decision of the California Court of Appeal, Frank Cutler v. Franchise Tax Board, (2012) 208 Cal.App.4th 1247, as announced in Franchise Tax Board Notice 2012–03, dated December 21, 2012.

(c) This section shall remain in effect only until January 1, 2018, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2018, deletes or extends that date.

(Added by Stats. 2013, Ch. 543, Sec. 3. Effective January 1, 2014. Repealed as of January 1, 2018, by its own provisions. See identical section added by Stats. 2013, Ch. 546.)

18153.
  

(a) In the case of a taxpayer subject to tax under this part:

(1) A penalty shall not be imposed with respect to the additional tax of that taxpayer.

(2) Interest shall not accrue with respect to the additional tax of that taxpayer due for the taxable year.

(3) In the case of a liability for additional tax of a taxpayer under this part, notwithstanding any other eligibility requirements contained in Section 19008, the Franchise Tax Board shall enter into an agreement under Section 19008 to accept the full payment of the additional tax in installments over a period not to exceed five years.

(b) For purposes of subdivision (a), the term “additional tax” means:

(1) The increase in tax for a taxable year beginning on or after January 1, 2008, and before January 1, 2013, to the extent that the increase is attributable to the amendments made to Section 18152.5 by the act adding this section.

(2) If Section 18152.5, as amended by the act adding this section, is for any reason held invalid, ineffective, or unconstitutional by an appellate court of competent jurisdiction, the term “additional tax” means the increase in tax for a taxable year beginning on or after January 1, 2008, and before January 1, 2013, to the extent that the increase is attributable to the implementation of the appellate court holding invalidating Section 18152.5, as amended by the act adding this section, coupled with the implementation of the decision of the California Court of Appeal, Frank Cutler v. Franchise Tax Board, (2012) 208 Cal.App.4th 1247, as announced in Franchise Tax Board Notice 2012–03, dated December 21, 2012.

(c) This section shall remain in effect only until January 1, 2018, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2018, deletes or extends that date.

(Added by Stats. 2013, Ch. 546, Sec. 3. Effective January 1, 2014. Repealed as of January 1, 2018, by its own provisions.)

18154.
  

Notwithstanding any other law, for purposes of this part, the natural gas transmission line explosion on September 9, 2010, in San Bruno, California, shall be treated as a federally declared disaster within the meaning of Section 1033 of the Internal Revenue Code.

(Added by Stats. 2011, Ch. 18, Sec. 3. Effective April 7, 2011.)

18155.
  

A deduction shall not be allowed for capital loss carrybacks provided by Section 1212 of the Internal Revenue Code, relating to capital loss carrybacks and carryovers.

(Amended by Stats. 2015, Ch. 359, Sec. 18. Effective September 30, 2015. Applicable to taxable years beginning on or after January 1, 2015, as provided in Sec. 41 of Stats. 2015, Ch. 359.)

18155.5.
  

Section 1223 of the Internal Revenue Code, relating to holding period of property, is modified to additionally provide that in determining the period for which the taxpayer has held property the acquisition of which resulted under Section 18038.5 in the nonrecognition of any part of the gain realized on the sale of other property, there shall be included the period for which that other property has been held as of the date of the sale.

(Amended by Stats. 2003, Ch. 185, Sec. 24. Effective January 1, 2004.)

18155.6.
  

For taxable years beginning on or after January 1, 2010, specific reference to Sections 1223(4) to (16), inclusive, of the Internal Revenue Code in this part shall instead be treated as a reference to Sections 1223(3) to (15), inclusive, of the Internal Revenue Code, respectively.

(Added by Stats. 2010, Ch. 14, Sec. 39. Effective January 1, 2011.)

18165.
  

(a) Section 1245(a)(2)(C) of the Internal Revenue Code, relating to certain deductions treated as amortization, is modified to also refer to Sections 17252.5, 17265, and 17266.

(b) Section 1245(b)(8) of the Internal Revenue Code, relating to disposition of amortizable Section 197 intangibles, shall apply to dispositions of property on or after January 1, 2010.

(Amended by Stats. 2010, Ch. 14, Sec. 40. Effective January 1, 2011.)

18171.
  

Section 1250(b) of the Internal Revenue Code, relating to additional depreciation, is modified as follows:

(a) “Depreciation adjustments,” as defined in Section 1250(b)(3) of the Internal Revenue Code, do not include the following:

(1) For taxable years beginning on or after January 1, 1983, amortization under Section 17251 or under Section 188 of the Internal Revenue Code.

(2) For taxable years beginning prior to January 1, 1983, amortization under former Section 17226, relating to pollution control facilities, or former Section 17227, relating to trademarks.

(b) “Additional depreciation,” as defined in Section 1250(b)(4) of the Internal Revenue Code, includes the following:

(1) For taxable years beginning on or after January 1, 1983, amortization under Section 167(k) of the Internal Revenue Code.

(2) For taxable years beginning before January 1, 1983, amortization under former Section 17211.7, relating to low-income rental housing, or former Section 17228.5, relating to certified historic structures.

(Amended by Stats. 2003, Ch. 185, Sec. 25. Effective January 1, 2004.)

18171.5.
  

Section 1250(a) of the Internal Revenue Code is modified as follows:

(a) The date “December 31, 1970” is substituted for “July 24, 1969,” and “December 31, 1969.”

(b) The date “January 1, 1971” is substituted for “January 1, 1970.”

(c) The date “December 31, 1976” is substituted for “December 31, 1975.”

(d) The date “January 1, 1977” is substituted for “January 1, 1976.”

(Amended by Stats. 2003, Ch. 185, Sec. 26. Effective January 1, 2004.)

18177.
  

Section 1275(a)(3) of the Internal Revenue Code, relating to the definition of tax-exempt obligations, does not apply but instead the term “tax-exempt obligation” means an obligation the interest on which is exempt from tax under this part.

(Amended by Stats. 2003, Ch. 185, Sec. 27. Effective January 1, 2004.)

18178.
  

Section 1272 of the Internal Revenue Code shall be modified as follows:

(a) For taxable years beginning on or after January 1, 1987, and before the taxable year in which the debt obligation matures or is sold, exchanged, or otherwise disposed, the amount included in gross income under this part shall be the same as the amount included in gross income on the federal tax return.

(b) The difference between the amount included in gross income on the federal return and the amount included in gross income under this part, with respect to obligations issued after December 31, 1984, for taxable years beginning before January 1, 1987, shall be included in gross income in the taxable year in which the debt obligation matures or is sold, exchanged, or otherwise disposed.

(c) Section 1004(b) of the Taxpayer Relief Act of 1997 (P.L. 105-34), relating to the effective date for determination of original issue discount where pooled debt obligations are subject to acceleration, is modified to provide that the changes to Section 1272(a)(6) of the Internal Revenue Code made by the act adding this subdivision shall apply to taxable years beginning on or after January 1, 1998, and the amount taken into account under Section 481 of the Internal Revenue Code shall be taken into account ratably over the four-taxable-year period beginning with the first taxable year beginning on or after January 1, 1998.

(Amended by Stats. 1998, Ch. 322, Sec. 42. Effective August 20, 1998.)

18180.
  

(a) Section 7872 of the Internal Revenue Code, relating to treatment of loans with below market interest rates, shall apply, except as otherwise provided.

(b) Section 7872(h) of the Internal Revenue Code, relating to exception for loans to qualified continuing care facilities, shall apply to calendar years beginning on or after January 1, 2010, with respect to loans made before, on, or after that date.

(Amended by Stats. 2010, Ch. 14, Sec. 41. Effective January 1, 2011.)

18181.
  

Part VI of Subchapter P of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to treatment of certain passive foreign investment companies, shall not apply.

(Added by Stats. 2005, Ch. 691, Sec. 40.5. Effective October 7, 2005.)

RTCRevenue and Taxation Code - RTC