Code Section Group

Revenue and Taxation Code - RTC

DIVISION 2. OTHER TAXES [6001 - 61045]

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

PART 11. CORPORATION TAX LAW [23001 - 25141]

  ( Heading of Part 11 amended by Stats. 2001, Ch. 543, Sec. 21. )

CHAPTER 15. Gain or Loss on Disposition of Property [24901 - 24998]

  ( Chapter 15 added by Stats. 1955, Ch. 938. )

ARTICLE 1. Computation of Gain or Loss [24901 - 24905.5]
  ( Article 1 added by Stats. 1955, Ch. 938. )

24901.
  

(a) The gain from the sale or other disposition of property shall be the excess of the amount realized therefrom over the adjusted basis provided in Section 24911 for determining gain, and the loss shall be the excess of the adjusted basis provided in that section for determining loss over the amount realized.

(b) The amount realized from the sale or other disposition of property shall be the sum of any money received plus the fair market value of the property (other than money) received. In determining the amount realized—

(1) There shall not be taken into account any amount received as reimbursement for real property taxes which are treated under Section 24346 as imposed on the purchaser, and

(2) There shall be taken into account amounts representing real property taxes which are treated under Section 24346 as imposed on the corporation if those taxes are to be paid by the purchaser.

(c) In the case of a sale or exchange of property, the extent to which the gain or loss determined under this section shall be recognized for purposes of this part shall be determined under Section 24902.

(d) Nothing in this section shall be construed to prevent (in the case of property sold under contract providing for payment in installments) the taxation of that portion of any installment payment representing gain or profit in the year in which that payment is received.

(e) (1) In determining gain or loss from the sale or other disposition of a term interest in property, that portion of the adjusted basis of that interest which is determined pursuant to Sections 24914 and 24915 (to the extent that the adjusted basis is a portion of the entire adjusted basis of the property) shall be disregarded.

(2) For purposes of paragraph (1), the term “term interest in property” means—

(A) A life interest in property,

(B) An interest in property for a term of years, or

(C) An income interest in a trust.

(3) Paragraph (1) shall not apply to a sale or other disposition which is a part of a transaction in which the entire interest in property is transferred to any person or persons.

(Amended by Stats. 1997, Ch. 605, Sec. 99. Effective January 1, 1998.)

24902.
  

Except as otherwise provided in this part, on the sale or exchange of property the entire amount of the gain or loss, determined under Section 24901, shall be recognized.

(Added by Stats. 1955, Ch. 938.)

24905.
  

(a) Section 988 of the Internal Revenue Code, relating to treatment of certain foreign currency transactions, shall apply, except as otherwise provided.

(b) Section 988(a)(3) of the Internal Revenue Code, relating to source, shall not apply.

(Amended by Stats. 1993, Ch. 877, Sec. 79. Effective October 6, 1993.)

24905.5.
  

For each taxable year beginning on or after January 1, 1997, the amendments made to Section 988 of the Internal Revenue Code by Section 13223 of the Revenue Reconciliation Act of 1993 (P.L. 103-66), relating to mark to market accounting method for securities dealers, shall apply.

(Amended by Stats. 2000, Ch. 862, Sec. 199. Effective January 1, 2001.)

RTCRevenue and Taxation Code - RTC1