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 4. Special Rules for Basis [24961 - 24966.2]
  ( Article 4 added by Stats. 1955, Ch. 938. )

24961.
  

In the case of the property acquired by a corporation, during a period of affiliation, from a corporation with which it was affiliated, the basis of such property, after such period of affiliation, shall be determined, in accordance with regulations prescribed by the Franchise Tax Board without regard to intercompany transactions in respect of which gain or loss was not recognized. The basis in case of property acquired by a corporation during any period, in the income year 1929 or any subsequent income year, in respect of which a consolidated return is made by such corporation under Article 9 of Chapter 2 or Section 141 of the Federal Revenue Act of 1928 or the Federal Revenue Act of 1932 or the Federal Revenue Act of 1934 or the Federal Revenue Act of 1936, or in the case of a corporation subject to the tax imposed by Chapter 3, the Federal Revenue Act of 1938, shall be determined in accordance with regulations prescribed under Article 9 of Chapter 2 or Section 141 of the Federal Revenue Act of 1928 or the Federal Revenue Act of 1932 or the Federal Revenue Act of 1936, or in the case of a corporation subject to the tax imposed by Chapter 3, the Federal Revenue Act of 1938. The basis in the case of property held by a corporation during any period, in the income year 1929 or any subsequent income year, in respect of which a consolidated return is made by such corporation under Article 9 of Chapter 2 or Section 141 of the Federal Revenue Act of 1928 or the Federal Revenue Act of 1932 or the Federal Revenue Act of 1934 or the Federal Revenue Act of 1936, or, in the case of a corporation subject to the tax imposed by Chapter 3, or the Federal Revenue Act of 1938, shall be adjusted in respect of any items relating to such period, in accordance with regulations prescribed under Article 9 of Chapter 2 or Section 141 of the Federal Revenue Act of 1928 or the Federal Revenue Act of 1932 or the Federal Revenue Act of 1934 or the Federal Revenue Act of 1936, or in the case of a corporation subject to the tax imposed by Chapter 3, or the Federal Revenue Act of 1938, applicable to such period.

(Amended by Stats. 1957, Ch. 544.)

24962.
  

(a) If the property was acquired, after February 28, 1913, in any income year beginning before January 1, 1934, and the basis thereof, for purposes of the Revenue Act of 1932 was prescribed by Section 113(a) (6), (7), or (9) of such act (47 Stat. 199), then for purposes of this part the basis shall be the same as the basis therein prescribed in the Revenue Act of 1932.

(b) If the property was acquired, after February 28, 1913, in any income year beginning before January 1, 1937, and the basis thereof, for purposes of the Revenue Act of 1934, was prescribed by Section 113(a) (6), (7), or (8) of such act (48 Stat. 706), then for purposes of this part the basis shall be the same as the basis therein prescribed in the Revenue Act of 1934.

(c) If the property was acquired after February 28, 1913, in a transaction to which the Bank and Corporation Tax Law of 1954 applied, and the basis thereof, for purposes of the Bank and Corporation Tax Law of 1954, was prescribed by Section 25071(d), 25071(e), or 25071(f) of such law, then for purposes of this part the basis shall be the same as the basis therein prescribed in the Bank and Corporation Tax Law of 1954.

(d) Stock rights acquired after February 28, 1913, and before January 1, 1955, shall have the basis assigned to such property under Section 25071m of the Bank and Corporation Tax Law of 1954.

(Amended by Stats. 1957, Ch. 544.)

24963.
  

In the case of property acquired before March 1, 1913, if the basis otherwise determined under this part, adjusted (for the period before March 1, 1913) as provided in Section 24916, is less than the fair market value of the property as of March 1, 1913, then the basis for determining gain shall be such fair market value. In determining the fair market value of stock in a corporation as of March 1, 1913, due regard shall be given to the fair market value of the assets of the corporation as of that date.

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

24964.
  

Whenever a taxpayer has realized gain or loss upon the receipt after January 1, 1928, at a time when it was subject to a tax under this part, of all or substantially all of the business or property of a taxpayer over which it exercised control within the meaning of Section 24564, and such gain or loss actually was not taken into account in the computation of taxes imposed by this part, the basis of the property or business acquired shall be the same as it was in the hands of the transferor.

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

24965.
  

In the case of a share of stock issued pursuant to Section 303(c) of the Federal National Mortgage Association Charter Act (12 U.S.C., Sec. 1718), the basis of such share in the hands of the initial holder shall be an amount equal to the capital contributions evidenced by such share reduced by the amount (if any) required by Section 24343(d) to be treated (with respect to such share) as ordinary and necessary expenses paid or incurred in carrying on a trade or business.

(Added by Stats. 1961, Ch. 846.)

24966.
  

(a) The basis in stock purchased shall be reduced by the nontaxed portion of any extraordinary dividend received as provided in Section 1059 of the Internal Revenue Code, except as otherwise provided in this section.

(b) The reduction described in Section 1059(b)(2)(B) of the Internal Revenue Code shall be the amount determined under Section 24402.

(c) Reference to Section 301 of the Internal Revenue Code shall be reference to Sections 24451 to 24454, inclusive.

(d) Reference to Section 301(b)(2) of the Internal Revenue Code shall be reference to subdivision (b) of Section 24452.

(e) Reference to Section 301(c)(2) of the Internal Revenue Code shall be reference to subdivision (b) of Section 24453.

(Amended by Stats. 1990, Ch. 1349, Sec. 34.3. Effective September 26, 1990.)

24966.1.
  

Section 1059A of the Internal Revenue Code, relating to limitation on taxpayer’s basis or inventory cost in property imported from related persons, shall apply, except as otherwise provided.

(Amended by Stats. 1993, Ch. 877, Sec. 85. Effective October 6, 1993.)

24966.2.
  

Section 1060 of the Internal Revenue Code, relating to special allocation rules for certain asset acquisitions, shall apply, except as otherwise provided.

(Amended by Stats. 1993, Ch. 877, Sec. 86. Effective October 6, 1993.)

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