reglab/statecodes huggingface dataset:
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 2 - Special Deductions › Section 24405.

24405. (a) In the case of other associations organized and operated in whole or in part on a cooperative or a mutual basis, all income resulting from or arising out of business activities for or with their members carried on by them or their agents, or when done on a nonprofit basis for or with nonmembers, shall be an allowable deduction. However, the deduction allowable under this section shall not apply to those cooperative or mutual associations whose income is principally derived from the sale in the regular course of business of tangible personal property other than water, agricultural products, or food sold at wholesale.
(b) For the purposes of subdivision (a), “food sold at wholesale” means a sale of food to anyone engaged in the business of selling food who holds a seller’s permit issued pursuant to Section 6066, and who at the time of purchasing the food either:
(1) Intends to sell it in the regular course of business.
(2) Is unable to ascertain at the time of purchase whether the food will be sold or used for some other purpose.
(c) For the purposes of subdivision (a), a credit union’s activities are “for or with” the members of the credit union if the activities involve the investment of surplus member savings capital in investments permitted for credit unions pursuant to Sections 14406, 14652, 14653, 14653.5, 14654, 14655, and 14656 of the Financial Code. “Surplus member savings capital” means the savings capital of credit union members which is in excess of the amount of savings capital which is loaned to members of the credit union. The term “savings capital” shall have the meaning set forth in subdivision (a) of Section 14400 of the Financial Code.
(d) For purposes of subdivision (a), “income resulting from or arising out of business activities for or with their members” includes, but is not limited to, all income resulting from reciprocal transactions with member credit unions.
(Amended by Stats. 1993, Ch. 1121, Sec. 2. Effective October 11, 1993.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 2 - Special Deductions › Section 24406.

24406. In the case of other associations organized and operated as co-operative corporations pursuant to Part 2 (commencing with Section 12200), Division 3, Title 1 of the Corporations Code, whose income is principally derived from the sale in the regular course of business of tangible personal property other than water, agricultural products or food sold at wholesale, all patronage refunds paid or accrued to patrons if the patronage refunds are made and allocated as follows:
(a) Made pursuant to a pre-existing obligation which is created by the association’s bylaws or other written instrument.
(b) Made from earnings which are attributable to business done by the association with the patrons to whom the patronage refunds are made, and allocated ratably according to patronage.
(c) Allocated, and the patrons to whom the patronage refunds are to be made are notified of the allocation, on or before the due date for the filing of the association’s franchise tax return, including any extension of time, pursuant to this part, for the year in which the patronage occurred.
(Added by Stats. 1961, Ch. 1934.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 2 - Special Deductions › Section 24406.5.

24406.5. (a) In the case of gas producers’ cooperative associations organized and operated as cooperative corporations pursuant to Chapter 1 (commencing with Section 3001) of Part 4 of Division 1 of the Public Utilities Code, whose income is principally derived from the sale in the regular course of business of tangible personal property other than water, agricultural products or food sold at wholesale, all patronage refunds paid or accrued to patrons if the patronage refunds are made and allocated as follows:
(1) Made pursuant to a preexisting obligation which is created by the association’s bylaws or other written instrument.
(2) Made from earnings which are attributable to business done by the association with the patrons to whom the patronage refunds are made, and allocated ratably according to patronage.
(3) Allocated, and the patrons to whom the patronage refunds are to be made are notified of the allocation, on or before the due date for the filing of the association’s franchise tax return, including any extension of time, pursuant to this part, for the year in which the patronage occurred.
(b) Each cooperative corporation shall certify to the Franchise Tax Board its eligibility for the deduction provided by this section. Certification shall be made at the time and in the manner prescribed by the Franchise Tax Board in forms or instructions.
(Added by Stats. 1989, Ch. 349, Sec. 3.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 2 - Special Deductions › Section 24406.6.

24406.6. For purposes of Section 24373.5, and Sections 24404 to 24406.5, inclusive, net earnings shall not be reduced by amounts paid during the year as dividends on capital stock or other proprietary capital interests of the organization to the extent that the articles of incorporation, bylaws of the organization, or other contract with patrons provide that those dividends are in addition to amounts otherwise payable to patrons that are derived from business done for or with patrons during the taxable year.
(Added by Stats. 2005, Ch. 691, Sec. 65. Effective October 7, 2005.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 2 - Special Deductions › Section 24407.

24407. (a) The organizational expenditures of a corporation may, at the election of the corporation (made in accordance with regulations prescribed by the Franchise Tax Board), be treated as deferred expenses. In computing net income, the deferred expenses remaining, if any, after the application of subdivision (b) shall be allowed as a deduction ratably over that period of not less than 180 months as may be selected by the corporation (beginning with the month in which the corporation begins business).
(b) (1) The corporation shall be allowed a deduction for the deferred expenses under subdivision (a) in an amount equal to the lesser of either of the following:
(A) The amount of organizational expenditures of the taxpayer that are treated as deferred expenses under subdivision (a).
(B) Five thousand dollars ($5,000), reduced, but not below zero, by an amount equal to the excess of the amount of the taxpayer’s organizational expenditures treated as deferred expenses under subdivision (a) over fifty thousand dollars ($50,000).
(2) The deduction under paragraph (1) shall be allowed in the taxable year in which the first month of the period specified in subdivision (a) occurs.
(c) The amendments made to this section by the act adding this subdivision shall apply to amounts paid or incurred on or after January 1, 2005.
(Amended by Stats. 2005, Ch. 691, Sec. 66. Effective October 7, 2005.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 2 - Special Deductions › Section 24408.

24408. The term “organizational expenditures” means any expenditure that meets all of the following requirements:
(a) Is incident to the creation of the corporation.
(b) Is chargeable to capital account.
(c) Is of a character which, if expended incident to the creation of a corporation having a limited life, would be amortizable over that life.
(Amended by Stats. 1997, Ch. 605, Sec. 92. Effective January 1, 1998.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 2 - Special Deductions › Section 24409.

24409. The election provided by Section 24407 may be made for any taxable year beginning after December 31, 1960, but only if made not later than the time prescribed by law for filing the return for that taxable year (including extensions thereof). The period so elected shall be adhered to in computing the income of the corporation for the taxable year for which the election is made and all subsequent taxable years. The election shall apply only with respect to the expenditures paid or incurred on or after June 23, 1961.
(Amended by Stats. 2000, Ch. 862, Sec. 156. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 2 - Special Deductions › Section 24411.

24411. (a) For purposes of those taxpayers electing to compute income under Section 25110, 100 percent of the qualifying dividends described in subdivision (c) and 75 percent of other qualifying dividends to the extent not otherwise allowed as a deduction or eliminated from income. “Qualifying dividends” means those received by the water’s-edge group from corporations if both of the following conditions are satisfied:
(1) The average of the property, payroll, and sales factors within the United States for the corporation is less than 20 percent.
(2) More than 50 percent of the total combined voting power of all classes of stock entitled to vote is owned directly or indirectly by the water’s-edge group.
(b) The water’s-edge group consists of corporations whose income and apportionment factors are taken into account pursuant to Section 25110.
(c) Dividends derived from a construction project, the location of which is not subject to the taxpayer’s control.
For purposes of this subdivision:
(1) “Construction project” means any activity which meets the following requirements:
(A) Is undertaken for any entity, including a governmental entity, which is not affiliated with the taxpayer.
(B) The majority of its cost of performance is attributable to an addition to real property or an alteration of land or any improvement thereto as those terms are utilized for purposes of this code.
“Construction project” does not include the operation, rental, leasing, or depletion of real property, land, or any improvement thereto.
(2) “Location of which is not subject to the taxpayer’s control” means that the place at which the majority of the construction takes place results from the nature or character of the construction project and not as a result of the terms of the contract or agreement governing the construction project.
(Amended by Stats. 1997, Ch. 605, Sec. 94. Effective January 1, 1998.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 2 - Special Deductions › Section 24414.

24414. (a) Section 195 of the Internal Revenue Code, relating to startup expenditures, shall apply, except as otherwise provided.
(b) References to Sections 163(a), 164, 165, and 174 of the Internal Revenue Code, relating to interest, taxes, losses, and research and experimental expenditures, are modified to refer to Sections 24344, 24345, 24347, and 24365, respectively.
(Amended by Stats. 1993, Ch. 878, Sec. 17. Effective January 1, 1994.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 2 - Special Deductions › Section 24416.05.

24416.05. (a) In addition to the modifications made by Section 24416, the deduction provided by Section 172 of the Internal Revenue Code, relating to net operating loss deduction, shall be modified as follows:
(1) Section 172(b)(1)(J) of the Internal Revenue Code, relating to certain losses attributable to federally declared disasters, shall not apply.
(2) Section 172(j) of the Internal Revenue Code, relating to rules relating to qualified disaster losses, shall not apply.
(b) This section shall be operative for taxable years beginning on or after January 1, 2011.
(Added by Stats. 2010, Ch. 721, Sec. 21. (SB 858) Effective October 19, 2010.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 2 - Special Deductions › Section 24416.1.

24416.1. (a) A qualified taxpayer, as defined in Section 24416.2, 24416.4, 24416.5, 24416.6, or 24416.7, may elect to take the deduction provided by Section 172 of the Internal Revenue Code, relating to the net operating loss deduction, as modified by Section 24416, in computing net income under Section 24341, with the following exceptions to Section 24416:
(1) Subdivision (a) of Section 24416, relating to years in which allowable losses are sustained, shall not be applicable.
(2) Subdivision (b) of Section 24416, relating to the 50-percent reduction of losses, shall not be applicable.
(3) The provisions of subparagraphs (B) and (C) of Section 172 (b) (1) of the Internal Revenue Code shall not apply. To the extent applicable to California law, net operating losses attributable to entities with losses described by Section 172(b)(1)(J) shall be applied in accordance with Section 172(b)(1)(A) and (B) of the Internal Revenue Code.
(b) Corporations whose income is subject to the provisions of Section 25101 or 25101.15 shall make the computations required by Section 25108.
(c) The election to compute the net operating loss under this section shall be made in a statement attached to the original return, timely filed for the year in which the net operating loss is incurred and shall be irrevocable. In addition to the exceptions specified in subdivision (a), Section 24416.2, 24416.4, 24416.5, 24416.6, or 24416.7, as appropriate, shall be applicable.
(d) Any carryover of a net operating loss sustained by a qualified taxpayer, as defined in subdivision (a) or (b) of Section 24416.2 as that section read immediately prior to January 1, 1997, shall, if previously elected, continue to be a deduction, as provided in subdivision (a), applied as if the provisions of subdivision (a) or (b) of Section 24416.2, as that section read prior to January 1, 1997, still applied.
(Amended by Stats. 2001, Ch. 623, Sec. 5. Effective October 9, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 2 - Special Deductions › Section 24416.3.

24416.3. (a) Notwithstanding Sections 24416, 24416.1, 24416.2, 24416.4, 24416.5, 24416.6, and 24416.7 of this code and Section 172 of the Internal Revenue Code, no net operating loss deduction shall be allowed for any taxable year beginning on or after January 1, 2002, and before January 1, 2004.
(b) For any carryover of a net operating loss for which a deduction is denied by subdivision (a), the carryover period under Section 172 of the Internal Revenue Code shall be extended as follows:
(1) By one year, for losses incurred in taxable years beginning on or after January 1, 2002, and before January 1, 2003.
(2) By two years, for losses incurred in taxable years beginning before January 1, 2002.
(Amended by Stats. 2002, Ch. 488, Sec. 11. Effective September 12, 2002.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 2 - Special Deductions › Section 24416.22.

24416.22. Notwithstanding Section 24416.1, 24416.2, 24416.4, 24416.5, 24416.6, or 24416.7 to the contrary, a net operating loss attributable to a taxable year beginning on or after January 1, 2008, shall be a net operating carryover to each of the 20 taxable years following the year of the loss, and a net operating loss attributable to a taxable year beginning on or after January 1, 2013, and before January 1, 2019, shall also be a net operating loss carryback to each of the two taxable years preceding the taxable year of loss.
(Amended by Stats. 2019, Ch. 39, Sec. 26. (AB 91) Effective July 1, 2019.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 2 - Special Deductions › Section 24416.23.

24416.23. (a) Notwithstanding Sections 24416, 24416.1, 24416.4, 24416.7, and 24416.22, former Sections 24416.2, 24416.5, 24416.6, and 24416.20, and Section 172 of the Internal Revenue Code, a net operating loss deduction shall not be allowed for any taxable year beginning on or after January 1, 2020, and before January 1, 2022.
(b) For any net operating loss or carryover of a net operating loss for which a deduction is denied by subdivision (a), the carryover period under Section 172 of the Internal Revenue Code shall be extended as follows:
(1) By one year, for losses incurred in taxable years beginning on or after January 1, 2021, and before January 1, 2022.
(2) By two years, for losses incurred in taxable years beginning on or after January 1, 2020, and before January 1, 2021.
(3) By three years, for losses incurred in taxable years beginning before January 1, 2020.
(c) The disallowance of any net operating loss deduction for any taxable year beginning on or after January 1, 2020, and before January 1, 2022, pursuant to subdivision (a) shall not apply to a taxpayer with income subject to tax under this part of less than one million dollars ($1,000,000) for the taxable year.
(d) The amendments made to this section by the act adding this subdivision shall be operative for taxable years beginning on or after January 1, 2022.
(Amended by Stats. 2022, Ch. 3, Sec. 21. (SB 113) Effective February 9, 2022.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 3 - Items Not Deductible › Section 24421.

24421. In computing “net income” of taxpayers under this part, no deduction shall be allowed for the items specified in this article.
(Added by Stats. 1955, Ch. 938.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 3 - Items Not Deductible › Section 24422.

24422. No deduction shall be allowed for both of the following:
(a) Any amount paid out for new buildings or for permanent improvements or betterments made to increase the value of any property or estate. This subdivision shall not apply to:
(1) Expenditures for the development of mines or deposits deductible under Section 616 of the Internal Revenue Code.
(2) Soil and water conservation expenditures deductible under Section 24369.
(3) Expenditures for farmers for fertilizer, etc., deductible under Section 24377.
(4) Research and experimental expenditures deductible under Section 24365.
(5) Expenditures for which a deduction is allowed under Section 24356.7.
(6) Expenditures for removal of architectural and transportation barriers to the handicapped and elderly that the taxpayer elects to deduct under Section 24383.
(b) Any amount expended in restoring property or in making good the exhaustion thereof for which an allowance is or has been made.
(Amended by Stats. 2011, Ch. 296, Sec. 285. (AB 1023) Effective January 1, 2012.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 3 - Items Not Deductible › Section 24422.3.

24422.3. (a) Section 263A of the Internal Revenue Code, relating to capitalization and inclusion in inventory costs of certain expenses, shall apply, except as otherwise provided.
(b) (1) For taxable years beginning on or after January 1, 2019, the amendments made by Section 13102(b) of the Tax Cuts and Jobs Act (Public Law 115-97) to Section 263A of the Internal Revenue Code, relating to capitalization and inclusion in inventory cost of certain expenses, shall apply, except as otherwise provided.
(2) (A) Any change in method of accounting made pursuant to this subdivision shall be treated for purposes of applying Section 24721, as initiated by the taxpayer and made with the consent of the Franchise Tax Board.
(B) Section 13102(e)(1) of the Tax Cuts and Jobs Act (Public Law 115-97) does not apply to this subdivision.
(C) Notwithstanding subparagraph (B), a taxpayer may elect to apply the provisions of this subdivision to taxable years beginning on or after January 1, 2018, and before January 1, 2019.
(Amended by Stats. 2019, Ch. 39, Sec. 27. (AB 91) Effective July 1, 2019.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 3 - Items Not Deductible › Section 24423.

24423. (a) Notwithstanding Section 24422, regulations shall be prescribed by the Franchise Tax Board under this part corresponding to the regulations which granted the option to deduct as expenses intangible drilling and development costs in the case of oil and gas wells and which were recognized and approved by the Congress in House Concurrent Resolution 50, Seventy-ninth Congress.
(b) The provisions of Section 263(i) of the Internal Revenue Code, relating to special rules for intangible drilling and development costs incurred outside the United States, shall apply to costs paid or incurred after December 31, 1986.
(Amended by Stats. 1987, Ch. 1139, Sec. 91. Effective September 25, 1987. Applicable to income years beginning on or after January 1, 1987, by Sec. 241 of Ch. 1139.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 3 - Items Not Deductible › Section 24424.

24424. Section 264 of the Internal Revenue Code, relating to certain amounts paid in connection with insurance contracts, shall apply, except as otherwise provided.
(Repealed and added by Stats. 2002, Ch. 35, Sec. 52. Effective May 8, 2002.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 3 - Items Not Deductible › Section 24426.

24426. Amounts paid or accrued for such taxes and carrying charges as, under regulations prescribed by the Franchise Tax Board, are chargeable to capital account with respect to property, if the taxpayer elects, in accordance with such regulations, to treat such taxes or charges as so chargeable.
(Added by Stats. 1955, Ch. 938.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 3 - Items Not Deductible › Section 24427.

24427. Section 267 of the Internal Revenue Code, relating to losses, expenses, and interest with respect to transactions between related taxpayers, shall apply, except as otherwise provided.
(Amended by Stats. 2015, Ch. 359, Sec. 32. (AB 154) 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.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 3 - Items Not Deductible › Section 24429.

24429. Section 276 of the Internal Revenue Code, relating to certain indirect contributions to political parties, shall apply, except as otherwise provided.
(Added by Stats. 1997, Ch. 611, Sec. 89. Effective October 3, 1997.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 3 - Items Not Deductible › Section 24431.

24431. (a) If—
(1) Any person or persons acquire, or acquired on or after October 8, 1940, directly or indirectly, control of a corporation; or
(2) Any corporation acquires, or acquired on or after October 8, 1940, directly or indirectly, property of another corporation, not controlled, directly or indirectly, immediately before such acquisition, by such acquiring corporation or its stockholders, the basis of which property, in the hands of the acquiring corporation, is determined by reference to the basis in the hands of the transferor corporation;
and the principal purpose for which such acquisition was made is evasion or avoidance of tax under this part by securing the benefit of a deduction, credit, or other allowance which such person or corporation would not otherwise enjoy, then such deduction, credit, or other allowance shall not be allowed. For purposes of this subdivision, control means the ownership of stock possessing at least 50 percent of the total combined voting power of all classes of stock entitled to vote or at least 50 percent of the total value of shares of all classes of stock of the corporation.
(b) (1) If—
(A) There is a qualified stock purchase by a corporation of another corporation,
(B) An election is not made under Section 24519 with respect to that purchase,
(C) The acquired corporation is liquidated pursuant to a plan of liquidation adopted not more than two years after the acquisition date, and
(D) The principal purpose for that liquidation is the evasion or avoidance of tax under this part by securing the benefit of a deduction, credit, or other allowance which the acquiring corporation would not otherwise enjoy,
then the Franchise Tax Board may disallow that deduction, credit, or other allowance.
(2) For purposes of paragraph (1), the terms “qualified stock purchase” and “acquisition date” have the same respective meanings as when used in Section 24519.
(c) In any case to which subdivision (a) applies, the Franchise Tax Board may do any of the following:
(1) Allow as a deduction, credit, or allowance any part of any amount disallowed by that section, if it determines that such allowance will not result in the evasion or avoidance of tax under this part for which the acquisition was made.
(2) Distribute, apportion, or allocate gross income, and distribute, apportion, or allocate the deductions, credits, or allowances the benefit of which was sought to be secured, between or among the corporations, or properties, or parts thereof, involved, and to allow those deductions, credits, or allowances so distributed, apportioned, or allocated, but to give effect to that allowance only to the extent which it determines shall not result in the evasion or avoidance of tax under this part for which the acquisition was made.
(3) Exercise its powers, in part, under paragraph (1) and, in part, under paragraph (2).
(Amended by Stats. 1985, Ch. 1461, Sec. 111. Effective October 1, 1985.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 3 - Items Not Deductible › Section 24434.

24434. (a) In the case of a taxpayer (other than a bank as defined in Section 23039) no deduction shall be allowed under Section 24347 or 24348 by reason of the worthlessness of any debt owed by a political party.
(b) (1) For purposes of subdivision (a), the term “political party” means any of the following:
(A) A political party.
(B) A national, state, or local committee of a political party.
(C) A committee, association, or organization which accepts contributions or makes expenditures for the purpose of influencing or attempting to influence the election of presidential or vice presidential electors or of any individual whose name is presented for election to any federal, state, or local elective public office, whether or not such individual is elected.
(2) For purposes of paragraph (1)(C), the term “contributions” includes a gift, subscription, loan, advance, or deposit, of money, or anything of value, and includes a contract, promise, or agreement to make a contribution, whether or not legally enforceable.
(3) For purposes of paragraph (1)(C), the term “expenditures” includes a payment, distribution, loan, advance, deposit, or gift, of money, or anything of value, and includes a contract, promise, or agreement to make an expenditure, whether or not legally enforceable.
(c) In the case of a taxpayer who uses an accrual method of accounting, subdivision (a) shall not apply to a debt which accrued as a receivable on a bona fide sale of goods or services in the ordinary course of a taxpayer’s trade or business if both of the following apply:
(1) For the taxable year in which the receivable accrued, more than 30 percent of all receivables which accrued in the ordinary course of the trades or businesses of the taxpayer were due from political parties.
(2) The taxpayer made substantial continuing efforts to collect on the debt.
(Amended by Stats. 2000, Ch. 862, Sec. 166. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 3 - Items Not Deductible › Section 24436.1.

24436.1. (a) In computing net income, deductions, including deductions for cost of goods sold, shall not be allowed to any taxpayer from any of its gross income directly derived from any act or omission of criminal profiteering activity, as defined in Section 186.2 of the Penal Code, or as defined in Chapter 6 (commencing with Section 11350) of Division 10 of the Health and Safety Code, or Article 5 (commencing with Section 750) of Chapter 1 of Part 2 of Division 1 of the Insurance Code; and deductions shall not be allowed to any taxpayer on any of its gross income derived from any other activities which directly tend to promote or to further, or are directly connected or associated with, those acts or omissions.
(b) A prior, final determination by a court of competent jurisdiction of this state in any criminal proceedings or any proceeding in which the state, county, city and county, city, or other political subdivision was a party thereto on the merits of the legality of the activities of a taxpayer, or predecessor in interest of a taxpayer, shall be required in order for subdivision (a) to apply and shall be binding upon the Franchise Tax Board and the State Board of Equalization.
(c) (1) Except as provided in paragraphs (2) and (3), this section shall be applied with respect to taxable years that have not been closed by a statute of limitations, res judicata, or otherwise as of September 14, 1982.
(2) The amendments made to this section by Chapter 962 of the Statutes of 1984 shall be applied with respect to taxable years that have not been closed by a statute of limitations, res judicata, or otherwise as of January 1, 1985.
(3) The amendments made to this section by Chapter 454 of the Statutes of 2011 shall be applied with respect to taxable years that have not been closed by a statute of limitations, res judicata, or otherwise as of the effective date of that act.
(Amended by Stats. 2012, Ch. 162, Sec. 173. (SB 1171) Effective January 1, 2013.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 3 - Items Not Deductible › Section 24437.

24437. Section 277 of the Internal Revenue Code, relating to deductions incurred by certain membership organizations in transactions with members, shall apply, except as otherwise provided.
(Amended by Stats. 1993, Ch. 877, Sec. 58. Effective October 6, 1993.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 3 - Items Not Deductible › Section 24439.

24439. (a) No deduction shall be allowed to the issuing corporation for any premium paid or incurred upon the repurchase of a bond, debenture, note, or certificate or other evidence of indebtedness which is convertible into the stock of the issuing corporation, or a corporation in the same parent-subsidiary controlled group, within the meaning of Section 1563(a)(1) of the Internal Revenue Code, relating to parent-subsidiary controlled group, as the issuing corporation, to the extent the repurchase price exceeds an amount equal to the adjusted issue price plus a normal call premium on bonds or other evidences of indebtedness which are not convertible. The preceding sentence shall not apply to the extent that the corporation can demonstrate to the satisfaction of the Franchise Tax Board that such excess is attributable to the cost of borrowing and is not attributable to the conversion feature.
(b) For purposes of subdivision (a), the adjusted issue price is the issue price, as defined in Sections 1273(b) and 1274 of the Internal Revenue Code, increased by any amount of discount deducted before repurchase, or, in the case of bonds or other evidences of indebtedness issued after February 28, 1913, decreased by any amount of premium included in gross income before repurchase by the issuing corporation.
(c) The provisions of this section shall not apply to a convertible bond or other convertible evidence of indebtedness repurchased pursuant to a binding obligation incurred on or before April 22, 1969, to repurchase such bond or other evidence of indebtedness at a specified call premium, but no inference shall be drawn from the fact that this section does not apply to the repurchase of such convertible bond or other convertible evidence of indebtedness.
(d) The amendments made to this section by the act adding this subdivision shall apply to repurchases on or after January 1, 2015.
(Amended by Stats. 2015, Ch. 359, Sec. 33. (AB 154) 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.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 3 - Items Not Deductible › Section 24440.

24440. (a) Section 280C(b) of the Internal Revenue Code, relating to credit for qualified clinical testing expenses for certain drugs, shall apply, except as otherwise provided.
(b) (1) Section 280C(c) of the Internal Revenue Code, relating to credit for increasing research activities, shall apply, except as otherwise provided.
(2) Section 280C(c)(3)(B) of the Internal Revenue Code is modified to refer to Section 23151, 23186, or 23802 in lieu of Section 11(b)(1) of the Internal Revenue Code.
(Amended by Stats. 1993, Ch. 878, Sec. 18. Effective January 1, 1994.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 3 - Items Not Deductible › Section 24441.

24441. In computing net income no deduction shall be allowed for (a) abandonment fees paid in respect of property on which the open-space easement is terminated under Section 51061 or 51093 of the Government Code or (b) tax recoupment fees paid under Section 51142 of the Government Code.
(Amended by Stats. 1977, Ch. 853.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 3 - Items Not Deductible › Section 24442.

24442. In the case of the demolition of any structure—
(1) No deduction otherwise allowable under this part shall be allowed to the owner or lessee of such structure for—
(A) Any amount expended for such demolition, or
(B) Any loss sustained on account of such demolition; and
(2) Amounts described in paragraph (1) shall be treated as property chargeable to capital account with respect to the land on which the demolished structure was located.
(Amended by Stats. 1985, Ch. 1461, Sec. 114. Effective October 1, 1985.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 3 - Items Not Deductible › Section 24442.5.

24442.5. Section 280H of the Internal Revenue Code, relating to limitation on certain amounts paid to employee-owners by personal service corporations electing alternative taxable years, shall apply to taxable years beginning on or after January 1, 1989, except as otherwise provided.
(Amended by Stats. 2000, Ch. 862, Sec. 170. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 3 - Items Not Deductible › Section 24443.

24443. Section 274 of the Internal Revenue Code, relating to the disallowance of certain entertainment, gift, travel, etc., expenses, shall apply, except as otherwise provided.
(Amended by Stats. 2002, Ch. 35, Sec. 53. Effective May 8, 2002.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 3 - Items Not Deductible › Section 24447.

24447. The Franchise Tax Board may disallow a deduction under this part to an individual or entity for amounts paid as remuneration for personal services if that individual or entity fails to report the payments required under Section 13050 of the Unemployment Insurance Code or Section 18631 on the date prescribed therefor (determined with regard to any extension of time for filing).
(Amended by Stats. 2007, Ch. 156, Sec. 3. Effective January 1, 2008.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 3 - Items Not Deductible › Section 24448.

24448. (a) Notwithstanding any other provisions in this part, in the case of a taxpayer who owns real property and has either failed to provide the information required pursuant to Section 18642 or has provided information which is either false, misleading, or incomplete in the information return required pursuant to Section 18642, no deduction for interest, taxes, depreciation, or amortization under Section 24343, 24344, 24345, 24349, or 24354.2 shall be allowed which relate to that real property, as provided in subdivision (b).
(b) No deduction shall be allowed for the items provided in subdivision (a) from 60 days after the due date for filing the information return required pursuant to Section 18642 until the date the Franchise Tax Board determines that all provisions of Section 18642 have been complied with.
(c) In the event the period of noncompliance does not cover an entire taxable year, the deductions shall be denied at the rate of one-twelfth for each full month during the period of noncompliance.
(Amended by Stats. 2000, Ch. 862, Sec. 171. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 7 - Net Income › ARTICLE 3 - Items Not Deductible › Section 24449.

24449. (a) Section 291 of the Internal Revenue Code, relating to special rules relating to corporate preference items, shall apply, except as otherwise provided.
(b) The reference in Section 291(b)(1) of the Internal Revenue Code to “Section 263(c)” shall be modified to mean the deduction under Section 24423 of this part.
(Amended by Stats. 2002, Ch. 488, Sec. 12. Effective September 12, 2002.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 8 - Corporate Distributions and Adjustments › Section 24451.

24451. Subchapter C of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to corporate distributions and adjustments, shall apply, except as otherwise provided.
(Amended by Stats. 1993, Ch. 873, Sec. 40. Effective October 6, 1993.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 8 - Corporate Distributions and Adjustments › Section 24451.1.

24451.1. (a) Notwithstanding paragraph (3) of subdivision (e) of Section 23051.5, if an election has been made by a taxpayer under Section 338 of the Internal Revenue Code, relating to certain stock purchases treated as asset acquisitions, or where a taxpayer is deemed to have made an election under Section 338(e) of the Internal Revenue Code, relating to deemed election where purchasing corporation acquires asset of target corporation, for federal income tax purposes, a separate election shall not be allowed under this part and the federal election shall be binding for purposes of this part, Part 10 (commencing with Section 17001), and Part 10.2 (commencing with Section 18401).
(b) Notwithstanding paragraph (3) of subdivision (e) of Section 23051.5, if an election has not been made by a taxpayer under Section 338 of the Internal Revenue Code, relating to certain stock purchases treated as asset acquisitions, or where a taxpayer has not been deemed to have made an election under Section 338(e) of the Internal Revenue Code, relating to deemed election where purchasing corporation acquires asset of target corporation, for federal income tax purposes, the taxpayer shall not make a separate state election with respect to Section 338 of the Internal Revenue Code, relating to certain stock purchases treated as asset acquisitions, under this part.
(c) This section shall apply to acquisitions made on or after the effective date of this section, except as provided in subdivision (d).
(d) This section shall not apply in the case of an acquisition that is subject to a binding contract entered into before the effective date of this section and which remains binding at all times after that date.
(Added by Stats. 2019, Ch. 39, Sec. 28. (AB 91) Effective July 1, 2019.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 8 - Corporate Distributions and Adjustments › Section 24452.

24452. Section 301(e)(2) of the Internal Revenue Code, relating to 20 percent corporate shareholders, is modified to refer to Section 24402 in lieu of Sections 243, 244, and 245 of the Internal Revenue Code.
(Added by Stats. 1991, Ch. 117, Sec. 82. Effective July 16, 1991.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 8 - Corporate Distributions and Adjustments › Section 24453.

24453. Section 302(c)(2) of the Internal Revenue Code, relating to determining termination of interest, is modified to refer to the periods of limitation provided in “Chapter 4 (commencing with Section 19001) and Chapter 5 (commencing with Section 19201) of Part 10.2,” in lieu of “Sections 6501 and 6502” of the Internal Revenue Code and to refer to “taxes imposed under the Personal Income Tax Law” and the “Corporation Tax Law,” in lieu of “Federal income tax.”
(Amended by Stats. 2001, Ch. 543, Sec. 38. Effective January 1, 2002.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 8 - Corporate Distributions and Adjustments › Section 24454.

24454. Section 304(b)(5)(B) of the Internal Revenue Code, relating to special rule in case of foreign acquiring corporation, shall apply to acquisitions on or after January 1, 2015.
(Added by Stats. 2015, Ch. 359, Sec. 35. (AB 154) 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.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 8 - Corporate Distributions and Adjustments › Section 24456.

24456. Section 306(f) of the Internal Revenue Code, relating to source of gain, shall not apply.
(Added by Stats. 1991, Ch. 117, Sec. 82. Effective July 16, 1991.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 8 - Corporate Distributions and Adjustments › Section 24458.

24458. Internal Revenue Service Notice 2008-83, 2008-42 I.R.B. 905, issued on October 20, 2008, relating to the treatment of deductions under Section 382(h) of the Internal Revenue Code following an ownership change, shall not be applicable for purposes of taxes imposed under Part 11 (commencing with Section 23001) of Division 2, of this code with respect to any ownership change occurring at any time.
(Added by Stats. 2009, Ch. 401, Sec. 1. (AB 11) Effective October 11, 2009.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 8 - Corporate Distributions and Adjustments › Section 24459.

24459. Section 382(n) of the Internal Revenue Code, relating to special rule for certain ownership changes, shall not apply.
(Added by Stats. 2015, Ch. 359, Sec. 36. (AB 154) 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.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 8 - Corporate Distributions and Adjustments › Section 24461.

24461. (a) For purposes of this part, the provisions of Section 633 of Public Law 99-514, relating to effective dates for recognition of gain and loss on distributions of property in liquidation, shall apply except as otherwise provided.
(b) The provisions of Section 633(e) of Public Law 99-514, relating to other transition rules, shall not apply.
(c) The amendments to Section 633 of Public Law 99-514 made by Section 1006(g)(1) to 1006(g)(8), inclusive, of Public Law 100-647, relating to effective dates for recognition of gain and loss on distributions of property in liquidation, are declaratory of existing law and shall be applied in the same manner and for the same periods as specified in Public Law 100-647.
(Added by Stats. 1991, Ch. 117, Sec. 82. Effective July 16, 1991.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 8 - Corporate Distributions and Adjustments › Section 24462.

24462. (a) Section 355 of the Internal Revenue Code, as in effect for federal income tax purposes as of January 1, 2010, shall apply to distributions made on or after January 1, 2010, without regard to taxable year, except as otherwise provided.
(b) Section 355(g) of the Internal Revenue Code, relating to section not to apply to distributions involving disqualified investment corporations, is modified by substituting the phrase “January 1, 2010,” for “the date of the enactment of this subsection” in Section 355(g)(2)(A)(i) of the Internal Revenue Code.
(c) The provisions of Section 4(d)(2) of the Tax Technical Corrections Act of 2007 (Public Law 110-172), relating to modification of active business definition under Section 355, shall apply and are modified by substituting “January 1, 2010,” for “May 17, 2006.”
(d) The provisions of Section 507(b) of the Tax Increase Prevention and Reconciliation Act of 2005 (Public Law 109-222), relating to effective dates, shall apply and are modified as follows:
(1) The phrase “January 1, 2010,” shall be substituted for “the date of the enactment of this Act” in Section 507(b)(1) of the Tax Increase Prevention and Reconciliation Act of 2005 (Public Law 109-222).
(2) The phrase “January 1, 2010,” shall be substituted for “such date of enactment” in Section 507(b)(2)(A) of the Tax Increase Prevention and Reconciliation Act of 2005 (Public Law 109-222).
(e) This section shall apply as of the dates specified in this section, without regard to taxable year.
(Added by Stats. 2010, Ch. 14, Sec. 75. (SB 401) Effective January 1, 2011.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 8 - Corporate Distributions and Adjustments › Section 24471.

24471. Section 381(c) of the Internal Revenue Code, relating to items of the distributor or transferor corporation, is modified to provide that, in lieu of paragraph (24), relating to credit under Section 38, and paragraph (25), relating to credit under Section 53, the acquiring corporation shall take into account (to the extent proper to carry out the purposes of Section 381 of the Internal Revenue Code) the items required to be taken into account for purposes of each credit allowable under this part with respect to the distributor or transferor corporation.
(Repealed and added by Stats. 1991, Ch. 117, Sec. 82. Effective July 16, 1991.)