reglab/statecodes huggingface dataset:
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 8 - Corporate Distributions and Adjustments › Section 24472.

24472. The amendments to Section 382 of the Internal Revenue Code made by Section 13226 of the Revenue Reconciliation Act of 1993 (P.L. 103-66), relating to modifications of discharge of indebtedness provisions, shall apply to discharges occurring on or after January 1, 1996, in taxable years beginning on or after January 1, 1996.
(Amended by Stats. 2001, Ch. 543, Sec. 39. 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 24473.

24473. Notwithstanding any other provision of law, the contribution or other transfer of the assets of a mutual water company established prior to September 26, 1977, that is tax exempt under Section 501(c)(12) of the Internal Revenue Code, but is a taxable entity under California Law, including its lands, easements, rights, and obligations to act as sole agent of the stockholders in exercising the riparian rights of the stockholders, and rights relating to the ownership, operation, and maintenance of a water system and facilities serving the customers of the company, to a community services district formed pursuant to Part 1 (commencing with Section 61100) of Division 3 of Title 6 of the Government Code, is not a transfer subject to taxes imposed by this part if all of the following requirements are met:
(a) The consideration for the transfer of all or substantially all of the assets is the assumption by the district of the company’s liability to provide service to the company’s stockholders.
(b) The legal or beneficial title to all or substantially all of the company’s assets is vested in the district on or before January 1, 2008.
(c) For the one-year period immediately prior to commencement of the transfer and continuing until the transfer is completed, 85 percent or more of the company’s income consists of amounts collected from stockholders for the sole purpose of meeting losses and expenses.
(Added by Stats. 2002, Ch. 1108, Sec. 1. Effective September 29, 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 24481.

24481. Section 383 of the Internal Revenue Code, relating to special limitations on certain excess credits, etc., is modified to apply to credits allowable under Chapter 3.5 (commencing with Section 23601), and the minimum tax credit allowable under Section 23453.
(Repealed and 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 12 - Deferred Compensation, Etc. › ARTICLE 1 - Adoption of Subchapter D of the Internal Revenue Code Relating to Deferred Compensation, etc. › Section 24601.

24601. (a) Subchapter D of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to deferred compensation, etc., shall apply, except as otherwise provided.
(b) Notwithstanding the date specified in paragraph (1) of subdivision (a) of Section 23051.5, Part I of Subchapter D of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to pension, profitsharing, stock bonus plans, etc., shall apply, except as otherwise provided, without regard to taxable year to the same extent as applicable for federal income tax purposes.
(Amended by Stats. 2005, Ch. 691, Sec. 67. Effective October 7, 2005.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 12 - Deferred Compensation, Etc. › ARTICLE 1 - Adoption of Subchapter D of the Internal Revenue Code Relating to Deferred Compensation, etc. › Section 24602.

24602. (a) In addition to the application of Part II (commencing with Section 421) of Subchapter D of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to certain stock options, paragraphs (1), (2), and (3) of Section 421(a) of the Internal Revenue Code shall also apply to any California qualified stock option that is granted to an individual whose earned income from the corporation granting the California qualified stock option for the taxable year in which that option is exercised does not exceed forty thousand dollars ($40,000). In the event that the option does not meet the necessary qualifications, the option shall be treated as a nonqualified stock option.
(b) For purposes of this section, “California qualified stock option” means a stock option that is issued and exercised pursuant to this section and that is designated by the corporation issuing the option as a California qualified stock option at the time the option is granted.
(c) (1) This section shall apply only to those stock options that are issued on or after January 1, 1997, and before January 1, 2002, by a corporation to its employee and are exercised by the employee, while employed by the corporation that issued those stock options (or within three months thereof, or within one year thereof if permanently and totally disabled as defined in Section 22(e)(3) of the Internal Revenue Code), during the taxable year with respect to any class of shares, or combination thereof, issued by the corporation, to the extent that the number of shares transferable by the exercise of the options does not exceed a total of 1,000 and have a combined fair market value of less than one hundred thousand dollars ($100,000). The combined fair market value of any stock shall be determined as of the time the option with respect to that stock is granted.
(2) Paragraph (1) shall be applied by taking options into account in the order in which they were granted.
(d) In the case of a California qualified stock option, no amount shall be included in the gross income of the employee until the time of the disposition of the option (or the stock acquired upon exercise of the option). No deduction shall be allowed under Section 162 of the Internal Revenue Code to the employer on the grant or exercise of a California qualified stock option.
(e) Subdivision (d) shall not apply to any stock option for which an election has been made under Section 83(b) of the Internal Revenue Code, relating to election to include in gross income in year of transfer.
(Amended by Stats. 2000, Ch. 862, Sec. 172. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 12 - Deferred Compensation, Etc. › ARTICLE 2 - Exceptions to Part I of Subchapter D of the Internal Revenue Code, Relating to Pension, Profit-Sharing, Stock Bonus Plans, etc. › Section 24611.

24611. (a) Section 404(k) of the Internal Revenue Code, relating to dividends paid deduction, shall apply to taxable years beginning on or after January 1, 1995.
(b) For taxable years beginning on or after January 1, 1998, Section 404(a)(9) of the Internal Revenue Code, relating to certain contributions to employee ownership plans, is modified to provide that Section 404(a)(9) of the Internal Revenue Code shall not apply to an “S corporation.”
(c) For taxable years beginning on or after January l, 1998, Section 404(k)(1) of the Internal Revenue Code, relating to deduction for dividends on certain employer securities, is modified to provide that the phrase “a corporation” shall read “a C corporation.”
(Amended by Stats. 2000, Ch. 862, Sec. 173. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 12 - Deferred Compensation, Etc. › ARTICLE 2 - Exceptions to Part I of Subchapter D of the Internal Revenue Code, Relating to Pension, Profit-Sharing, Stock Bonus Plans, etc. › Section 24612.

24612. Sections 413(b)(6) and 413(c)(5) of the Internal Revenue Code, relating to liability for funding tax, shall not apply.
(Added by Stats. 1992, Ch. 698, Sec. 22. Effective September 15, 1992.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 1 - Accounting Periods › Section 24632.

24632. The taxable year of a taxpayer may not be different than the taxable year used for purposes of the Internal Revenue Code, unless initiated or approved by the Franchise Tax Board, or otherwise required under Section 24634.
(Amended by Stats. 2000, Ch. 862, Sec. 175. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 1 - Accounting Periods › Section 24633.

24633. If a taxpayer changes its annual accounting period, the new accounting period shall become the taxpayer’s taxable year only if the change is approved by the Franchise Tax Board. For purposes of this part, if a taxpayer to whom Section 24631(g) applies adopts an annual accounting period (as defined in Section 24631(c)) other than a calendar year, the taxpayer shall be treated as having changed its annual accounting period.
(Amended by Stats. 2000, Ch. 862, Sec. 176. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 1 - Accounting Periods › Section 24633.5.

24633.5. (a) In the case of any “S corporation” or personal service corporation required to change its accounting period by the federal Tax Reform Act of 1986 (Public Law 99-514) as modified by Section 10206 of Public Law 100-203 and Section 1008(e) of Public Law 100-647, that change shall be treated as initiated by the “S corporation” or personal service corporation with the consent of the Franchise Tax Board.
(b) With respect to any beneficiary, partner, or shareholder which is required to include the items from more than one taxable year of the trust, partnership, or corporation in any one taxable year, any income in excess of expenses for the short taxable year resulting from the change described in subdivision (a) or subdivision (a) of Section 17551.5 shall be taken into account ratably in each of the first four taxable years beginning after December 31, 1986, unless the beneficiary, partner, or shareholder elects to include all that income in the beneficiary’s, partner’s, or shareholder’s taxable year with or within which the trust’s, partnership’s, or corporation’s short taxable year ends.
(c) The spreading of income over four years, as allowed by subdivision (b), shall not apply unless the taxpayer receives similar treatment for federal income tax purposes.
(d) For taxable years beginning on or after January 1, 1987, each of the following shall apply:
(1) The adjusted basis of any partner’s interest in a partnership or shareholder’s stock in an “S corporation” shall be determined as if all of the income to be taken into account ratably in the four taxable years referred to in subdivision (b) were included in gross income for the first of those taxable years.
(2) If any interest in a partnership or stock in an “S corporation” is disposed of before the last taxable year in the spread period, all amounts which would be included in the gross income of the partner or shareholder for subsequent taxable years in the spread period under subdivision (b) and attributable to the interest or stock disposed of shall be included in gross income for the taxable year in which the disposition occurs. For purposes of the preceding sentence, the term “spread period” means the period consisting of the four taxable years referred to in subdivision (b).
(Amended by Stats. 2000, Ch. 862, Sec. 177. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 1 - Accounting Periods › Section 24634.

24634. (a) A return for a period of less than 12 months (referred to in this article as “short period”) shall be made under any of the following circumstances:
(1) When the taxpayer, with the approval of the Franchise Tax Board, changes its annual accounting period. In such a case, the return shall be made for the short period beginning on the day after the close of the former taxable year and ending at the close of the day before the day designated as the first day of the new taxable year.
(2) When the taxpayer is in existence during only part of what would otherwise be its taxable year, except if the taxpayer’s existence terminates as a result of a reorganization described in Section 368(a)(1)(F) of the Internal Revenue Code.
(3) When the Franchise Tax Board terminates the taxpayer’s taxable year under Sections 19081 and 19082 (relating to tax in jeopardy).
(4) When the taxpayer is required to make a federal return for a period of less than 12 months.
(b) This section shall apply whether or not a federal return is required to be filed for a period of less than 12 months.
(c) If a return is required to be filed under this section for a period of less than 12 months, that period shall be deemed to be a taxable year.
(Amended by Stats. 2000, Ch. 862, Sec. 178. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 1 - Accounting Periods › Section 24636.

24636. (a) If a separate return is made by a taxpayer subject to the tax imposed by Chapter 2, under Section 24634 on account of a change in the accounting period the net income, computed on the basis of the period for which the separate return is made, referred to in this section as “the short period,” shall be placed on an annual basis by multiplying the amount thereof by 12, and dividing by the number of months in the short period. The Franchise Tax Board shall compute the amount of a tax on the income placed on such annual basis, and shall allow the offset provided for in Article 3 of Chapter 2, from such tax. The tax due under this section, which shall not be subject of offset, shall be such part of the tax, less the offset allowed, computed on such annual basis as the number of months in the short period is of 12 months.
(b) If a taxpayer subject to the tax imposed by Chapter 2 establishes the amount of its net income for the period of 12 months beginning with the first day of the short period, computed as if such 12-month period were a taxable year, under the law applicable to such year, then the tax for the short period shall be reduced to an amount which is such part of the tax computed on the net income for such 12-month period as the net income computed on the basis of the short period is of the net income for the 12-month period. The taxpayer (other than a taxpayer to which the next sentence applies) shall compute the tax and file its return without the application of this section. If the taxpayer has disposed of substantially all its assets prior to the end of such 12-month period, then in lieu of the net income for such 12-month period there shall be used for the purposes of this section the net income for the 12-month period ending with the last day of the short period. The tax computed under this section shall in no case be less than the tax computed on the net income for the short period without placing such net income on an annual basis. The benefits of this section shall not be allowed unless the taxpayer, at such time as regulations prescribed hereunder require (but not after the time prescribed for the filing of the return for the first taxable year which ends on or after 12 months after the beginning of the short period), makes application therefor in accordance with such regulations. Such application, in case the return was filed without regard to this section, shall be considered a claim for credit or refund with respect to the amount by which the tax is reduced under this section. The Franchise Tax Board shall prescribe such regulations as it may deem necessary for the application of this section.
(c) In the case of a taxpayer required to file a short period return pursuant to Section 24634, the alternative minimum tax shall be determined in accordance with Section 443(d) of the Internal Revenue Code.
(Amended by Stats. 2000, Ch. 862, Sec. 179. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 1 - Accounting Periods › Section 24637.

24637. For taxable years beginning on or after January 1, 1987, Section 444 of the Internal Revenue Code, relating to election of taxable year other than required taxable year, shall be applicable, except that Section 444(c)(1), relating to effect of election, shall not apply.
(Amended by Stats. 2000, Ch. 862, Sec. 180. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 2 - Methods of Accounting › Section 24651.

24651. (a) Income shall be computed under the method of accounting on the basis of which the taxpayer regularly computes its income in keeping its books.
(b) If no method of accounting has been regularly used by the taxpayer, or if the method used does not clearly reflect income, the computation of income shall be made under such method as, in the opinion of the Franchise Tax Board, does clearly reflect income.
(c) Subject to subdivisions (a) and (b) and Section 24654, a taxpayer may compute income under any of the following methods of accounting—
(1) The cash receipts and disbursements method;
(2) An accrual method;
(3) Any other method permitted by this part; or
(4) Any combination of the foregoing methods permitted under regulations prescribed by the Franchise Tax Board.
(d) A taxpayer engaged in more than one trade or business may in computing income, use a different method of accounting for each trade or business.
(e) Except as otherwise expressly provided in this part, a taxpayer who changes the method of accounting on the basis of which it regularly computes its income in keeping its books shall, before computing its income under the new method, secure the consent of the Franchise Tax Board.
(f) If the taxpayer does not file with the Franchise Tax Board a request to change the method of accounting, the absence of the consent of the Franchise Tax Board to a change in the method of accounting shall not be taken into account for either of the following:
(1) To prevent the imposition of any penalty, or the addition of any amount to tax, under this part.
(2) To diminish the amount of that penalty or addition to tax.
(Amended by Stats. 1987, Ch. 1139, Sec. 159. 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 13 - Accounting Periods and Methods of Accounting › ARTICLE 2 - Methods of Accounting › Section 24652.

24652. (a) Section 447 of the Internal Revenue Code, relating to method of accounting for corporations engaged in farming, shall apply, except as otherwise provided.
(b) (1) For taxable years beginning on or after January 1, 2019, the amendments made by Section 13102(a) of the Tax Cuts and Jobs Act (Public Law 115-97) to Section 447 of the Internal Revenue Code, relating to method of accounting for corporations engaged in farming, 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. 29. (AB 91) Effective July 1, 2019.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 2 - Methods of Accounting › Section 24652.5.

24652.5. (a) (1) Section 447(i)(3) of the Internal Revenue Code, relating to reduction in account if farming business contracts, shall not apply.
(2) Section 447(i)(4) of the Internal Revenue Code, relating to income inclusions, shall not apply.
(3) (A) No suspense account may be established under Section 447(i) of the Internal Revenue Code, relating to suspense account for family corporations, by any corporation required by Section 447 of the Internal Revenue Code, relating to method of accounting for corporations engaged in farming, to change its method of accounting for any income year ending after June 8, 1997.
(B) (i) Each suspense account under Section 447(i) of the Internal Revenue Code shall be reduced (but not below zero) for each income year beginning after June 8, 1997, by an amount equal to the lesser of:
(I) The applicable portion of the account.
(II) Fifty percent of the net income of the corporation for the income year, or, if the corporation has no net income for that year, the amount of any net operating loss (as defined in Section 172 of the Internal Revenue Code and as modified for purposes of this part) for that income year.
For purposes of the preceding sentence, the amount of net income and net operating loss shall be determined without regard to this paragraph.
(ii) The amount of the applicable portion for any income year shall be reduced (but not below zero) by the amount of any reduction required for the income year under any other provision of Section 447(i) of the Internal Revenue Code.
(iii) Any reduction in a suspense account under this paragraph shall be included in gross income for the income year of the reduction.
(C) For purposes of subparagraph (B), the term “applicable portion” means, for any income year, the amount which would ratably reduce the amount in the account (after taking into account prior reductions) to zero over the period consisting of that income year and the remaining income years in those first 20 income years.
(D) Any amount in the account as of the close of that 20th year referred to in subparagraph (C) shall be treated as the applicable portion for each succeeding year thereafter to the extent not reduced under this paragraph for any prior income year after the 20th year.
(b) This section shall apply to income years ending on or after December 31, 1997.
(c) This section shall not apply to income years beginning on or after January 1, 1998.
(Amended (as added by Stats. 1998, Ch. 7) by Stats. 1998, Ch. 322, Sec. 89. Effective August 20, 1998.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 2 - Methods of Accounting › Section 24652.6.

24652.6. (a) For taxable years beginning on or after January 1, 2019, amendments made by Section 13102(e)(2) of the Tax Cuts and Jobs Act (Public Law 115-97), relating to preservation of suspense account rules with respect to any existing suspense accounts, shall apply to any suspense account existing as of the effective date of the act adding this subdivision that was not otherwise precluded by Section 24652.5.
(b) (1) Any change in method of accounting made pursuant to this section shall be treated for purposes of applying Section 24721, as initiated by the taxpayer and made with the consent of the Franchise Tax Board.
(2) Section 13102(e)(1) of the Tax Cuts and Jobs Act (Public Law 115-97) does not apply to this section.
(3) Notwithstanding paragraph (2), a taxpayer may elect to apply the provisions of this section to suspense accounts established before the effective date of the act adding this section.
(Added by Stats. 2019, Ch. 39, Sec. 30. (AB 91) Effective July 1, 2019.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 2 - Methods of Accounting › Section 24654.

24654. (a) Section 448 of the Internal Revenue Code, relating to limitation on use of cash method of accounting, shall apply, except as otherwise provided.
(b) For purposes of applying Section 448 of the Internal Revenue Code, Sections 801(d)(2), 801(d)(3), and 801(d)(5) of the Tax Reform Act of 1986 (Public Law 99-514), as modified by Section 1008(a) of Public Law 100-647, shall apply to each taxable year beginning on or after January 1, 1987.
(c) (1) For taxable years beginning on or after January 1, 2019, the amendments made by Section 13102(a) of the Tax Cuts and Jobs Act (Public Law 115-97) to Section 448 of the Internal Revenue Code, relating to limitation on use of cash method of accounting, 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. 31. (AB 91) Effective July 1, 2019.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 3 - Year of Inclusion › Section 24661.

24661. Section 451 of the Internal Revenue Code, relating to the general rule for taxable year of inclusion, shall apply, except as otherwise provided.
(Amended by Stats. 1994, Ch. 1243, Sec. 66. Effective September 30, 1994.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 3 - Year of Inclusion › Section 24661.3.

24661.3. (a) (1) The options under Sections 112(d)(2) and 112(d)(3) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. Sec. 7212(d)(2) and (3)), as in effect on October 12, 1998, shall be disregarded in determining the taxable year for which any payment under a production flexibility contract under Subtitle B of Title I of that act (as so in effect) is properly includable in gross income for purposes of this part, Part 10 (commencing with Section 17001), or Part 10.2 (commencing with Section 18401).
(2) In order to provide farmers with the same tax treatment for all payments in years beginning before January 1, 2002, with respect to production flexibility contract payments as provided under federal law as modified by Public Law 105-277, this subdivision shall apply to taxable years ending after December 31, 1995.
(b) Any option to accelerate the receipt of any payment under a production flexibility contract entered into on or after January 1, 2002, that is payable under the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. Sec. 7200 et seq.) as in effect on December 17, 1999, shall be disregarded in determining the taxable year for which that payment is properly includable in gross income for purposes of this part, Part 10 (commencing with Section 17001), or Part 10.2 (commencing with Section 18401).
(Added by Stats. 2002, Ch. 35, Sec. 54. Effective May 8, 2002.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 3 - Year of Inclusion › Section 24661.5.

24661.5. Section 451(e)(3) of the Internal Revenue Code, relating to special election rule, is modified by substituting the phrase “subdivision (b) of Section 24949.1” in lieu of the phrase “section 1033(e)(2)” contained therein.
(Amended by Stats. 2005, Ch. 691, Sec. 69. Effective October 7, 2005.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 3 - Year of Inclusion › Section 24661.6.

24661.6. Section 451(i) of the Internal Revenue Code, relating to special rule for sales or dispositions to implement Federal Energy Regulatory Commission or state electric restructuring policy, shall not apply.
(Added by Stats. 2005, Ch. 691, Sec. 70. Effective October 7, 2005.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 3 - Year of Inclusion › Section 24668.1.

24668.1. Any taxpayer who disposes of property as a result of the exercise of the power of requisition or condemnation may, at his or her election, have the income derived from that disposition taken into account pursuant to Section 24667, if the taxpayer and the acquiring entity have, in conformity with Section 1263.015 of the Code of Civil Procedure or Section 15854.1 of the Government Code, contracted for the payment of compensation for the acquisition in a manner which satisfies the requirements of Section 24667.
(Added by Stats. 1982, Ch. 1368, Sec. 4.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 3 - Year of Inclusion › Section 24672.

24672. (a) Where a taxpayer reports income arising from the sale or other disposition of property as provided in this article, and the entire income therefrom has not been reported prior to the year that the taxpayer ceases to be subject to the tax imposed by Chapter 2 (commencing with Section 23101) or Chapter 3 (commencing with Section 23501), the unreported income shall be included in the measure of the tax for the last year in which the taxpayer is subject to the tax imposed by Chapter 2 (commencing with Section 23101) or Chapter 3 (commencing with Section 23501).
(b) Subdivision (a) shall not be applicable where the installment obligation is transferred pursuant to a reorganization (as defined in Section 368(a) of the Internal Revenue Code) to another taxpayer that is a party to the reorganization (as defined in Section 368(b) of the Internal Revenue Code) subject to tax under the same chapter as the transferor, or is transferred to any exempt nonprofit cemetery corporation as defined in Section 23701c of this code.
(c) The determination of any deficiency resulting from this section shall be made under Article 3 (commencing with Section 19032) of Chapter 4 of Part 10.2, but the period of limitation under that article, and the accrual of interest under Article 6 (commencing with Section 19101) of Chapter 4 of Part 10.2, shall commence on the date the taxpayer ceases to be subject to the tax imposed by Chapter 2 (commencing with Section 23101) or Chapter 3 (commencing with Section 23501).
(Amended by Stats. 1996, Ch. 952, Sec. 51. Effective January 1, 1997.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 3 - Year of Inclusion › Section 24673.

24673. Where a corporation subject to the tax imposed by Chapter 2 is engaged in the performance of a contract in this State which will require more than a year to complete, the Franchise Tax Board may require that the income from the contract be reported on the basis of percentage of completion unless the corporation furnishes bond or other security guaranteeing the payment of a tax measured by the income received on the completion of the contract even though the corporation is not doing business in this State in the year subsequent to the year of completion.
(Added by Stats. 1955, Ch. 938.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 3 - Year of Inclusion › Section 24674.

24674. (a) If, in the case of a taxpayer owning any non-interest-bearing obligation issued at a discount and redeemable for fixed amounts increasing at stated intervals the increase in the redemption price of such obligation occurring in the taxable year does not (under the method of accounting used in computing its income) constitute income to it in such year, such taxpayer may, at its election made in its return for any taxable year, treat such increase as income received in such taxable year. If any such election is made with respect to any such obligation, it shall apply also to all such obligations owned by the taxpayer at the beginning of the first taxable year to which it applies and to all such obligations thereafter acquired by it and shall be binding for all subsequent taxable years, unless on application by the taxpayer the Franchise Tax Board permits it, subject to such conditions as the Franchise Tax Board deems necessary, to change to a different method.
(b) In the case of any obligation—
(1) Of the United States; or
(2) Of a state, a territory, or a possession of the United States, or any political subdivision of any of the foregoing, or of the District of Columbia,
which is issued on a discount basis and payable without interest at a fixed maturity date not exceeding one year from the date of issue, the amount of discount at which such obligation is originally sold shall not be considered to accrue until the date on which such obligation is paid at maturity, sold, or otherwise disposed of.
(Amended by Stats. 2000, Ch. 862, Sec. 184. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 3 - Year of Inclusion › Section 24675.

24675. If an amount representing compensatory damages is received or accrued by a taxpayer during a taxable year as the result of an award in a civil action for infringement of a patent issued by the United States, then the tax attributable to the inclusion of such amount in gross income for the taxable year shall not be greater than the aggregate of the increases in taxes which would have resulted if such amount had been included in gross income in equal installments for each month during which such infringement occurred.
(Amended by Stats. 2000, Ch. 862, Sec. 185. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 3 - Year of Inclusion › Section 24677.

24677. (a) If an amount representing damages is received or accrued by a corporation during a taxable year as a result of an award in a civil action for breach of contract or breach of a fiduciary duty or relationship, then the tax attributable to the inclusion in gross income for the taxable year of that part of the amount that would have been received or accrued by the corporation in a prior taxable year or years but for the breach of contract, or breach of a fiduciary duty or relationship, shall not be greater than the aggregate of the increases in taxes that would have resulted had that part been included in gross income for that prior taxable year or years.
(b) A corporation in computing the tax shall be entitled to deduct all credits and deductions for depletion, depreciation, and other items to which it would have been entitled, had the income been received or accrued by the corporation in the year during which it would have received or accrued it, except for the breach of contract or for the breach of fiduciary duty or relationship. The credits, deductions, or other items referred to in the prior sentence, attributable to property, shall be allowed only with respect to that part of the award which represents the corporation’s share of income from the actual operation of the property.
(c) Subdivision (a) shall not apply unless the amount representing damage is three thousand dollars ($3,000) or more.
(Amended by Stats. 2000, Ch. 862, Sec. 188. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 3 - Year of Inclusion › Section 24678.

24678. (a) If an amount representing damages is received or accrued during a taxable year as a result of an award in, or settlement of, a civil action brought under Section 4 of the act entitled “An act to supplement existing laws against unlawful restraints and monopolies, and for other purposes,” approved October 15, 1914 (commonly known as the Clayton Act), for injuries sustained by a corporation in its business or property by reason of anything forbidden in the antitrust laws, then the tax attributable to the inclusion of that amount in gross income for the taxable year shall not be greater than the aggregate of the increases in taxes which would have resulted if that amount had been included in gross income in equal installments for each month during the period in which the injuries were sustained by the corporation.
(b) This section shall apply to taxable years ending after June 23, 1961, but only with respect to amounts received or accrued after that date as a result of awards or settlements made after that date.
(Amended by Stats. 2000, Ch. 862, Sec. 189. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 3 - Year of Inclusion › Section 24679.

24679. For purposes of Sections 24675 through 24678, a fractional part of a month shall be disregarded unless it amounts to more than half a month, in which case it should be considered as a month.
(Added by Stats. 1961, Ch. 846.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 4 - Year of Deduction › Section 24681.

24681. Section 461 of the Internal Revenue Code, relating to the general rule for taxable year of deduction, shall apply, except as otherwise provided.
(Amended by Stats. 1993, Ch. 877, Sec. 68. Effective October 6, 1993.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 4 - Year of Deduction › Section 24682.

24682. Section 464 of the Internal Revenue Code, relating to limitations on deductions for certain farming expenses, shall apply, except as otherwise provided.
(Amended by Stats. 1993, Ch. 877, Sec. 69. Effective October 6, 1993.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 4 - Year of Deduction › Section 24685.

24685. (a) In the case of any taxpayer who elected to have former Section 24685 apply for that taxpayer’s last taxable year beginning prior to January 1, 1990, and who is required to change its method of accounting by reason of the amendments made by the act adding this section, each of the following shall apply:
(1) The change shall be treated as initiated by the taxpayer.
(2) The change shall be treated as having been made with the consent of the Franchise Tax Board.
(3) The net amount of adjustments required by Chapter 13 (commencing with Section 24631) to be taken into account by the taxpayer:
(A) Shall be reduced by the balance in the suspense account, under former Section 24685 as of the close of the last taxable year beginning before January 1, 1990, and
(B) Shall be taken into account over the two taxable year period beginning with the taxable year following that last taxable year, as follows:
The percentage to be
In the case of the:
taken into account is:
1st Year
50
2nd Year
50
(b) Notwithstanding subparagraph (B) of paragraph (3) of subdivision (a), if the period during which the adjustments are required to be taken into account under Chapter 13 (commencing with Section 24631) is less than two years, those adjustments shall be taken into account ratably over the shorter period.
(Amended by Stats. 2000, Ch. 862, Sec. 190. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 4 - Year of Deduction › Section 24685.5.

24685.5. (a) The amendment made by Section 7001(a) of the Internal Revenue Service Restructuring and Reform Act of 1998 (Public Law 105-206) to Section 404(a)(11) of the Internal Revenue Code, regarding determinations relating to deferred compensation, shall apply to taxable years beginning on or after January 1, 2002.
(b) In the case of any taxpayer required by enactment of this section to change its method of accounting, for that taxpayer’s first taxable year beginning on or after January 1, 2002, each of the following shall apply for purposes of this part, Part 10 (commencing with Section 17001), and Part 10.2 (commencing with Section 18401):
(1) The change shall be treated as initiated by the taxpayer.
(2) The change shall be treated as made with the consent of the Franchise Tax Board.
(3) The net amount of the adjustments required to be taken into account by the taxpayer under Chapter 13 (commencing with Section 24631) shall be taken into account ratably over the three taxable year period beginning with that taxpayer’s first taxable year beginning on or after January 1, 2002.
(Added by Stats. 2002, Ch. 35, Sec. 56. Effective May 8, 2002.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 4 - Year of Deduction › Section 24688.

24688. Section 467 of the Internal Revenue Code, relating to certain payments for the use of property or services, shall apply, except as otherwise provided.
(Amended by Stats. 1993, Ch. 877, Sec. 70. Effective October 6, 1993.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 4 - Year of Deduction › Section 24689.

24689. Section 468 of the Internal Revenue Code, relating to special rules for mining and solid waste reclamation and closing costs, shall apply, except as otherwise provided.
(Amended by Stats. 1993, Ch. 877, Sec. 71. Effective October 6, 1993.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 4 - Year of Deduction › Section 24690.

24690. (a) The provisions of Section 468A of the Internal Revenue Code, relating to special rules for nuclear decommissioning costs, shall be applicable, except as otherwise provided.
(b) The deduction allowed for the 1987 taxable year may include contributions to a fund that are required to bring the balance in that fund up to the balance it would have contained if allowable contributions had been made for the 1985 and 1986 taxable years.
(c) The provisions of Section 468A(e)(2) of the Internal Revenue Code, which impose a tax upon the gross income of the Nuclear Decommissioning Reserve Fund, shall be modified for purposes of this part to provide that a tax shall be imposed upon the gross income of that fund for any taxable year at a rate equal to the rate in effect for that taxable year under Section 23501. The income tax imposed upon the gross income of the fund by this section is in lieu of any other tax imposed by this part or Part 10 (commencing with Section 17001) upon or measured by that income.
(Amended by Stats. 2000, Ch. 862, Sec. 191. Effective January 1, 2001.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 4 - Year of Deduction › Section 24691.

24691. Section 465 of the Internal Revenue Code, relating to limitations of deductions to the amount at risk, shall apply.
(Added by Stats. 1988, Ch. 11, Sec. 78. Effective February 19, 1988. Applicable to income years beginning on or after January 1, 1987, by Sec. 95 of Ch. 78.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 11 - CORPORATION TAX LAW › CHAPTER 13 - Accounting Periods and Methods of Accounting › ARTICLE 4 - Year of Deduction › Section 24692.

24692. (a) Section 469 of the Internal Revenue Code, relating to passive activity losses and credits limited, shall apply, except as otherwise provided.
(b) Section 469(c)(7) of the Internal Revenue Code, relating to special rules for taxpayers in real property business, shall not apply.
(c) Section 469(d)(2) of the Internal Revenue Code, relating to passive activity credits, is modified to refer to the following credits:
(1) The credit for research expenses allowed by Section 23609.
(2) The credit for clinical testing expenses allowed by Section 23609.5.
(3) The credit for low-income housing allowed by Section 23610.5.
(4) The credit for certain wages paid (targeted jobs) allowed by Section 23621.
(d) Section 469(g)(1)(A) of the Internal Revenue Code is modified to provide that if all gain or loss realized on the disposition of the taxpayer’s entire interest in any passive activity (or former passive activity) is recognized, the excess of—
(1) The sum of—
(A) Any loss from that activity for that taxable year (determined after application of Section 469(b) of the Internal Revenue Code), plus
(B) Any loss realized on that disposition, over
(2) Net income or gain for the taxable year from all passive activities (determined without regard to losses described in paragraph (1)), shall be treated as a loss which is not from a passive activity.
(e) (1) For purposes of applying Section 469(i) of the Internal Revenue Code, relating to the twenty-five thousand dollars ($25,000) offset for rental real estate activities, the dollar limitation specified in Section 469(i)(2) of the Internal Revenue Code, relating to dollar limitation, for the credit allowed under Section 23610.5, relating to low-income housing, shall not apply.
(2) The amendments made to this subdivision by the act adding this paragraph shall apply to each taxable year beginning on or after January 1, 2020.
(f) Section 502 of the Tax Reform Act of 1986 (Public Law 99-514) shall apply.
(g) For each taxable year beginning on or after January 1, 1987, Section 10212 of Public Law 100-203, relating to treatment of publicly traded partnerships under Section 469 of the Internal Revenue Code, shall apply, except as otherwise provided.
(h) The amendments to Section 469(k) of the Internal Revenue Code made by Section 2004 of Public Law 100-647, relating to separate application of section in case of publicly traded partnerships, shall apply to each taxable year beginning on or after January 1, 1990, except as otherwise provided.
(Amended by Stats. 2019, Ch. 159, Sec. 27. (AB 101) Effective July 31, 2019.)