reglab/statecodes huggingface dataset:
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 6 - Accounting Periods and Methods of Accounting › Section 17552.3.

17552.3. (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 21, 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 10.2 (commencing with Section 18401), and Part 11 (commencing with Section 23001).
(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 10.2 (commencing with Section 18401), and Part 11 (commencing with Section 23001).
(Added by Stats. 2002, Ch. 35, Sec. 22. Effective May 8, 2002.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 6 - Accounting Periods and Methods of Accounting › Section 17553.

17553. Section 454(c) of the Internal Revenue Code, relating to matured United States Savings Bonds, shall not apply.
(Amended by Stats. 1999, Ch. 987, Sec. 40. Effective October 10, 1999.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 6 - Accounting Periods and Methods of Accounting › Section 17555.

17555. In any case where spouses file separate returns, the Franchise Tax Board may distribute, apportion, or allocate gross income between the spouses, if it is determined that such distribution, apportionment, or allocation is necessary in order to reflect the proper income of the spouses.
(Amended by Stats. 2016, Ch. 50, Sec. 101. (SB 1005) Effective January 1, 2017.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 6 - Accounting Periods and Methods of Accounting › Section 17556.

17556. Notwithstanding Section 442 of the Internal Revenue Code, the estate may change its annual accounting period one time without the approval of the Franchise Tax Board.
(Added by Stats. 1983, Ch. 1102, Sec. 22. Effective September 27, 1983.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 6 - Accounting Periods and Methods of Accounting › Section 17559.

17559. (a) Section 451(e) of the Internal Revenue Code, relating to special rule for proceeds from livestock sold on account of drought, is modified by substituting the phrase “drought, flood, or other weather-related conditions, and that those conditions” in lieu of the phrase “drought conditions, and that these drought conditions” contained therein.
(b) This section shall apply to sales and exchanges after December 31, 1996.
(c) This section shall not apply to taxable years beginning on or after January 1, 1998.
(Amended (as added by Stats. 1998, Ch. 7) by Stats. 1998, Ch. 322, Sec. 30. Effective August 20, 1998.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 6 - Accounting Periods and Methods of Accounting › Section 17560.

17560. (a) The provisions of Sections 811(c)(4), 811(c)(6), and 811(c)(7) of Public Law 99-514, as modified by Section 1008(f) of Public Law 100-647, shall apply.
(b) The provisions of Section 812 of Public Law 99-514, relating to the disallowance of use of installment method for certain obligations as modified by Section 1008(g) of Public Law 100-647, shall apply to taxable years beginning on or after January 1, 1987.
(c) The repeal of Section 453C of the Internal Revenue Code by Section 10202(a) of Public Law 100-203, relating to repeal of the proportionate disallowance of the installment method, shall apply to dispositions in taxable years beginning on or after January 1, 1990.
(d) (1) In the case of any installment obligation to which Section 453(l)(2)(B) of the Internal Revenue Code applies, in lieu of the provisions of Section 453(l)(3)(A) of the Internal Revenue Code, the tax imposed under Section 17041 or 17048 for any taxable year for which payment is received on that obligation shall be increased by the amount of interest determined in the manner provided under Section 453(l)(3)(B) of the Internal Revenue Code.
(2) The provisions of Sections 10202 and 10204 of Public Law 100-203 are modified to provide for each of the following:
(A) The provisions of Section 10202 shall apply to dispositions in taxable years beginning on or after January 1, 1990.
(B) The provisions of Section 10204 shall apply to costs incurred in taxable years beginning on or after January 1, 1990.
(C) Any adjustments required by Section 481 of the Internal Revenue Code shall be included in gross income as follows:
(i) Fifty percent in the first taxable year beginning on or after January 1, 1990.
(ii) Fifty percent in the second taxable year beginning on or after January 1, 1990.
(e) (1) In the case of any installment obligation to which Section 453A of the Internal Revenue Code applies and which is outstanding as of the close of the taxable year, in lieu of the provisions of Section 453A(c)(1) of the Internal Revenue Code, the tax imposed by Section 17041 or 17048 for the taxable year shall be increased by the amount of interest determined in the manner provided under Section 453A(c)(2) of the Internal Revenue Code.
(2) The provisions of Section 453A(c)(3)(B) of the Internal Revenue Code, relating to the maximum rate used in calculating the deferred tax liability, are modified to refer to the maximum rate of tax imposed under Section 17041 in lieu of the maximum rate of tax imposed under Section 1 or 11 of the Internal Revenue Code.
(Amended by Stats. 2002, Ch. 807, Sec. 8. Effective September 23, 2002.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 6 - Accounting Periods and Methods of Accounting › Section 17560.5.

17560.5. (a) Section 461(j) of the Internal Revenue Code, relating to limitation on excess farm losses of certain taxpayers, shall not apply.
(b) (1) Section 11012(a) of the Tax Cuts and Jobs Act (Public Law 115-97), relating to limitation on excess business losses on noncorporate taxpayers, shall apply except as otherwise provided.
(2) Section 461(l)(1) of the Internal Revenue Code, relating to limitation, as amended by Section 11012(a) of the Tax Cuts and Jobs Act (Public Law 115-97), is modified by substituting “beginning after December 31, 2018” for the phrase “beginning after December 31, 2017, and before January 1, 2026.”
(3) Section 461(l)(2) of the Internal Revenue Code, relating to disallowed loss carryover, as amended by Section 11012(a) of the Tax Cuts and Jobs Act (Public Law 115-97), is modified by substituting “Any loss which is disallowed under paragraph (1) shall be treated as a carryover excess business loss for the following taxable year.” for “Any loss which is disallowed under paragraph (1) shall be treated as a net operating loss carryover to the following taxable year under section 172.”
(4) Section 461(l)(3)(A) of the Internal Revenue Code, as amended by Section 11012 (a) of the Tax Cuts and Jobs Act (Public Law 115-97), is modified by inserting “(i) the sum of (I) Any prior year carryover excess business losses, plus” below “In general, the term “excess businesses loss means the excess (if any) of.”
(5) Section 461(l)(3)(A)(i) of the Internal Revenue Code, as amended by Section 11012 (a) of the Tax Cuts and Jobs Act (Public Law 115-97), is modified by inserting “(II)” for “(i)”.
(6) Section 461(l)(6) of the Internal Revenue Code, relating to coordination with section 469, as amended by Section 11012(a) of the Tax Cuts and Jobs Act (Public Law 115-97), is modified by substituting “Section 17561” for “section 469.”
(Amended by Stats. 2019, Ch. 39, Sec. 13. (AB 91) Effective July 1, 2019.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 6 - Accounting Periods and Methods of Accounting › Section 17561.

17561. (a) Section 469(c)(7) of the Internal Revenue Code, relating to special rules for taxpayers in real property business, shall not apply.
(b) 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 17052.12.
(2) The credit for certain wages paid (targeted jobs) allowed by Section 17053.7.
(3) The credit allowed by former Section 17057 (relating to clinical testing expenses).
(4) The credit for low-income housing allowed by Section 17058.
(c) 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.
(d) (1) For purposes of applying the provisions of 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 17058, 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.
(e) Section 502 of the Tax Reform Act of 1986 (P.L. 99-514) shall apply.
(f) For taxable years beginning on or after January 1, 1987, the provisions of Section 10212 of Public Law 100-203, relating to treatment of publicly traded partnerships under Section 469 of the Internal Revenue Code, shall be applicable.
(Amended by Stats. 2019, Ch. 159, Sec. 25. (AB 101) Effective July 31, 2019.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 6 - Accounting Periods and Methods of Accounting › Section 17563.5.

17563.5. (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 the 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 10.2 (commencing with Section 18401), and Part 11 (commencing with Section 23001):
(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 6 (commencing with Section 17551) 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. 34, Sec. 24. Effective May 8, 2002. See identical section added by Stats. 2002, Ch. 35.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 6 - Accounting Periods and Methods of Accounting › Section 17563.5.

17563.5. (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 the 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 10.2 (commencing with Section 18401), and Part 11 (commencing with Section 23001):
(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 6 (commencing with Section 17551) 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. 24. Effective May 8, 2002.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 6 - Accounting Periods and Methods of Accounting › Section 17563.51.

17563.51. (a) 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.
(b) For taxable years beginning on or after January 1, 2019, the 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.
(c) 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.
(d) 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.
(e) For taxable years beginning on or after January 1, 2019, the amendments made by Section 13102(c) of the Tax Cuts and Jobs Act (Public Law 115-97) to Section 471 of the Internal Revenue Code, relating to the general rule for inventories, shall apply, except as otherwise provided.
(f) (1) Any change in method of accounting made pursuant to this section shall be treated for purposes of applying Section 481 of the Internal Revenue Code, as applicable for California purposes under Section 17551, 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 subdivisions (a) to (e), inclusive.
(3) (A) Notwithstanding paragraph (2) and except as provided in subparagraph (B), a taxpayer may elect to apply the provisions of this section to taxable years beginning on or after January 1, 2018, and before January 1, 2019.
(B) Notwithstanding paragraph (2), a taxpayer may elect to apply the provisions of subdivision (b) to suspense accounts established before the effective date of the act adding this subdivision.
(Added by Stats. 2019, Ch. 39, Sec. 14. (AB 91) Effective July 1, 2019.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 6 - Accounting Periods and Methods of Accounting › Section 17565.

17565. (a) 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.
(b) For purposes of this section, whenever a taxpayer is required to make a federal return for a period of less than 12 months, that period shall be deemed to be a taxable year, and Section 17552 shall apply.
(Added by Stats. 1989, Ch. 1352, Sec. 53.5. Effective October 2, 1989. Applicable to taxable years beginning on or after January 1, 1989, by Sec. 172 of Ch. 1352.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 7 - Exempt Trusts and Common Trust Funds › ARTICLE 1 - General Rule › Section 17631.

17631. An organization described in Section 401(a) of the Internal Revenue Code shall be exempt from taxation under this part unless such exemption is denied under Sections 17635 to 17639, inclusive.
(Amended by Stats. 1983, Ch. 488, Sec. 39. Effective July 28, 1983.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 7 - Exempt Trusts and Common Trust Funds › ARTICLE 1 - General Rule › Section 17632.

17632. An organization exempt from taxation under Section 17631 shall be subject to tax to the extent provided in Article 2 (commencing at Section 17651) of this chapter (relating to tax on unrelated income), but, notwithstanding Article 2, shall be considered an organization exempt from income taxes for the purpose of any law which refers to organizations exempt from income taxes.
(Amended by Stats. 1961, Ch. 847.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 7 - Exempt Trusts and Common Trust Funds › ARTICLE 1 - General Rule › Section 17635.

17635. (a) An organization described in Section 401(a) of the Internal Revenue Code which is subject to the provisions of this section shall not be exempt from taxation under Section 17631 if it has engaged in a prohibited transaction after December 31, 1960.
(b) An organization described in Section 401(a) of the Internal Revenue Code shall be denied exemption from taxation under Section 17631 by reason of subdivision (a) only for taxable years after the taxable year during which it is notified by the Franchise Tax Board that it has engaged in a prohibited transaction, unless the organization entered into the prohibited transaction with the purpose of diverting corpus or income of the organization from its exempt purposes, and the transaction involved a substantial part of the corpus or income of the organization.
(Amended by Stats. 1985, Ch. 106, Sec. 131.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 7 - Exempt Trusts and Common Trust Funds › ARTICLE 1 - General Rule › Section 17636.

17636. Sections 17635 to 17639, inclusive, apply to any organization described in Section 401(a) of the Internal Revenue Code.
(Amended by Stats. 1983, Ch. 488, Sec. 41. Effective July 28, 1983.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 7 - Exempt Trusts and Common Trust Funds › ARTICLE 1 - General Rule › Section 17637.

17637. For purposes of Sections 17635 to 17639, inclusive, the term “prohibited transaction” means any transaction in which an organization subject to the provisions of Sections 17635 to 17639, inclusive—
(a) Lends any part of its income or corpus, without the receipt of adequate security and a reasonable rate of interest, to;
(b) Pays any compensation, in excess of a reasonable allowance for salaries or other compensation for personal services actually rendered, to;
(c) Makes any part of its services available on a preferential basis to;
(d) Makes any substantial purchase of securities or any other property, for more than adequate consideration in money or money’s worth, from;
(e) Sells any substantial part of its securities or other property, for less than an adequate consideration in money or money’s worth to; or
(f) Engages in any other transaction which results in a substantial diversion of its income or corpus to;
the creator of such organization (if a trust); a person who has made a substantial contribution to such organization; a member of the family (as defined in Section 267(c)(4) of the Internal Revenue Code) of an individual who is the creator of such trust or who has made a substantial contribution to such organization; or a corporation controlled by such creator or person through the ownership, directly or indirectly, of 50 percent or more of the total combined voting power of all classes of stock entitled to vote or 50 percent or more of the total value of shares of all classes of stock of the corporation.
(Amended by Stats. 1983, Ch. 488, Sec. 42. Effective July 28, 1983.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 7 - Exempt Trusts and Common Trust Funds › ARTICLE 1 - General Rule › Section 17638.

17638. Any organization described in Section 401(a) of the Internal Revenue Code or a trust which is denied exemption under Section 17631 by reason of Section 17635, with respect to any taxable year following the taxable year in which notice of denial of exemption was received, may, under regulations prescribed by the Franchise Tax Board, file claim for exemption, and if the Franchise Tax Board, pursuant to such regulations, is satisfied that such organization will not knowingly again engage in a prohibited transaction, such organization shall be exempt with respect to taxable years after the year in which such claim is filed.
(Amended by Stats. 1983, Ch. 488, Sec. 43. Effective July 28, 1983.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 7 - Exempt Trusts and Common Trust Funds › ARTICLE 1 - General Rule › Section 17639.

17639. For purposes of subdivision (a) of Section 17637, a bond, debenture, note, or certificate or other evidence of indebtedness (hereinafter in this section referred to as “obligation”) acquired by a trust described in Section 401(a) of the Internal Revenue Code shall not be treated as a loan made without the receipt of adequate security if—
(a) The obligation is acquired—
(1) On the market, either (i) at the price of the obligation prevailing on a national securities exchange which is registered with the Securities and Exchange Commission, or (ii) if the obligation is not traded on such a national securities exchange, at a price not less favorable to the trust than the offering price for the obligation as established by current bid and asked prices quoted by persons independent of the issuer;
(2) From an underwriter, at a price (i) not in excess of the public offering price for the obligation as set forth in a prospectus or offering circular filed with the Securities and Exchange Commission, and (ii) at which a substantial portion of the same issue is acquired by persons independent of the issuer; or
(3) Directly from the issuer, at a price not less favorable to the trust than the price paid currently for a substantial portion of the same issue by persons independent of the issuer;
(b) Immediately following acquisition of the obligation—
(1) Not more than 25 percent of the aggregate amount of obligations issued in the issue and outstanding at the time of acquisition is held by the trust, and
(2) At least 50 percent of the aggregate amount referred to in paragraph (1) is held by persons independent of the issuer; and
(c) Immediately following acquisition of the obligation, not more than 25 percent of the assets of the trust is invested in obligations of persons described in Section 17637.
(Amended by Stats. 1999, Ch. 987, Sec. 42. Effective October 10, 1999.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 7 - Exempt Trusts and Common Trust Funds › ARTICLE 1 - General Rule › Section 17640.

17640. Subdivision (a) of Section 17637 shall not apply to a loan made by a trust described in Section 401(a) of the Internal Revenue Code to the employer (or to a renewal of such a loan or, if the loan is repayable upon demand, to a continuation of such a loan) if the loan bears a reasonable rate of interest, and if (in the case of a making or renewal)—
(a) The employer is prohibited (at the time of the making or renewal) by any law of the United States or regulation thereunder from directly or indirectly pledging, as security for such a loan, a particular class or classes of his assets the value of which (at that time) represents more than one-half of the value of all his or her assets;
(b) The making or renewal, as the case may be, is approved in writing as an investment that is consistent with the exempt purposes of the trust by a trustee who is independent of the employer, and no other similar trustee had previously refused to give that written approval; and
(c) Immediately following the making or renewal, as the case may be, the aggregate amount loaned by the trust to the employer, without the receipt of adequate security, does not exceed 25 percent of the value of all the assets of the trust.
(d) For purposes of subdivision (b), the term “trustee” means, with respect to any trust for which there is more than one trustee who is independent of the employer, a majority of those independent trustees. For purposes of subdivision (c), the determination as to whether any amount loaned by the trust to the employer is loaned without the receipt of adequate security shall be made without regard to Section 17639.
(Amended by Stats. 1999, Ch. 987, Sec. 43. Effective October 10, 1999.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 7 - Exempt Trusts and Common Trust Funds › ARTICLE 2 - Taxation of Business Income of Certain Exempt Organizations › Section 17651.

17651. (a) There is hereby imposed for each taxable year on the unrelated business taxable income (as defined in Section 23732) of every trust a tax computed as provided in subdivision (e) of Section 17041. In making that computation for purposes of this section, the term “taxable income” as used in subdivisions (a) and (e) of Section 17041 shall be read as “unrelated business taxable income” as defined in Section 23732.
(b) The tax imposed by subdivision (a) shall apply in the case of any trust which is exempt, except as provided in this article, from taxation under this part by reason of Section 17631 and which, if it were not for such exemption, would be subject to Chapter 9 (commencing with Section 17731) relating to estates, trusts, beneficiaries, and decedents.
(Amended by Stats. 1999, Ch. 987, Sec. 44. Effective October 10, 1999.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 7 - Exempt Trusts and Common Trust Funds › ARTICLE 3 - Common Trust Funds › Section 17671.

17671. Section 584 of the Internal Revenue Code, relating to common trust funds, shall apply, except as otherwise provided.
(Amended by Stats. 1999, Ch. 987, Sec. 45. Effective October 10, 1999.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 7 - Exempt Trusts and Common Trust Funds › ARTICLE 3 - Common Trust Funds › Section 17677.

17677. Every trust company operating a common trust fund shall make a return under penalties of perjury for each taxable year, stating specifically with respect to such fund the items of gross income and the deductions allowed by this article and shall include in the return information sufficient to identify the trusts and estates entitled to share in the taxable income of the common trust fund and the amount of the proportionate share of each such participant.
(Repealed and added by Stats. 1983, Ch. 488, Sec. 48. Effective July 28, 1983.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 8 - Natural Resources › Section 17681.

17681. Subchapter I of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to natural resources, shall apply, except as otherwise provided.
(Amended by Stats. 1993, Ch. 873, Sec. 20. Effective October 6, 1993.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 8 - Natural Resources › Section 17681.3.

17681.3. The amendments made to Section 613A(d)(4) of the Internal Revenue Code, relating to certain refiners excluded, by Section 1328 of the Energy Tax Incentives Act of 2005 (Title XIII of the Energy Policy Act of 2005, Public Law 109-58), shall not apply.
(Added by Stats. 2010, Ch. 14, Sec. 33. (SB 401) Effective January 1, 2011.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 8 - Natural Resources › Section 17681.6.

17681.6. Section 613A(c)(6)(H) of the Internal Revenue Code, relating to temporary suspension of taxable income limit with respect to marginal production, shall not apply.
(Added by Stats. 2005, Ch. 691, Sec. 36. Effective October 7, 2005.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 9 - Estates, Trusts, Beneficiaries, and Decedents › Section 17731.

17731. (a) Subchapter J of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to estates, trusts, beneficiaries, and decedents, shall apply, except as otherwise provided.
(b) Section 692(d)(2) of the Internal Revenue Code, relating to the ten thousand-dollar ($10,000) minimum benefit, does not apply.
(Amended by Stats. 2005, Ch. 691, Sec. 37. Effective October 7, 2005.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 9 - Estates, Trusts, Beneficiaries, and Decedents › Section 17731.5.

17731.5. (a) Section 641(c)(2)(A) of the Internal Revenue Code is modified to read: “The amount of the tax imposed by subdivision (e) of Section 17041 shall be determined by using the highest rate of tax applicable to an individual under subdivision (a) of Section 17041.”
(b) Section 641(c)(2)(B) of the Internal Revenue Code is modified to read: “The credit allowed under subdivision (b) of Section 17733 shall be zero.”
(Amended by Stats. 2002, Ch. 35, Sec. 26. Effective May 8, 2002. Applicable as prescribed by Sec. 63 of Ch. 35.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 9 - Estates, Trusts, Beneficiaries, and Decedents › Section 17732.

17732. Section 642(b) of the Internal Revenue Code, relating to deduction for personal exemption, shall not apply.
(Amended by Stats. 1999, Ch. 987, Sec. 46. Effective October 10, 1999.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 9 - Estates, Trusts, Beneficiaries, and Decedents › Section 17733.

17733. (a) An estate shall be allowed a credit of ten dollars ($10) against the tax imposed under Section 17041, less any amounts imposed under paragraph (1) of subdivision (d) or paragraph (1) of subdivision (e), or both, of Section 17560.
(b) (1) Except as provided in paragraph (2), a trust shall be allowed a credit of one dollar ($1) against the tax imposed under Section 17041, less any amounts imposed under paragraph (1) of subdivision (d) or paragraph (1) of subdivision (e), or both, of Section 17560.
(2) (A) A disability trust, as defined in Section 642(b)(2)(C) of the Internal Revenue Code, shall be allowed a credit in an amount equal to the personal exemption credit authorized for a single individual pursuant to subdivision (a) of Section 17054.
(B) The credit authorized by subparagraph (A) shall be subject to the credit reduction provisions of Section 17054.1. For purposes of making the adjustments required by Section 17054.1, the adjusted gross income of the disability trust shall be computed in accordance with Section 67(e) of the Internal Revenue Code, relating to determination of adjusted gross income in case of estates and trusts.
(C) This paragraph applies to taxable years beginning on or after January 1, 2004.
(c) The credits allowed by this section shall be in lieu of the credits allowed under Section 17054 (relating to credit for personal exemption).
(Amended by Stats. 2005, Ch. 691, Sec. 37.5. Effective October 7, 2005.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 9 - Estates, Trusts, Beneficiaries, and Decedents › Section 17734.

17734. For purposes of computing “taxable income of a nonresident or part-year resident” under paragraph (1) of subdivision (i) of Section 17041, in the case of a nonresident beneficiary, income and deduction derived through an estate or trust shall be included in that computation only to the extent that the income or deduction is derived by the estate or trust from sources within this state.
(Amended by Stats. 2001, Ch. 920, Sec. 16. Effective January 1, 2002.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 9 - Estates, Trusts, Beneficiaries, and Decedents › Section 17734.6.

17734.6. Section 646 of the Internal Revenue Code, relating to tax treatment of electing Alaska Native Settlement Trusts, shall not apply.
(Added by Stats. 2005, Ch. 691, Sec. 37.6. Effective October 7, 2005.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 9 - Estates, Trusts, Beneficiaries, and Decedents › Section 17736.

17736. (a) Section 642(c)(2) of the Internal Revenue Code is modified for purposes of this part by substituting “December 31, 1970” for “October 9, 1969” throughout that paragraph.
(b) In the case of a trust, the deduction allowed by Section 642(c) of the Internal Revenue Code is subject to Section 681 of the Internal Revenue Code, relating to limitation on charitable deduction.
(Amended by Stats. 2018, Ch. 92, Sec. 195. (SB 1289) Effective January 1, 2019.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 9 - Estates, Trusts, Beneficiaries, and Decedents › Section 17737.

17737. For purposes of computing the taxable income of the estate or trust and the taxable income of a spouse to whom Section 682(a) of the Internal Revenue Code (relating to income of an estate or trust in the case of divorce, etc.) applies, that spouse shall be considered as the beneficiary for purposes of this chapter.
(Amended by Stats. 1987, Ch. 1138, Sec. 113. Effective September 25, 1987. Applicable to taxable years beginning on or after January 1, 1987, by Sec. 189 of Ch. 1138.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 9 - Estates, Trusts, Beneficiaries, and Decedents › Section 17742.

17742. (a) Except as otherwise provided in this chapter, the income of an estate or trust is taxable to the estate or trust. The tax applies to the entire taxable income of an estate, if the decedent was a resident, regardless of the residence of the fiduciary or beneficiary, and to the entire taxable income of a trust, if the fiduciary or beneficiary (other than a beneficiary whose interest in such trust is contingent) is a resident, regardless of the residence of the settlor.
(b) For purposes of this article the residence of a corporate fiduciary of a trust means the place where the corporation transacts the major portion of its administration of the trust.
(Repealed and added by Stats. 1983, Ch. 488, Sec. 59. Effective July 28, 1983.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 9 - Estates, Trusts, Beneficiaries, and Decedents › Section 17743.

17743. Where the taxability of income under this chapter depends on the residence of the fiduciary and there are two or more fiduciaries for the trust, the income taxable under Section 17742 shall be apportioned according to the number of fiduciaries resident in this state pursuant to rules and regulations prescribed by the Franchise Tax Board.
(Repealed and added by Stats. 1983, Ch. 488, Sec. 59. Effective July 28, 1983.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 9 - Estates, Trusts, Beneficiaries, and Decedents › Section 17744.

17744. Where the taxability of income under this chapter depends on the residence of the beneficiary and there are two or more beneficiaries of the trust, the income taxable under Section 17742 shall be apportioned according to the number and interest of beneficiaries resident in this state pursuant to rules and regulations prescribed by the Franchise Tax Board.
(Repealed and added by Stats. 1983, Ch. 488, Sec. 59. Effective July 28, 1983.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 9 - Estates, Trusts, Beneficiaries, and Decedents › Section 17745.

17745. (a) If, for any reason, the taxes imposed on income of a trust which is taxable to the trust because the fiduciary or beneficiary is a resident of this state are not paid when due and remain unpaid when that income is distributable to the beneficiary, or in case the income is distributable to the beneficiary before the taxes are due, if the taxes are not paid when due, such income shall be taxable to the beneficiary when distributable to him except that in the case of a nonresident beneficiary such income shall be taxable only to the extent it is derived from sources within this state.
(b) If no taxes have been paid on the current or accumulated income of the trust because the resident beneficiary’s interest in the trust was contingent such income shall be taxable to the beneficiary when distributed or distributable to him or her.
(c) The tax on that income which is taxable to the beneficiary under subdivisions (a) or (b) is a tax on the receipt of that income distributed or on the constructive receipt of that distributable income. For purposes of this section income accumulated by a trust continues to be income even though the trust provides that the income (ordinary or capital) shall become a part of the corpus.
(d) The tax attributable to the inclusion of that income in the gross income of that beneficiary for the year that income is distributed or distributable under subdivision (b) shall be the aggregate of the taxes which would have been attributable to that income had it been included in the gross income of that beneficiary ratably for the year of distribution and the five preceding taxable years, or for the period that the trust accumulated or acquired income for that contingent beneficiary, whichever period is the shorter.
(e) In the event that a person is a resident beneficiary during the period of accumulation, and leaves this state within 12 months prior to the date of distribution of accumulated income and returns to the state within 12 months after distribution, it shall be presumed that the beneficiary continued to be a resident of this state throughout the time of distribution.
(f) The Franchise Tax Board shall prescribe such regulations as it deems necessary for the application of this section.
(Repealed and added by Stats. 1983, Ch. 488, Sec. 59. Effective July 28, 1983.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 9 - Estates, Trusts, Beneficiaries, and Decedents › Section 17745.1.

17745.1. The amendments of Sections 17742 and 17745 made at the 1963 Regular Session of the Legislature shall be applicable only with respect to taxable years beginning after December 31, 1962. Whether or not the income of a trust which is or was accumulated or is or was accumulated and distributed or accumulated and distributable is taxable by California for the years prior to 1963 shall be determined as if Sections 17742 and 17745 had not been amended at the 1963 Regular Session of the Legislature and without inferences drawn from the fact that such amendments were not made applicable with respect to taxable years beginning before January 1, 1963.
(Repealed and added by Stats. 1983, Ch. 488, Sec. 59. Effective July 28, 1983.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 9 - Estates, Trusts, Beneficiaries, and Decedents › Section 17751.

17751. Section 645 of the Internal Revenue Code, relating to certain revocable trusts treated as part of estate, is modified as follows:
(a) An election under Section 645(a) of the Internal Revenue Code for federal purposes shall be treated for purposes of this part as an election made by the executor, if any, of the estate and the trustee of the qualified revocable trust under Section 645(a) of the Internal Revenue Code for state purposes and a separate election under paragraph (3) of subdivision (e) of Section 17024.5 shall not be allowed.
(b) If the executor, if any, of the estate and the trustee of a qualified revocable trust fail to make an election under Section 645(a) of the Internal Revenue Code for federal purposes with respect to that qualified revocable trust, that trust shall be treated and taxed for purposes of this part as a separate trust, an election under Section 645(a) of the Internal Revenue Code for state purposes with respect to that trust shall not be allowed, and a separate election under paragraph (3) of subdivision (e) of Section 17024.5 shall not be allowed with respect to that trust.
(Amended by Stats. 2002, Ch. 35, Sec. 27. Effective May 8, 2002. Applicable as prescribed by Sec. 64 of Ch. 35.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 9 - Estates, Trusts, Beneficiaries, and Decedents › Section 17752.

17752. Section 663 of the Internal Revenue Code, relating to special rules applicable to Sections 661 and 662, is modified as follows:
(a) Section 663(b) of the Internal Revenue Code, relating to distributions in the first 65 days of the taxable year, is modified as follows:
(1) An election under Section 663(b) of the Internal Revenue Code for federal purposes shall be treated for purposes of this part as an election made by the executor of the estate or the fiduciary of the trust, as the case may be, under Section 663(b) of the Internal Revenue Code for state purposes and a separate election under paragraph (3) of subdivision (e) of Section 17024.5 shall not be allowed.
(2) If the executor of the estate or the fiduciary of the trust, as the case may be, fails to make an election under Section 663(b) of the Internal Revenue Code for federal purposes with respect to an amount properly paid or credited within 65 days of the taxable year, that amount shall not be considered for purposes of this part as having been paid or credited on the last day of the preceding taxable year, an election under Section 663(b) of the Internal Revenue Code for state purposes with respect to that amount shall not be allowed, and a separate election under paragraph (3) of subdivision (e) of Section 17024.5 shall not be allowed with respect to that amount.
(b) Section 663(c) of the Internal Revenue Code, relating to separate shares treated as separate estates or trusts, is modified as follows:
(1) An election under Section 663(c) of the Internal Revenue Code for federal purposes shall be treated for purposes of this part as an election made by the executor of the estate or the fiduciary of the trust, as the case may be, under Section 663(c) of the Internal Revenue Code for state purposes and a separate election under paragraph (3) of subdivision (e) of Section 17024.5 shall not be allowed.
(2) If the executor of the estate or the fiduciary of the trust, as the case may be, fails to make an election under Section 663(c) of the Internal Revenue Code for federal purposes with respect to separate shares treated as separate estates or trusts, an election under Section 663(c) of the Internal Revenue Code for state purposes shall not be allowed, and a separate election under paragraph (3) of subdivision (e) of Section 17024.5 shall not be allowed.
(Added by Stats. 1998, Ch. 322, Sec. 34. Effective August 20, 1998.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 9 - Estates, Trusts, Beneficiaries, and Decedents › Section 17755.

17755. For taxable years beginning on or after January 1, 2014, Section 664(c)(2) of the Internal Revenue Code, relating to excise tax, shall not apply and, in lieu thereof, the unrelated business taxable income, as defined in Section 23732, of every charitable remainder annuity trust or charitable remainder unitrust shall be subject to tax under Section 17651.
(Repealed and added by Stats. 2014, Ch. 478, Sec. 4. (AB 2754) Effective January 1, 2015.)
2023 California Code › Revenue and Taxation Code - RTC › DIVISION 2 - OTHER TAXES › PART 10 - PERSONAL INCOME TAX › CHAPTER 9 - Estates, Trusts, Beneficiaries, and Decedents › Section 17760.

17760. Section 684 of the Internal Revenue Code, relating to recognition of gain on certain transfers to certain foreign trusts and estates, shall not apply.
(Added by Stats. 2005, Ch. 691, Sec. 38. Effective October 7, 2005.)