reglab/statecodes huggingface dataset:
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 2 - Imposition and Computation of Tax › Section 15204 - Computation of Tax-in General

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The gift tax is computed on the basis of the aggregate net
					 gifts made to a particular donee, not on the basis of the aggregate net gifts
					 made to all donees. Thus in each case there will be as many separate
					 computations of tax as there are donees.
For the method of computation of gift tax, see Revenue and
					 Taxation Code Section
					 15204.
In view of the method of computation of the gift tax as set
					 forth in Revenue and Taxation Code Section
					 15204,
					 the tax for any calendar year is in effect computed only on net taxable gifts
					 (i.e., the excess of all gifts over exemptions allowed) for that year, upon the
					 application of rates determined by the aggregate of all net gifts, which
					 include the specific exemption (see Section
					 15118), made to the donee both
					 during such year and all prior calendar years since 10 p.m. of June 21, 1939.
					 The same result is reached by computing the tax on all net taxable gifts for
					 prior years. This is the method used on form GT-1, Donor's Gift Tax Return, and
					 explained in the Instructions for Filing Your California Gift Tax Return. It
					 may be noted that in computing the tax on the return and pursuant to the
					 instructions the specific exemption is not deducted separately but is
					 automatically allowed in the tax table set forth in the instructions.
It may also be noted that if no gifts were made to a donee
					 during any preceding calendar year, the tax for the year during which gifts are
					 first made to the donee is computed by applying the specific exemption against
					 the first $25,000 tax rate bracket (see Revenue and Taxation Code Sections
					 15205
					 through
					 15208),
					 of net gifts made to the donee, by taxing the remainder of net gifts in the
					 first bracket at the first tax rate, by taxing the next $25,000 of net gifts at
					 the second tax rate, by taxing the amount of net gifts in the third tax rate
					 bracket at the third tax rate, and so on. See also Section
					 15426.1 and note application of
					 specific exemptions where the exemption is in an amount in excess of
					 $25,000.
NOTE: Reference: Section
					 15204,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 2 - Imposition and Computation of Tax › Section 15210 - Contingent or Conditional Gift

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
If a taxable transfer is made subject to a contingency or
					 condition upon the occurrence of which the interest of any donee in the
					 property transferred may, in whole or in part, be created, defeated, extended,
					 or abridged, the tax is computed at the highest rate possible upon the
					 happening of the contingency or condition. For example, A gives B a life
					 interest in property valued at $100,000, and C, D, and E, or the survivor, a
					 remainder interest in the property at B's death. C is not related to A. D and E
					 are brothers of A. In such case the tax on the remainder will be computed on
					 the supposition that the property will go to C, since a tax on a remainder to C
					 would be computed at higher rates than on a remainder going to D or E (see
					 Revenue and Taxation Code Sections
					 15110
					 through
					 15113
					 and
					 15205
					 through
					 15208).
					 Any person who pays the tax so computed may secure a refund in the event that D
					 or E survive B's death, in an amount equal to the difference between the tax
					 paid and the tax which would have been payable had it been computed on the
					 basis of a transfer to the actual survivor or survivors (see Revenue and
					 Taxation Code Section
					 16224).
The payment of a tax due on a contingent or conditional
					 gift may be deferred on the filing of a bond (see Revenue and Taxation Code
					 Sections
					 15931
					 through
					 15937),
					 and may under proper circumstances be the subject of a compromise (see Revenue
					 and Taxation Code Sections
					 15951
					 and
					 15952).
NOTE: Reference: Section
					 15210,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 2 - Imposition and Computation of Tax › Section 15211 - Computation Where Several Gifts Part of One Transaction

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Where a donor makes gifts of property to each of several
					 persons as part of one transaction under which each donee is to transfer the
					 property received by him to an ultimate donee, the Controller may elect to
					 disregard the severalty of the gifts and compute the tax payable on the
					 aggregate amount transferred as though each gift had been made directly to the
					 ultimate donee. An example of a situation of this kind is where A makes gifts
					 of $4,000 each to B, C, D, and E pursuant to an agreement that they, in turn,
					 will transfer the property given them to G. See also Section
					 15651 as to returns of gifts to
					 several persons as part of one transaction.
NOTE: Reference: Section
					 15211,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 3 - Community, Quasi-Community, and Separate Property › Section 15301 - Transfer of Community Property to One Spouse

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
If community property is transferred by gift from one
					 spouse to the other, the transferor's one-half interest in the community
					 property is subject to the Gift Tax Law, except that if the transfer occurred
					 on or after September 17, 1965 and prior to January 1, 1976, or at any time
					 after January 1, 1981, none of the property so transferred is subject to the
					 law.
1. Amendment
					 filed 7-2-81; effective thirtieth day thereafter (Register 81, No.
					 27).
Note: Authority cited: Section
						16506,
						Revenue and Taxation Code. Reference: Section
						1530,
						Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 3 - Community, Quasi-Community, and Separate Property › Section 15301.50 - Transfer of Quasi-Community Property to One Spouse

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
If quasi-community property is transferred by gift from one
					 spouse to the other, one-half of the property transferred is subject to the
					 Gift Tax Law except that if the transfer occurs on or after January 1, 1981
					 none of the property so transferred is subject to law. For the definition of
					 "quasi-community property," see Revenue and Taxation Code Section
					 15300.
1. Amendment
					 filed 7-2-81; effective thirtieth day thereafter (Register 81, No.
					 27).
Note: Authority cited: Section
						16506,
						Revenue and Taxation Code. Reference: Section
						15301,
						Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 3 - Community, Quasi-Community, and Separate Property › Section 15302 - Transfer of Community Property to Third Person

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
If community property is transferred by gift to a person
					 other than one of the spouses, the whole of such property is subject to the
					 Gift Tax Law, each spouse being considered a donor of one-half.
NOTE: Reference: Section
					 15302,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 3 - Community, Quasi-Community, and Separate Property › Section 15302.50 - Transfer of Quasi-Community Property to Third Person

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
If quasi-community property is transferred to a third
					 person, all of the property is subject to the Gift Tax Law and the spouse who
					 owned the property is the donor, except that at the election of both spouses,
					 each shall be the donor as to one-half.
NOTE: Reference: Section
					 15302.5,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 3 - Community, Quasi-Community, and Separate Property › Section 15303.50 - Transfer of Quasi-Community Property into Community Property or Other Equal Ownership

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
If quasi-community property of either spouse is transferred
					 into ownership of both spouses as community property, joint tenancy or equal
					 interests as tenants in common such a transfer is not subject to the Gift Tax
					 Law. If such transfer is made by the wife on or after September 15, 1961 and
					 prior to January 1, 1976 and the wife died thereafter within these dates,
					 one-half may be subject to the Gift Tax Law under the provisions of Revenue and
					 Taxation Code Section
					 15303.5
					 then in effect.
NOTE: Reference: Section
					 15303.5,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 3 - Community, Quasi-Community, and Separate Property › Section 15306 - Presumption

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The usual presumption that property acquired by a husband
					 or wife after marriage is community property does not apply as against any
					 claim by the State for the gift tax. The burden of proving any property to be
					 community property is on the person who claims that it has such status. A claim
					 that property is community property must be supported by form GT-3, entitled
					 "Marital Property Declaration." This declaration should be executed by one of
					 the spouses, or if it is for some reason impossible for one of the spouses to
					 execute the declaration, by any person having actual knowledge of the facts
					 required, and submitted to the State Controller. Copies of form GT-3 may be
					 obtained from the Division Tax Administration Gift Tax of the Controller's
					 office in Los Angeles, Sacramento or San Francisco.
1. Amendment
					 filed 7-2-81; effective thirtieth day thereafter (Register 81, No.
					 27).
Note: Authority cited: Section
						16506,
						Revenue and Taxation Code. Reference: Section
						15306,
						Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 3 - Community, Quasi-Community, and Separate Property › Section 15310 - Transfer of Separate Property Between Spouses

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Transfers on or after January 1, 1981. If
				  either spouse transfers separate property by gift to the other spouse on or
				  after January 1, 1981, the transfer is not subject to the Gift Tax
				  Law.
(b) Transfers on or after
				  January 1, 1976 and before January 1, 1981. If either spouse transfers separate
				  property by gift to the other spouse on or after January 1, 1976, and before
				  January 1, 1981, one-half of the property so transferred is not subject to the
				  Gift Tax Law. This exclusion, however, does not apply to any separate property
				  or proceeds thereof which had been converted from community or quasi-community
				  property (see Revenue and Taxation Code Section
				  15310(b)
				  then in effect). In the latter case the entire separate property transferred by
				  the donor spouse is subject to the Gift Tax Law. For this purpose, see Section
				  13805.
(c) Transfers prior to January 1, 1976. If
				  either spouse transfers separate property to the other spouse by gift made
				  prior to January 1, 1976, all of the property so transferred is subject to the
				  Gift Tax Law.
1. Amendment
					 filed 7-2-81; effective thirtieth day thereafter (Register 81, No.
					 27).
Note: Authority cited: Section
						16506,
						Revenue and Taxation Code. Reference: Section
						15310,
						Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 4 - Annual Exemptions › Section 15401 - Application

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The annual exemption is applicable where the aggregate
					 gifts to a donee are $3,000 or less. Where the annual gifts to a donee exceed
					 $3,000 the exemption operates as to the first $3,000 of the gifts. Thus, for
					 example, if A makes gifts of money to B in the calendar year 1974 totaling
					 $2,500 in amount, the entire $2,500 is within the exemption. On the other hand,
					 if the gifts total $3,500 in amount, $3,000 would be within the exemption and
					 the excess would be subject to the tax imposed, unless also within one of the
					 other exemptions specified in the law (i.e., the specific exemption, the
					 intangible exemption, or the charitable exemption).
In view of this exemption a donor may, during a calendar
					 year, make as many gifts not exceeding $3,000 in amount or value to as many
					 different persons as he may desire without incurring a tax thereon. For
					 example, A may give $3,000 in cash to each of ten persons during any calendar
					 year. Since the gift to each individual donee would not exceed $3,000, no tax
					 would be due.
The $3,000 annual exemption referred to above applies to
					 gifts made on or after July 29, 1967. The annual exemption for gifts made prior
					 thereto is $4,000 and the same principles otherwise apply.
NOTE: Reference: Section
					 15401,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 4 - Annual Exemptions › Section 15401.1 - When to be Taken

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The annual exemption must be taken or used in the year for
					 which it is allowed. The exemption permitted for the year 1974, for instance,
					 must be taken or used in respect to gifts made during the calendar year 1974.
					 It cannot be taken or used as to gifts made during the calendar year
					 1975.
NOTE: Reference: Section
					 15401,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 4 - Annual Exemptions › Section 15402 - Exclusions from Exemption

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
In addition to the exclusions from the annual exemption
					 provided in Revenue and Taxation Code Section
					 15402,
					 the following gifts are not within this exemption:
(a) A gift made on or after March 6, 1940,
				  and prior to July 16, 1941, by a donor who is an alien nonresident of the
				  United States.
(b) A gift made in
				  trust after 10 p.m. of June 21, 1939, and prior to March 6, 1940.
Note: As to the definition of the term "future interest,"
					 see Section
					 15103.9.
NOTE: Reference: Section
					 15402,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 4.1 - Specific Exemption › Section 15421 - Specific Exemption-in General

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
In addition to the other exemptions mentioned in this
					 group, a donor is entitled to a specific exemption in respect to all gifts made
					 by him to any one donee during the course of his (the donor's) lifetime. This
					 exemption varies in amount in accordance with the donee's degree of
					 relationship to the donor (see Revenue and Taxation Code Sections
					 15110
					 through
					 15113,
					 and
					 15421
					 through
					 15424).
A donor who is an alien nonresident of the United States is
					 not entitled to the specific exemption in respect to any gifts made by him on
					 or after March 6, 1940.
It is to be noted that the specific exemption is the same
					 in amount as the specific exemption in the Inheritance Tax Law.
NOTE: Reference: Section
					 15421,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 4.1 - Specific Exemption › Section 15425 - Alien Nonresident of United States

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The term "alien nonresident of the United States" means any
					 person whose residence is outside the United States and who is not a citizen of
					 the United States.
NOTE: Reference: Section
					 15425,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 4.1 - Specific Exemption › Section 15426 - Application-in General

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Only one specific exemption is allowed in respect to a
					 particular donee regardless of the number of calendar years during which the
					 donor may make gifts to such donee.
The exemption must be applied to the amount of net gifts
					 (see Section
					 15118), as they are made. If,
					 however, the exemption, or the unused portion thereof, exceeds the amount of
					 net gifts made in a particular calendar year, the excess may be applied to the
					 net gifts made in subsequent years, until the maximum amount of the exemption
					 has been used. Thus, for example, if A makes net gifts totaling $2,500 to B,
					 his brother, during the calendar year 1958, the entire specific exemption of
					 $2,000 which is allowable in such case must be taken for the gifts on the
					 return filed for 1958. On the other hand, if the net gifts to B had totaled
					 $1,500, only $1,500 of the exemption would have to be taken for the year 1958,
					 and A could apply the balance of the exemption, or $500, to the amount of net
					 gifts made by him to B in later calendar years.
It is to be noted that no part of the specific exemption is
					 considered to be used in any calendar year until after the application of the
					 annual exemption for that year and the charitable and intangibles exemptions,
					 if any.
NOTE: Reference: Section
					 15426,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 4.1 - Specific Exemption › Section 15426.1 - Application Against Lowest Tax Rate Bracket

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The specific exemption must be applied against the lowest
					 tax rate bracket or brackets of net gifts made to a particular donee (see
					 Revenue and Taxation Code Sections
					 15205
					 to
					 15207,
					 inclusive), and consumes the first portion of such bracket or brackets up to
					 the amount allowed. Thus, where the specific exemption is under $25,000 it is
					 applied against the first tax rate bracket and the remainder of net gifts in
					 that bracket is taxable at the first and lowest tax rate for that particular
					 donee class(see Revenue and Taxation Code Sections
					 15110
					 to
					 15113
					 and
					 15205
					 to
					 15207,
					 inclusive). Where the specific exemption is over $25,000, as in the case of the
					 $60,000 exemption of a donee spouse (see Revenue and Taxation Code Section
					 15421,
					 as amended by Chapter 942, Statutes 1975, in effect as to gifts made on or
					 after January 1, 1976), the first $25,000 thereof is applied to the first and
					 lowest tax rate bracket, the next $25,000 is applied to the second and next
					 lower bracket and the remaining $10,000 of the exemption is applied to the
					 third tax rate bracket, any excess of gifts being taxed in the rate of the
					 third tax bracket until that bracket is consumed up to $100,000, and so on into
					 the higher tax brackets. (See also Section
					 15204.)
NOTE: Reference: Section
					 15426,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 4.1 - Specific Exemption › Section 15427 - Change in Specific Exemption of Donee

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
When the sum of all net gifts made to a donee equals or
					 exceeds the amount of the specific exemption allowable on a gift made in any
					 calendar year, no further exemption is allowable (see Revenue and Taxation Code
					 Section
					 15427).
					 The application of this provision may be illustrated in the following
					 situations:
(a) Minor Child Becomes an
				  Adult.
A minor child's specific exemption of $12,000 ceases upon
					 reaching 18 years of age when the $5,000 specific exemption of an adult child
					 then becomes applicable. Thus, a donor who has used $5,000 or more of the
					 specific exemption with respect to gifts to a minor child is not entitled to
					 any additional specific exemption to the same donee after the child reaches
					 majority at 18 years of age. For example, if A makes a gift of $10,000 to B,
					 his minor child, in 1973, the net gift after excluding the $3,000 annual
					 exemption is $7,000 which is within the $12,000 specific exemption of a minor
					 child donee. In 1974 B reaches majority and thereafter A makes a further gift
					 to B of $20,000. No additional specific exemption is applicable since A has
					 used more than a $5,000 specific exemption with respect to B while B was a
					 minor. The later gift would, however, be subject to an annual exemption of
					 $3,000.
(b) Specific
				  Exemption of a Spouse on and after January 1, 1976.
By legislative act the specific exemption of a spouse donee
					 on and after January 1, 1976 is $60,000, the previous exemption being $5,000
					 (see Revenue and Taxation Code Section
					 15421
					 before and after the 1975 amendment). To the extent that the prior net gifts
					 have not exceeded the $60,000 an additional specific exemption is allowable
					 until that amount is reached in respect to net gifts made after January 1, 1976
					 to the same donee. If, however, the prior net gifts equal or exceed the $60,000
					 amount, no further specific exemption is allowable.
NOTE: Reference: Section
					 15427,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 4.2 - Charitable Exemption › Section 15441 - Gifts to State of California

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Gifts to the State of California include gifts to any
					 department, board, commission, or other agency of the State.
NOTE: Reference: Section
					 15441,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 4.2 - Charitable Exemption › Section 15441.1 - Gifts to United States

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Gifts to the United States include gifts to any department,
					 board, commission, or other agency of the United States.
NOTE: Reference: Section
					 15441,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 4.2 - Charitable Exemption › Section 15441.2 - Gifts to Public Corporations

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Gifts to public corporations include gifts to any county,
					 city and county, city, or district of this State; to any housing authority
					 created pursuant to the "Housing Authorities Law" of California; to the
					 University of the State of California; and to the State Bar of
					 California.
NOTE: Reference: Section
					 15441,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 4.2 - Charitable Exemption › Section 15442 - Charitable Organization

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
An organization will ordinarily be considered to be
					 charitable in character if it is one organized and existing for the principal
					 purpose of promoting the welfare of mankind at large, or of a community, or of
					 some class forming a part of it indefinite as to numbers and individuals, and
					 operates without pecuniary profit or gain to its incorporators, shareholders,
					 or members. Among other organizations that commonly fall in this category are
					 the American National Red Cross; the Boy Scouts of America; and religious,
					 social, educational, recreational, and cemetery nonprofit corporations
					 organized pursuant to Division 2 of Title 1 of the Corporations Code.
NOTE: Reference: Section
					 15442,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 4.2 - Charitable Exemption › Section 15442.1 - Charitable Gift Generally

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
In general, a charitable gift includes any gift for the
					 benefit of an indefinite number of unnamed persons and designed to do any of
					 the following:
(a) Bring them under
				  the influence of religion or education.
(b) Relieve them from disease or
				  suffering.
(c) Assist them to
				  establish themselves in life.
(d)
				  Erect or maintain public buildings or works.
(e) Otherwise lessen the burdens or make
				  better the conditions of the general public or some class of the general
				  public.
NOTE: Reference: Section
					 15442,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 4.2 - Charitable Exemption › Section 15442.2 - Religious Charitable Gift

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A gift to or for a conceded and established religious
					 organization for any of its purposes will generally be considered as charitable
					 in nature. Such a gift may be in the form of a gift for the beautification or
					 maintenance of the organization's place of worship, for the maintenance of a
					 cemetery operated by it, for the purchase of equipment, or for use in
					 missionary purposes.
NOTE: Reference: Section
					 15442,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 4.2 - Charitable Exemption › Section 15442.3 - Gift for Care of Cemetery Plot

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A gift to an individual in trust for use in caring for the
					 donor's burial plot is not a charitable gift. On the other hand, a gift or
					 contribution to a private cemetery organization in California for deposit in
					 the latter's perpetual or special care fund, and for use in caring for the
					 donor's burial plot located within the organization's cemetery, or for use in
					 caring for the donor's and any other person's burial plot located within the
					 cemetery, is a charitable gift.
NOTE: Reference: Section
					 15442,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 4.2 - Charitable Exemption › Section 15442.4 - Educational Charitable Gift

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A gift to or for an institution established for the purpose
					 of advancing the learning or education of an indefinite and undetermined group
					 of people, and not operated for private gain, is ordinarily charitable in
					 nature. The charitable character of the gift is not vitiated by the fact that
					 the institution may charge tuition, if its income from such source is used for
					 its support and is not diverted to private purposes.
Gifts for the founding of public institutions of learning,
					 for providing scholarships for worthy young men and women, for the
					 establishment of university chairs, and for the maintenance of public libraries
					 are all charitable in nature.
NOTE: Reference: Section
					 15442,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 4.2 - Charitable Exemption › Section 15442.5 - Gifts for Indigent and Dependent People

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Commonly within the category of charitable gifts are gifts
					 for the use of widows and orphans, gifts for placing and maintaining free beds
					 in hospitals for deserving sick people in indigent circumstances, gifts to
					 orphan asylums, and gifts to public institutions for the blind.
NOTE: Reference: Section
					 15442,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 4.2 - Charitable Exemption › Section 15442.6 - Gifts for Benefit of Animals

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Charitable gifts are not limited to those for the benefit
					 of mankind, but may also take form as gifts for the benefit of animals, as, for
					 example, to prevent cruelty to them.
NOTE: Reference: Section
					 15442,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 4.2 - Charitable Exemption › Section 15442.7 - Gift for Promotion of Political Purposes

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A gift for the promotion of political purposes may be
					 charitable in nature if the ends sought are not opposed to good morals and can
					 be attained by peaceable means, and not by war, riot, or revolution. However,
					 the charitable exemption is not applicable if the gift is made to an
					 organization a substantial part of the activities of which is carrying on
					 propaganda or otherwise attempting to influence legislation.
NOTE: Reference: Section
					 15442,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 4.2 - Charitable Exemption › Section 15442.8 - Proof Required

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
In order to prove his right to a charitable exemption, a
					 donor must submit such documents or evidence as may be requested by the State
					 Controller. Note: As to the meaning of "foreign state or country," see Section
					 15451.1.(b).
NOTE: Reference: Section
					 15442,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 4.3 - Intangible Exemption › Section 15451 - Proof Required

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
In order to prove his right to an intangibles exemption, a
					 donor must submit an affidavit of nonresidence on Form GT-11, together with
					 such other documents or evidence as may be requested by the State
					 Controller.
NOTE: Reference: Section
					 15451,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 4.3 - Intangible Exemption › Section 15451.1 - Foreign State or Country

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
For the purpose of the Gift Tax Law the term "foreign state
					 or country" means any jurisdiction other than one embraced within the United
					 States.
NOTE: Reference: Section
					 15451,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 5 - Valuation › Section 15551 - Market Value

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The value of any property for the purpose of taxation under
					 the Gift Tax Law is ordinarily the market value of the property at the date of
					 the gift. "Market value," as a general rule, is the price that a willing buyer
					 would pay to a willing seller of property, neither being under any compulsion
					 to buy or sell.
If there is more than one unit of property included in a
					 gift, the market value of the whole will generally be determined by
					 ascertaining the market value on the date of the gift of each individual unit.
					 In the case of a gift of stocks or bonds, each stock or bond will be treated as
					 an individual unit.
All relevant facts and elements of value as of the time of
					 a gift will be considered in determining its value.
NOTE: Reference: Section
					 15551,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 5 - Valuation › Section 15551.1 - Encumbrances and Liens

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
If any property is transferred subject to a bona fide
					 encumbrance or lien, such as a trust deed, mortgage, or pledge, the market
					 value of the property is its gross market value at the date of the gift, less
					 the amount of the encumbrance or lien at that time.
NOTE: Reference: Section
					 15551,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 5 - Valuation › Section 15551.2 - Community Property Transferred to Spouse

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The value of a gift of community property to one or the
					 other of the spouses is ordinarily one-half of the total market value of the
					 property at the date of the gift (see Section
					 15301).
Note: As to returning gifts of community property, see
					 Sections 15656.3 and
					 15656.6.
NOTE: Reference: Section
					 15551,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 5 - Valuation › Section 15551.3 - Separate Property Transferred into Community

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The value of a gift to a spouse effected by the transfer or
					 conversion of his or her spouse's separate property into their community is
					 ordinarily one-half of the total market value of the separate property at the
					 date of the gift.
Note: As to marital exclusion, see Section
					 15310. As to returning transfers
					 or conversions of separate property into community property, see Section
					 15656.4.
NOTE: Reference: Section
					 15551,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 5 - Valuation › Section 15551.4 - Real Property-in General

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The valuation of real property for gift tax purposes will
					 depend upon all the facts and circumstances in each case. In making the
					 valuation all relevant and competent evidence will be given
					 consideration.
NOTE: Reference: Section
					 15551,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 5 - Valuation › Section 15551.5 - Local Assessed Value

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Unless it represents the actual market value of the
					 property, the assessed value of real property for ad valorem taxation will not
					 be accepted as the value thereof for gift tax purposes.
NOTE: Reference: Section
					 15551,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 5 - Valuation › Section 15551.6 - Securities-in General

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The value of a gift of stocks or bonds is, generally, the
					 market value per share or bond at the date of the gift.
NOTE: Reference: Section
					 15551,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 5 - Valuation › Section 15551.7 - Listed Securities and Unlisted Securities Traded on Open Market

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Selling Prices.
In the case of a gift of stocks or bonds which have a
					 market, on a stock exchange, in an over-the-counter market, or otherwise, the
					 mean between the highest and lowest quoted selling prices on the date of the
					 gift will be deemed the market value per share or bond.
If there were no sales on the date of the gift, but there
					 were sales on dates within a reasonable period both before and after the date
					 of gift, the market value is determined:
(1) By taking the means between the highest
				  and lowest quoted selling prices on the nearest date before and the nearest
				  date after the date of gift;
(2) By
				  then prorating the difference between such mean prices to the date of gift,
				  considering only the respective numbers of trading days between the selling
				  dates and the date of gift in such proration; and
(3) By finally adding or subtracting, as the
				  case may be, the prorated portion of the difference to or from the mean price
				  on the nearest date before the date of gift. For example, assume that a gift of
				  stock is made on Friday, June 15, that sales of the stock nearest such date
				  occurred two trading days before (Wednesday, June 13) and three trading days
				  after (Wednesday, June 20), and that on these days the mean sale prices per
				  share were $10 and $15, respectively. Dividing the difference between the mean
				  sale prices ($5) by the number of trading days before and after the date of
				  gift (2 + 3) gives $1 per trading day. The portion of the difference
				  attributable to the period from the nearest date before the date of gift to the
				  date of gift (2 x $1) is $2. This amount added to the mean price on the nearest
				  date before the date of gift ($10) equals $12. Accordingly, $12 will be taken
				  as representing the market value of a share of the stock on the date of gift.
				  If, instead, on June 13 and June 20 the mean sale prices per share were $15 and
				  $10, respectively, $13 will be taken as representing the market value of a
				  share of the stock on the date of gift. As another example, assume that the
				  gift was made on Sunday, October 7, and that Saturday and Sunday were not
				  trading days. If sales of stock occurred one trading day before (Friday,
				  October 5) at a mean sale price per share of $20 and one trading day after
				  (Monday, October 8) at a mean sale price per share of $23, then the market
				  value per share of stock as of the date of gift is $21.50.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 5 - Valuation › Section 15551.8 - Additional Factors in Valuation of Listed and Traded Securities

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
In any case in which it is established that the value per
					 share or bond on the basis of selling or bid and asked prices does not reflect
					 the market value of a security, other relevant facts and elements of value will
					 also be considered in determining its market value. A case of this kind would
					 include one in which the sale of a listed stock on the date of a gift was made
					 at a price arrived at on the basis of erroneous, false, and misleading
					 information concerning the affairs and financial condition of the issuing
					 corporation.
The so-called "blockage rule" is not recognized in
					 determining the value of securities for gift tax purposes.
NOTE: Reference: Section
					 15551,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 5 - Valuation › Section 15551.9 - Untraded and Closely Owned Securities

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The value of corporate or other bonds not
				  traded on an open market is usually arrived at by giving consideration to the
				  security behind the bonds, the interest yield, the date of maturity, and other
				  relevant factors.
The value of shares of closely held stock is usually
					 arrived at by first ascertaining the net worth (the excess of the assets,
					 including good will, if any, over liabilities) of the corporation as a going
					 business, and then assigning to each share its proportion of such worth.
In determining net worth the tangible assets of the
					 business in question should be valued at their market value at the date of gift
					 to a going concern, and not at their cost to the particular business nor at
					 their book value.
(b) Among
				  other factors that will be considered in the valuation of closely held stock
				  are the following:
(1) The period of time
				  that the issuing corporation has been in existence and its position in the
				  trade.
(2) The nature of the
				  corporation.
(3) The operating
				  history of the corporation and, particularly, its earnings over a reasonable
				  period of time.
(4) The balance
				  sheet of the corporation.
(5) The
				  standard of earnings maintained by concerns engaged in similar lines of
				  endeavor.
(6) The strength and
				  danger of competition, both existing and potential.
(7) The management and personnel.
(8) The effect of possible governmental
				  regulation.
(9) The present and
				  future requirements of the corporation in the matter of new land, buildings, or
				  equipment.
(10) Current business
				  policy.
(11) Dividend payment
				  history.
(12) The prices paid on
				  private sales of the shares to persons who were in a position to know their
				  value.
(13) The prospects for
				  future earnings.
NOTE: Reference: Section
					 15551,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 5 - Valuation › Section 15551.10 - Interest and Dividends

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
If the donee does not receive the interest or dividends as
					 part of the gift, interest accrued on bonds or dividends declared on stocks
					 prior to the date of a gift of the bonds or stocks will not be treated as
					 augmenting the taxable value of the bonds or stocks.
NOTE: Reference: Section
					 15551,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 5 - Valuation › Section 15551.11 - Good Will-General Method of Valuing

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Unless the facts and circumstances of a particular case
					 require the use of a different method, the valuation of good will is arrived at
					 as follows:
(a) Determine the total
				  amount of assets used in the business, other than good will, patents,
				  trademarks, copyrights, and the like.
(b) Determine the liabilities of the business
				  and deduct the amount thereof from the sum determined pursuant to subdivision
				  (a).
(c) Determine what percentage
				  of the difference determined pursuant to subdivision (b) represents a fair
				  return thereon (in the absence of evidence to the contrary, 15 percent thereof
				  will ordinarily be considered a proper percentage of return), and then multiply
				  the amount of such difference by the percentage determined. The product will
				  represent the amount of a fair return.
(d) Determine the average net profit of the
				  business for a reasonable period immediately prior to the date of the gift.
				  Five years will ordinarily represent a "reasonable period."
(e) Deduct the amount of the fair return
				  determined pursuant to subdivision (c) from the average net profit.
(f) Determine the "number of years purchase
				  period." By this is meant the number of years after a sale of the business for
				  which a buyer, as part of the purchase price, would pay the seller the average
				  net profit of the business. Unless the nature and character of the business in
				  any particular case require a different figure, the number of years purchase
				  period will be considered to be five years.
(g) Multiply the difference between the
				  amount of fair return and the average net profit, as determined pursuant to
				  subdivision (e), by the number of years purchase period. The product will
				  constitute the amount of good will.
NOTE: Reference: Section
					 15551,
					 Revenue and Taxation Code.
1. Editorial
					 correction of subsection (c) (Register 78, No.
					 42).
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 5 - Valuation › Section 15551.12 - Other Factors Considered in Valuing Good Will

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Among other factors to be considered in the valuation of
					 the good will of a business are those listed in subdivisions (b)(1) to (13) of
					 Section
					 15551.9.
NOTE: Reference: Section
					 15551, Revenue and Taxation
					 Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 5 - Valuation › Section 15551.13 - Notes and Accounts Receivable

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The value of a note or account receivable, whether secured
					 or unsecured, is presumed to be its face value plus accrued interest, if any,
					 to the date of gift. A lower value may be established by the submission of
					 satisfactory proof that the note or account is worth less because of default in
					 interest, uncollectibility in part by reason of the insolvency of the maker or
					 other parties liable, or for other cause.
NOTE: Reference: Section
					 15551,
					 Revenue and Taxation Code.