reglab/statecodes huggingface dataset:
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 5 - Valuation › Section 15551.14 - Interest in Business

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
In determining the value of any business, or interest
					 therein, transferred without an adequate and full consideration in money or
					 money's worth, a fair appraisal as of the date of the gift should be made of
					 all the assets of the business, tangible and intangible, including good will,
					 and the business or interest therein should be given a net value equal to the
					 amount which a willing purchaser, whether an individual or a corporation, would
					 pay therefor in view of the net value of the assets of the business and its
					 demonstrated earning capacity.
All factors relative to the valuation of other property, if
					 applicable, will be considered in determining the valuation of a proprietary or
					 partnership interest in a business. All evidence bearing upon such valuation
					 should be submitted with the return, including copies of reports in any case in
					 which examinations of the business have been made by accountants, engineers or
					 other technical experts as of or near 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 15551.15 - Patent, Trademark, or Copyright

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The value of a patent, trademark, or copyright is usually
					 the present worth of the estimated future earnings thereof.
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 15551.16 - Growing Crop

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Among other factors to be considered in the valuation of a
					 growing crop are the following:
(a)
				  The probable market value of the crop when harvested.
(b) The probable cost of producing and
				  marketing the crop.
(c) The price,
				  if any, paid at or about the date of the gift for futures in the same kind of
				  crop.
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 15552.1 - Estates, Income and Annuities for Life of One Person

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The present value of a life estate in
				  property, the income from which is to be paid annually in an unfixed amount to
				  a single life tenant is computed as follows:
(1) Determine the age and sex of the life
				  tenant as of his or her birthday nearest the date of the gift.
(2) Consult Table A(1) or Table A(2),
				  whichever is appropriate, in Section
				  15552.8,
				  and ascertain therefrom the life estate factor (the present value of a life
				  estate of $1 per year) for the life of a person of the same age as the life
				  tenant.
CAUTION
: Table A(1) is the appropriate table
					 if the life tenant is a male person. Table A(2) is the appropriate table if the
					 life tenant is a female person. The user of the tables should exercise care to
					 refer to the appropriate table in each case.
(3) Multiply the appraised value of the
				  property by the life estate factor obtained pursuant to step (B). The product
				  will be the present value of the life estate at the time of the gift.
The provisions of subdivision (a) may be illustrated by the
					 following example:
EXAMPLE (1).
A gives the annual income from $100,000 to B for life, with
					 remainder over to C. B, a male, at the time of the gift is 40 years of age.
					 Table A(1) indicates that the life estate factor is .78923. The present value
					 of B's life estate as of the date of the gift is $78,923 ($100,000 x
					 .78923).
EXAMPLE (2).
A gives the annual income from $100,000 to D for life, with
					 remainder over to E. D, a female, at the time of the gift is 40 years of age.
					 Table A(2) indicates that the life factor is .84281. The present value of D's
					 life estate as of the date of the gift is $84,281 ($100,000 x
					 .84281).
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 5 - Valuation › Section 15552.3 - Life Estate, Successive Life Estate and Remainder

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
If income or an estate is given to one person for his use
					 or enjoyment during his life and upon death of that life tenant to another
					 person for the latter's use or enjoyment for life, and upon death of the latter
					 life tenant the remainder is given to a third person, the present values of the
					 respective interests of the three persons as of the date of the gift are
					 computed as follows:
(a) Determine in
				  accordance with Section
				  15552.1
				  the present value of the primary life tenant's life estate.
(b) Determine in accordance with Section
				  15552.1 the present value of the
				  secondary life tenant's single life estate as though he or she were the only
				  life tenant.
(c) The present value
				  of the secondary life tenant's successive life estate in the property as of the
				  date of the gift is determined by subtracting the present value of the primary
				  life tenant's life estate, as computed pursuant to step (a), from the secondary
				  life tenant's single life estate, as computed pursuant to step (b).
(d) The present value or worth of the
				  remainder interest in the property is determined simply by subtracting the
				  present value of the secondary life tenant's single life estate, as obtained
				  pursuant to step (b), from the appraised value of the property.
The provisions of this regulation may be illustrated by the
					 following example:
EXAMPLE.
Donor gives the annual income from $300,000 in trust to A,
					 a female, for life. Upon the death of A the annual income is payable to B, a
					 male, for life, and upon B's death the remainder payable to C. At the date of
					 gift, the ages of A and B, respectively, are 66 and 42. Table A(2) of Section
					 15552.8 indicates the life estate
					 factor in column 3 for a female age 66 is .54211. The present value of A's life
					 estate, as of the date of the gift, is $162,633 ($300,000 x .54211). Table A(1)
					 indicates the life estate factor for a male age 42 is .76967. The present value
					 of B's single life estate as of the date of the gift is $230,901 ($300,000 x
					 .76967). The present value of B's successive life estate as of the date of the
					 gift is $68,268 ($230,901 - $162,633). The present value of C's remainder
					 interest in the property as of the date of gift is $69,099 ($300,000 -
					 $230,901).
NOTE: Reference: Section
					 15552, 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 15552.4 - Estates, Income and Annuities for Period of Years

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) The present value of an estate in
				  property, the income from which is to be paid annually in an unfixed amount for
				  a term of years is computed as follows:
(1)
				  Consult Table B of Section
				  15552.8,
				  and ascertain therefrom the income factor for a term of years in column 3
				  opposite the figure in column 1 representing the number of years for which the
				  income is to continue.
(2) Multiply
				  the appraised value of the property by the income factor obtained pursuant to
				  step (1), which will give the present value of the estate for the term of years
				  as of the date of the gift.
(3)
				  Present worth of the remainder interest in the property is determined simply by
				  subtracting the present value of the estate for the term of years, as
				  determined pursuant to step (2), from the appraised value of the property.
The provisions of this subdivision may be illustrated by
					 the following example:
EXAMPLE.
Donor gives to A the possession, use and enjoyment of real
					 property for seven years. At the end of the seventh year, the property is to be
					 transferred to B. At the date of gift, A is 60 years of age and the real
					 property is appraised at $50,000. By reference to Table B, the income factor
					 for a term of years in column 3 opposite seven in column 1, representing the
					 number of years for which the income is to continue, is found to be .334943.
					 The present value of A's estate for the seven years is $16,747 ($50,000 x
					 .334943). The present worth of B's remainder interest in the property as of the
					 date of gift is $33,253 ($50,000 - $16,747).
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 5 - Valuation › Section 15552.5 - Deferred Gift

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Gift
				  Payable at Death of Person Other Than Donee.
If a gift is payable to a donee at the death of another
					 person, the present value of the gift is computed as follows:
(1) Determine the age of the person at whose
				  death the gift is payable as of his birthday nearest the date of the
				  gift.
(2) Consult Table A(1) or
				  Table A(2), whichever is appropriate, in Section
				  15552.8,
				  and ascertain therefrom the remainder factor of $1 due at the death of a person
				  of the same age as a person at whose death the gift is payable.
(3) Multiply the amount of the gift by the
				  remainder factor determined pursuant to step (2). The product will represent
				  the present worth of the gift.
The provisions of subdivision (a) may be illustrated by the
					 following example:
EXAMPLE.
Donor gives to A, to be paid at the death of X, a female,
					 property having a value of $60,000 at the date of gift. At the date of gift, X
					 is 70 years of age. By consulting Table A(2), the remainder factor in column 4
					 opposite 70, the number representing X's age, is .52460. This remainder factor
					 multiplied by the appraised value of the property ($60,000) results in a
					 product of $31,476, the present worth of the gift to
					 A.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 5 - Valuation › Section 15552.6 - Present Value of Annuity Exceeding Value of Annuity Fund

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Where the present value of an annuity actually exceeds the
					 amount of the property or fund out of which the annuity is to be paid the
					 present value of the annuity is the amount of the property or fund. This
					 regulation may be illustrated by the following example:
EXAMPLE.
A gives to B, a female, a life annuity of $5,000 per year,
					 payable out of a fund totaling $35,000. B is 65 years of age at the date of
					 gift. Computed in accordance with Section
					 15552.1,
					 the present value of an annuity of $5,000 per year for the life of a female of
					 the age of 65 is $46,503 ($5,000 x 9.3005 = $46,503). Since this exceeds the
					 annuity fund of $35,000, the latter figure will represent the present value of
					 B's annuity.
NOTE: Reference: Section
					 15552, 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 15552.7 - Remainder

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The present worth of a remainder is obtained by computing
					 the present worth of the precedent estate or estates and subtracting the amount
					 thereof from the total value of the property involved. The difference will
					 represent the present worth of the remainder.
The present worth of a remainder interest after a life
					 estate may also be obtained by multiplying the appraised value of the subject
					 property by the remainder factor in Table A(1) or Table A(2), whichever is
					 appropriate, of Section
					 15552.8
					 opposite the age of the person possessing a precedent estate. This regulation
					 may be illustrated by the following examples:
EXAMPLE.
A gives the annual income from $100,000 to B for life with
					 remainder over to C. B, a male, at the time of gift, is 40 years of age. By an
					 application of the method set forth in Section
					 15552.1(a) for
					 determining the present value of a life estate, B's life interest is found to
					 be $78,923. This latter sum subtracted from $100,000 results in a difference of
					 $21,077, the present value of C's remainder.
EXAMPLE.
Using the same facts as set forth in example immediately
					 above, the remainder factor for a male 40 years of age (the age of the life
					 tenant) is .21077. The present value of C's remainder interest is $21,077
					 ($100,000 x .21077).
NOTE: Reference: Section
					 15552, 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 15556 - Contingent Encumbrances and Contingencies

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
In the valuation of any property in which a donee is given
					 a present right of enjoyment or possession, no allowance will be made on
					 account of any contingent encumbrance on the property, nor on account of any
					 contingency upon the happening of which the donee's interest might, in whole or
					 in part, be abridged or diminished. If, however, the encumbrance or contingency
					 should become effective after the donee has become possessed, or has entered
					 upon the enjoyment of, the property, and a gift tax has been paid, a refund of
					 tax will be made if an application is filed within six months after the taking
					 effect of the encumbrance or contingency, (see Revenue and Taxation Code
					 Section
					 16223).
					 The amount of the refund will be the difference between the tax paid on the
					 value of the property without allowance for the encumbrance or contingency, and
					 that which would have been paid on a valuation of the donee's actual interest
					 in the property after the taking effect of the encumbrance or
					 contingency.
NOTE: Reference: Section
					 15556,
					 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 15558 - Purchase of Single Payment Contract for Another

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
If an individual purchases from a life insurance or other
					 authorized company as a gift for the benefit of another a single payment life
					 insurance contract or contract for the payment of an annuity, the value of the
					 gift is the cost of the contract, i.e., the amount of the single
					 payment.
NOTE: Reference: Section
					 15558,
					 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 15558.1 - Assignment of Annuity Contract

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
If an individual who has purchased an annuity contract from
					 a life insurance or other authorized company, by the terms of which the company
					 is to pay him periodically a sum of money for the balance of his life, makes a
					 gratuitous and irrevocable assignment of the contract, the value of the gift is
					 the amount which the company would charge for an annuity contract, providing
					 for the payment of the annuity specified in the contract assigned, for the life
					 of a person of the age of the donor at the date of the gift. This amount will
					 be approximately equal to the total amount which the donor has paid to the
					 company under the contract, plus any interest earned thereon, less the amount
					 of any payments previously made by the company to the donor.
NOTE: Reference: Section
					 15558,
					 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 15558.2 - Assignment, or Designation of Beneficiary, of Life Insurance Contract

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
If an individual makes an irrevocable and gratuitous
					 assignment, or designation of a beneficiary, of a fully or partially paid-up
					 life insurance policy issued on his life, the value of the gift is the cost of
					 replacing or reproducing the policy at the date of the gift.
NOTE: Reference: Section
					 15558,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 6 - Donor's Return › Section 15651 - Persons Required to File

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				  Resident Donors.
A gift tax return must be filed on form GT-1 by any
					 individual resident of California who makes a gift to any one donee of
					 property, other than a future interest therein, exceeding in value the amount
					 of the annual exemption ($3,000); or, regardless of value, makes a gift of a
					 future interest in property to any one donee not entitled to the annual
					 exemption.
(b) Nonresident
				  Donors.
A gift tax return must be filed on form GT-1 by any
					 nonresident of California who makes a gift of tangible personal property
					 located in California or real property situate in California, and any resident
					 of a country other than the United States who makes a gift of any property,
					 tangible or intangible, located in California, under the conditions specified
					 in paragraph (a).
(c)
				  Several Gifts as One Transaction.
A return must be filed in any case when gifts of property
					 of less than $3,000 in value, but in the aggregate exceeding such sum, are made
					 to each of several persons as part of a transaction under which each donee is
					 to transfer the property received by him to an ultimate donee. (See Revenue and
					 Taxation Code Sections
					 15421
					 through
					 15451).
					 A case of this kind is one where A makes gifts of $3,000 each to B, C, D and E
					 pursuant to an agreement that they, in turn, will transfer the property given
					 them to G.
(d) Irrevocable
				  Trust.
A return must be filed in any case where transfers of
					 property, regardless of value, otherwise subject to California gift tax is made
					 to the trustee of an irrevocable trust.
(e) Exempt Transfers.
A return is required to be filed by a donor in accordance
					 with this regulation even though a tax may not be payable by him because of the
					 specific, charitable or intangible exemption provided in Revenue and Taxation
					 Code Sections
					 15421
					 through
					 15451.
NOTE: Reference: Section
					 15651,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 6 - Donor's Return › Section 15651.1 - NO Joint Filing

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
When two or more donors own property in common and make a
					 gift of the common property to the same donee or donees, each donor is required
					 to file a return reporting the gift of his proportionate interest in the common
					 property. Joint filing is not permitted even though the donors are husband and
					 wife making a gift of community property.
NOTE: Reference: Section
					 15651,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 6 - Donor's Return › Section 15651.2 - Time and Place of Filing Return

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The donor's gift tax return must be filed with the
					 Inheritance and Gift Tax Division of the State Controller's office at
					 Sacramento on or before the 15th day of the second month following the close of
					 the calendar quarter in which the gift was made. That is, May 15 for gifts made
					 January 1 to March 31, August 15 for gifts made April 1 to June 30, November 15
					 for gifts made July 1 to September 30, and February 15 for gifts made October 1
					 to December 31.
The return cannot be filed prior to the close of the
					 calendar quarter in which the gift was made unless the return is for a deceased
					 donor, except where special permission is granted by the State
					 Controller.
When the date for the filing of the return falls on a legal
					 holiday, the filing date will be the day next following which is not a legal
					 holiday.
A duly executed return placed in an envelope which is
					 properly addressed to the Inheritance and Gift Tax Division of the State
					 Controller's office at Sacramento, with postage paid, and deposited in the
					 United States mail, will be considered as having been filed on or before the
					 filing date if the envelope is postmarked prior to midnight of the due date for
					 filing the return even though the return is not actually received until a
					 subsequent date.
Whenever in his opinion good cause (such as illness or
					 absence from State, place of business, or place where records are kept) exists
					 therefor, the State Controller may extend for a period not to exceed six
					 months, the time for filing the return. No extension will be granted until
					 there is filed with the Controller either before or after the date for the
					 filing of the return a verified application setting forth the reason or reasons
					 necessitating the extension.
NOTE: Reference: Section
					 15651,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 6 - Donor's Return › Section 15653 - Death or Incompetency of Donor

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
If a donor dies before filing his return, and an executor
					 of his will or an administrator of his estate has been appointed, the executor
					 or the administrator must file the return if he has actual knowledge of the
					 gift. If a donor becomes legally incompetent before filing his return, and a
					 guardian of his estate or person has been appointed, the guardian must file the
					 return if he has actual knowledge of the gift.
NOTE: Reference: Section
					 15653,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 6 - Donor's Return › Section 15653.1 - Return by Agent

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A return made by a donor's agent is not sufficient unless
					 the donor is unable to make the return himself within the required time by
					 reason of illness or absence from the State. Mere convenience is not sufficient
					 reason for authorizing an agent to make the return. If by reason of illness or
					 absence from the State a return is made by an agent, such return must be
					 ratified within a reasonable time by the donor. The ratification must be in the
					 form of an affidavit, or declaration executed under penalty of perjury, filed
					 with the State Controller, and must specifically state that the return made by
					 the agent has been carefully examined and that the affiant ratifies the return
					 as his own.
NOTE: Reference: Section
					 15653,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 6 - Donor's Return › Section 15654 - Failure to Make Return, False or Fraudulent Return

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
If no return, an incomplete return, or a false or
					 fraudulent return is made, the State Controller will make a return for the
					 donor on the basis of such information as he may possess or obtain.
Penalties will be imposed for any failure to make a return,
					 for an incomplete return and for a false or fraudulent return. These are
					 specified in Revenue and Taxation Code Sections
					 15681
					 through
					 15685.
					 (See also Section
					 15681).
NOTE: Reference: Section
					 15654,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 6 - Donor's Return › Section 15656 - Form of Return

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The donor's gift tax return must be made on Form GT-1,
					 copies of which may be obtained from the Inheritance Tax Division of the State
					 Controller's office in Los Angeles, Sacramento, or San Francisco. The return
					 need not be made in duplicate.
Form GT-1 consists of four schedules, A, B, C and D. A
					 separate Schedule D for each additional donee must be filed with the form
					 GT-1.
The donor must list on the return all gifts as to which a
					 return is required to be filed (see Section
					 15651) made by him during the
					 calendar quarter for which the return is filed.
The return must set forth the market value of all gifts not
					 made in money, including gifts resulting from sales and exchanges of property
					 made for less than an adequate and full consideration in money or money's
					 worth, (see Section
					 15106). In the latter case the
					 market value of the property sold or exchanged and that of the consideration
					 received by the donor must be stated.
Any exemption claimed except the specific exemption must be
					 fully set forth in the return. In this connection attention is directed to
					 Schedule A in which exempt charitable gifts (see Section
					 15441
					 and Revenue and Taxation Code Sections
					 15441 and
					 15442)
					 should be entered as should also any gift which the taxpayer contends is of a
					 type not subject to the Gift Tax Law other than gifts which are exempt by
					 reason of their amount being less than the annual or specific
					 exemptions.
All documents and vouchers used in preparing the return
					 should be retained by the donor so as to be available by the State Controller
					 whenever required. Copies of all documents required by the instructions printed
					 on Form GT-1 and the Instructions for Filing Your California Quarterly Gift Tax
					 Return, and of any documents which the donor may desire to submit, should be
					 filed with the return.
The tax, if any, for the calendar quarter for which the
					 return is filed may be computed and entered in the space provided on the first
					 page of the return.
In preparing any return the instructions printed on Form
					 GT-1 and the Instructions for Filing Your California Quarterly Gift Tax Return
					 should be carefully read and followed.
NOTE: Reference: Section
					 15656,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 6 - Donor's Return › Section 15656.1 - Description of Property Listed on Return

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
In general, in listing upon the return the property
					 comprising gifts made during a calendar quarter, the description thereof should
					 be such that the property may be readily identified.
(a) Real Property.
If the gift consists of real property or any interest
					 therein, set forth:
(1) A description
				  of the property sufficient to identify it.
(2) The name of the county in which the
				  property is located.
(3) If located
				  in a city, the place where located by street and number.
(4) If improved, a short statement of the
				  character of the improvements.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 6 - Donor's Return › Section 15656.2 - Encumbrances and Deductions from Market Value

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
If a lien (mortgage, trust deed, pledge, etc.) or other
					 encumbrance exists on any property an interest in which is transferred, only
					 the proper proportion of the encumbrance may be deducted from the value of the
					 interest in determining the net market value of the property transferred. A
					 description of a lien or other encumbrance on property transferred should
					 include the following:
(a) Nature of
				  lien or encumbrance.
(b) Amount
				  payable at date of gift.
(c) Name
				  of mortgagee, beneficiary, pledgee, or other person in whose favor the lien or
				  encumbrance exists.
There may also be deducted from the market value of the
					 property any consideration in money's worth, but evidence of such consideration
					 must be submitted.
NOTE: Reference: Section
					 15656,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 6 - Donor's Return › Section 15656.3 - Transfers of Community Property or Quasi-Community Property

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a) Community Property Transferred to Third
				  Person.
In returning a gift of community property to a third
					 person, the total market value of the property at the date of gift should be
					 stated. (See also Section
					 15656.6).
(b) Quasi-Community Property Transferred to
				  Spouse or Third Person.
In returning a gift of quasi-community property to one of
					 the spouses or to a third person, the total market value of the property at the
					 date of the gift should be stated.
NOTE: Reference: Section
					 15656, Revenue and Taxation
					 Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 6 - Donor's Return › Section 15656.4 - Separate Property Transferred into Community

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
In returning a gift to a spouse effected by the transfer or
					 conversion of his or her spouse's separate property into their community, the
					 total market value of the separate property at the date of the gift should be
					 stated. (See also Section
					 15551.6).
NOTE: Reference: Section
					 15656,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 6 - Donor's Return › Section 15656.5 - Donor's Records

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Every donor should keep such books and records as may be
					 necessary to establish the total amount of his gifts and other information
					 required to be shown in his gift tax return. (See also Section
					 15656).
NOTE: Reference: Section
					 15656, Revenue and Taxation
					 Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 6 - Donor's Return › Section 15656.6 - Supplemental Documents

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
(a)
				  Inactive Stock.
In the case of a gift of listed inactive stock, of unlisted
					 stock not actively traded in, or of stock of a close corporation, balance
					 sheets of the issuing corporation as of a date as near to the date of the gift
					 as is practicable, and detailed profit and loss statements of the corporation
					 for each of the five years immediately preceding the date of the gift, must be
					 filed with the return. Copies of balance sheets and statements already prepared
					 by the company's accountant should be submitted. The number of shares
					 outstanding and the nature of the business in which the company is engaged must
					 be shown.
(b) Declaration of
				  Trust.
If a gift was made by means of a declaration of trust, a
					 copy of the trust instrument must be submitted with the
					 return.
(c) Life Insurance.
For every policy of life insurance listed on the return the
					 donor must procure a statement from the insurer on Form GT-4, Life Insurance
					 Statement, in accordance with the instructions printed thereon, and file it
					 with the Controller. If specifically requested by the Controller, the insurance
					 company must file this statement directly with the Controller.
(d) Real Property.
Proof of value of real property is required in all cases.
					 The Controller will generally consider the following documents adequate proof
					 of value:
(1) An appraisal made as of
				  the date of gift by an acting inheritance tax referee of the county in which
				  the property is situate.
(2) If an
				  appraisal has been made as of a date reasonably close to the date of gift by an
				  inheritance tax referee in a probate or other proceeding, a statement to that
				  effect describing the proceeding with sufficient clarity to enable the
				  Controller to locate the records pertaining thereto.
(3) If the property was subject to a bona
				  fide sale at a date reasonably close to the date of gift, a statement giving
				  the date of sale, sales price, names of seller and buyer, their relationship to
				  each other, and any other evidence available showing that the sale was a bona
				  fide "arm's-length" transaction.
If proof of value is not given by any of the above methods,
					 the Controller will require filing of supplemental property description forms,
					 including the form GT-20, Substantiation of Value of Real Property.
The local assessed value of real property should not be
					 returned as the value of the property unless evidence is submitted that such
					 value in fact represents the actual market value of the property as of the date
					 of the gift.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 6.1 - Donee's or Trustee's Return › Section 15671 - Donee's Return

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
Normally, the donee is not required to file a gift tax
					 return, provided a return is properly filed by the donor. However, the donee is
					 secondarily liable for payment of gift tax due. (See Revenue and Taxation Code
					 Section
					 15901).
					 Therefore, if for any reason the donor does not file a timely return reporting
					 all transfers subject to the gift tax, the donee should file a return reporting
					 such gifts to him.
In addition, the Controller may, in any case, require that
					 gift tax returns be filed by the donee.
Insofar as they are pertinent, the regulations applicable
					 to a donor's return apply also to a donee's return.
NOTE: Reference: Section
					 15671,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 6.1 - Donee's or Trustee's Return › Section 15672 - Trustee's Return

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A trustee to whom is irrevocably transferred in any
					 calendar quarter property by gift for which, as set forth in Section
					 15651, the donor is required to
					 file a return, must, if he has actual knowledge of the fact that the
					 transaction constitutes a gift, either execute and file a return as to the
					 property on Form GT-2 or join with the donor in the execution and filing of the
					 donor's gift tax return in respect to the property.
A trustee of a revocable trust need not report the creation
					 of the trust. However, if after the creation of such a trust the donor makes
					 any gift of the corpus, or the income is paid over to any person other than the
					 donor, or the donor relinquishes or terminates his power of revocation, the
					 trustee must file a return as to the same with the State Controller. (See
					 Revenue and Taxation Code Section
					 15105).
Insofar as they are pertinent, the provisions of Section
					 15671 applicable to a donee's
					 return apply also to a return filed by a trustee on Form GT-2.
NOTE: Reference: Section
					 15672,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 6.2 - Donors and Donees in Armed Forces › Section 15675 - Soldiers' and Sailors' Relief

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
A donor or donee who was or is a member of the armed forces
					 of the United States, or of any auxiliary branch thereof, or of the merchant
					 marine, who is serving or has served as such member beyond the continental
					 United States, may apply to the Controller for an extension of time within
					 which to file a return, or for the payment of the tax, or for compliance with
					 any other provisions of the Gift Tax Law, and to be relieved from any penalty
					 or the payment of interest as otherwise provided by law. Such application must
					 be supported by the affidavit of the donor or donee, which shall state the date
					 such service outside the Continental United States began, and the date of
					 return thereto, and the date of discharge or release from active
					 service.
No extension of time shall be granted beyond 180 days after
					 such release or discharge, and unless application therefor is filed with the
					 Controller within 180 days after the donor or donee's release or discharge from
					 active service.
NOTE: Reference: Section
					 15675,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 6.3 - Penalties › Section 15681 - Additions to Tax for Donor's Failure to File or Complete Return

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
If a donor's return is not filed on or before the date on
					 which it is required to be filed (see Section
					 15651.2
					 and Revenue and Taxation Code Sections
					 15651 and
					 15652),
					 or if a donor's return does not show every taxable transfer made during the
					 reporting period for which it is filed, a penalty is added to any tax due on
					 the transfers not returned in an amount equal to 5 percent of such tax. An
					 additional penalty of 25 percent of the amount of such tax is added thereto if
					 the failure to file the return or include any transfer therein was the result
					 of a fraudulent intent to evade the tax.
The penalties specified in this regulation are not only
					 added to the amount of tax due, but become a part of such tax for the purpose
					 of determining interest on delinquent tax payments. Any deficiency
					 determination issued (see Section
					 15801) will contain a statement of
					 the amount of penalties, if any, specified in this regulation for which the
					 taxpayer is liable.
If an extension of time for filing a return is granted (see
					 Section 15651.2 and Revenue and Taxation
					 Code Section
					 15652)
					 the penalties specified in this regulation will not be imposed unless the
					 taxpayer fails to file a return on or before the expiration of the period of
					 extension, or, having filed a return before such date, fails to report every
					 taxable transfer.
Even though an extension of time for filing a return is
					 granted, the tax becomes delinquent and subject to interest at 7 percent per
					 annum from the original due date until paid. The granting of an extension of
					 time operates to relieve the taxpayer from penalty for late filing of the
					 return but not from the payment of interest. (See Revenue and Taxation Code
					 Section
					 15962).
NOTE: Reference: Section
					 15681,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 7 - Determination of Tax › Section 15801 - Deficiency Determination, Generally

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
In the event the tax paid is less than the tax due, as
					 disclosed upon the Controller's examination of all information available to
					 him, the Controller shall issue a determination for the deficiency.
NOTE: Reference: Section
					 15801,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 7 - Determination of Tax › Section 15801.1 - Time for Determination, General

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
In a case not involving a false or fraudulent return or
					 failure to file a return, and where the return is filed within the time
					 specified by law, the Controller may issue the deficiency determination at any
					 time after the tax is due (i.e., the 15th day of the second month following the
					 close of the calendar quarter in which the gift is made), but no later than
					 four (4) years after the last day prescribed by law for filing the return;
					 provided, however, the Controller and the donor or other person liable for the
					 tax may agree in writing that the deficiency determination may be made after
					 the four-year period, in which case the determination shall be issued within
					 the period agreed upon.
Where the Controller and the donor or other person liable
					 for the tax agree in writing that the determination is to be made at some time
					 after the expiration of the four-year period, the parties may from time to time
					 agree to extend the time within which the determination may be issued.
NOTE: Reference: Section
					 15801,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 7 - Determination of Tax › Section 15802 - Time for Determination, False or Fraudulent Return or Unreported Gifts

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
There is no statutory period limiting the time within which
					 the Controller may issue a deficiency determination where a false or fraudulent
					 return is filed or where gifts are made for which no return is filed. In such a
					 case, the Controller may issue a deficiency determination at any time.
If a gift tax return is timely filed, but the return fails
					 to disclose all gifts made by the donor during the calendar quarter for which
					 the return is filed, the Controller may issue a deficiency determination for
					 the unreported gifts at any time, regardless of the reason for failure to
					 include the same in the return filed.
NOTE: Reference: Section
					 15802,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 7 - Determination of Tax › Section 15803 - Erroneous Determination, Time for Change

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
In any case in which a deficiency has been determined in an
					 erroneous amount, the Controller may, within three years after the erroneous
					 determination was made, set aside the determination or issue an amended
					 determination in the correct amount.
Even though an amended determination is issued, or
					 subsequent amended determinations are issued, any unpaid tax becomes delinquent
					 after the last date prescribed by law for filing the return reporting the gift
					 for which the determination is issued. (See Section
					 15905
					 and Revenue and Taxation Code Section
					 15905). See Section
					 15681 regarding penalties for
					 failure to file or for late filing.
NOTE: Reference: Section
					 15803,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 7 - Determination of Tax › Section 15804 - Notice of Determination

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
The Controller shall give notice of any deficiency
					 determined, together with any penalty incurred, by personal service or mailing
					 a copy of the Notice of Gift Tax Deficiency, form GT-30, to the person filing
					 the return at the address stated in the return.
If no return is filed, the Controller will mail the Notice
					 of Gift Tax Deficiency to the person or persons liable for the tax.
If advisable under the circumstances, the Controller may
					 also send copies of the Notice of Gift Tax Deficiency to persons other than
					 those liable for payment of the tax.
NOTE: Reference: Section
					 15804,
					 Revenue and Taxation Code.
California Code of Regulations › Title 18 - Public Revenues › Division 2.5 - State Controller › Chapter 2 - Gift Tax › Article 7 - Determination of Tax › Section 15807 - Amendment of Determinations, Prior Year Gifts

Current through Register 2024 Notice Reg. No. 28, July 12, 2024
When the Controller makes an original, amended or
					 supplemental determination of a deficiency for a calendar quarter which is
					 prior to calendar quarters for which the tax has previously become final, he
					 may concurrently therewith, notwithstanding other provisions of the Gift Tax
					 Law, determine the true amount of tax which would have been determined had all
					 the determinations been made in the sequence in which the gifts were made. This
					 regulation may be illustrated by the following example:
EXAMPLE.
A makes a gift of $20,000 to B, his adult daughter in
					 October, 1967, but fails to file a return. In 1968, A makes another gift to B
					 in the amount of $30,000 for which he files a timely return. A notice of
					 determination of the tax due in the amount of $680 for the 1968 gift is issued
					 in 1969, under the law then in effect, and the tax is paid.
$ 3,000
annual exemption
5,000
specific exemption
20,000
@ 3%
$600
2,000
@ 4%
80
$30,000
$680
The failure to report the 1967 gift is discovered in 1973,
					 after the determination issued in 1969 has become final. See Revenue and
					 Taxation Code Section
					 15803.
					 By reason of the 1967 gift, there is a deficiency for the 1968 gift, as well as
					 the deficiency for the unreported 1967 gift. Pursuant to the provisions of
					 Revenue and Taxation Code Section
					 15807,
					 a determination for the deficiency for the 1968 gift may nevertheless be
					 issued, in addition to the determination of deficiency for the 1967
					 gift.
The tax due for the several gifts is computed as
					 follows:
(1)
1967 gift:
(a)
Net taxable gift
							 ($20,000--$3,000)
$17,000
(b)
Specific exemption
							 5,000
5,000
(c)
Tax on balance
							 ($12,000 @ 3%)
360
(d)
Penalty (Section
							 15681)
18
(e)
Total tax plus
							 penalty, 1967 gift
378
(2)
1968 gift:
(a)
Total net tax
							 gifts
(1967: $20,000--$3,000
							 plus
1968:
							 $30,000--$3,000)
$44,000
(b)
Specific
							 exemption
5,000
(c)
Tax on total ($20,000
							 @ 3% plus
$19,000 @
							 4%)
1,360
(d)
Tax on prior year
							 gifts (1967 deficiency)
360
(e)
Tax on 1968
							 gift
1,000
(f)
Tax previously
							 paid
68
(g)
Deficiency, 1968
							 gift
320
In the case of the 1967 gift tax deficiency, the tax plus
					 penalty is subject to interest at the rate of 7 percent per annum from June 15,
					 1968 until paid. Interest at 7 percent per annum accrues on the 1968 tax
					 deficiency beginning 90 days after the date of the amended
					 determination.
NOTE: Reference: Section
					 15807,
					 Revenue and Taxation Code.