Cal. Revenue and Taxation Code - RTC § 24341. Section 24341.
“Net income” means the gross income, computed under Chapter 6 (commencing with Section 24271), less the deductions allowed under this article and Article 2 (commencing with Section 24401).
ARTICLE 1. Deductions [24341. - 24383.]
Cal. Revenue and Taxation Code - RTC 1.
in effectCal. Revenue and Taxation Code - RTC § 24343. Section 24343.
(a)
Section 162 of the Internal Revenue Code, relating to trade or business expenses, shall apply, except as otherwise provided.
(b)
For purposes of applying Section 162 of the Internal Revenue Code, any references to Section 170 of the Internal Revenue Code shall be modified to refer to Sections 24357 to 24359.1, inclusive, of this part.
(c)
(1)
The amendments made by Section 13601(a), (b), (c), and (d) of the Tax Cuts and Jobs Act (Public Law 115-97) to Section 162(m) of the Internal Revenue Code, relating to certain excessive employee remuneration, shall apply, except as otherwise provided.
(2)
The amendments made by Section 13601(e)(2) of the Tax Cuts and Jobs Act (Public Law 115-97), relating to exception for binding contracts, shall apply, and is modified by substituting “March 31, 2019” for “November 2, 2017.”
Cal. Revenue and Taxation Code - RTC § 24343.1. Section 24343.1.
(a)
The amendments made by Section 13531(a) of the Tax Cuts and Jobs Act (Public Law 115-97) to add Section 162(r) to the Internal Revenue Code, relating to the disallowance of FDIC premiums paid by certain large financial institutions, shall apply, except as otherwise provided.
(b)
For purposes of this section, Article 9 (commencing with Section 23361) of Chapter 2 of Part 11 shall not
apply.
Cal. Revenue and Taxation Code - RTC § 24343.2. Section 24343.2.
Whereas, the people of the State of California desire to promote and achieve tax equity and fairness among all the state’s citizens and further desire to conform to the public policy of nondiscrimination, the Legislature hereby enacts the following for these reasons and for no other purpose:
(a)
No deduction shall be allowed under Section 24343 for expenses incurred by a taxpayer with respect to expenditures made
at, or payments made to, a club which restricts membership or the use of its services or facilities on the basis of ancestry or any characteristic listed or defined in Section 11135 of the Government Code, except for genetic information.
(b)
A club described in subdivision (a) holding an alcoholic beverage license pursuant to Division 9 (commencing with Section 23000) of the Business and Professions Code, except a club holding an alcoholic beverage license pursuant to Section 23425 thereof, shall provide on each receipt furnished to a taxpayer a printed statement as follows:
“The expenditures covered by this receipt are nondeductible for state income tax purposes or franchise tax purposes.”
(c)
For purposes of this section:
(1)
“Expenses” means those expenses otherwise
deductible under Section 24343, except for subdivision (a), and includes, but is not limited to, club membership dues and assessments, food and beverage expenses, expenses for services furnished by the club, and reimbursements or salary adjustments to officers or employees for any of the preceding expenses.
(2)
“Club” means a club as defined in Division 9 (commencing with Section 23000) of the Business and Professions Code, except a club as defined in Section 23425 thereof.
Cal. Revenue and Taxation Code - RTC § 24343.3. Section 24343.3.
Any employer contribution to a medical savings account, as defined in Section 220 of the Internal Revenue Code, relating to medical savings accounts, if otherwise deductible under this part, shall be allowed only for the taxable year in which paid.
Cal. Revenue and Taxation Code - RTC § 24343.5. Section 24343.5.
(a)
In addition to the deduction allowed by Section 24343, a deduction shall be allowed to an employer as an ordinary and necessary expense paid or incurred during the taxable year in carrying on any trade or business for those expenses involved in any of the following ridesharing arrangements:
(1)
Subsidizing employees commuting in vanpools.
(2)
Subsidizing employees commuting in private commuter buses or
buspools.
(3)
Subsidizing monthly transit passes for its employees or for use by the employee’s dependents, except that no deduction shall be allowed for transit passes issued for the use of elementary and secondary school students.
(4)
Subsidizing employees commuting in subscription taxipools.
(5)
Subsidizing employees commuting in a carpool.
(6)
In the case of an employer who offers free parking to its employees, offering a cash equivalent to employees who do not require parking, including a parking cash-out program, as defined by subdivision (f) of Section 65088.1 of the Government Code.
(7)
Providing free or preferential parking to carpools, vanpools, or any other vehicle used in a
ridesharing arrangement.
(8)
Making facility improvements to encourage employees, for the purpose of commuting from their homes, to participate in ridesharing arrangements, to use bicycles, or to walk. These facility improvements may include, but are not limited to, any of the following: the construction of bus shelters; the installation of bicycle racks and other bicycle-related facilities, such as showers and locker rooms; and parking lot modifications to provide carpools, vanpools, or buspools with preferential treatment. The cost of these facility improvements shall be allowed as a depreciation deduction. Notwithstanding subdivision (c), the depreciation deduction shall be allowable over a 36-month period.
(9)
Providing company commuter van or bus service to its employees and to others for commuting from their homes, but not for transportation required as part of the
employer’s business activities, except as otherwise provided in this section. The capital costs of providing this service shall not be an eligible deduction under this section.
(10)
Providing to employees transportation services which are required as part of the employer’s business activities to the extent that the transportation would be provided by employees without reimbursement in the absence of an employer-sponsored ridesharing incentive program. The capital costs of providing this service shall not be an eligible deduction under this section.
(b)
For purposes of this section:
(1)
“Employer” means either of the following:
(A)
A taxpayer for whom services are performed by employees, except entities which are not subject to tax under this part.
(B)
A taxpayer which is a private or public educational institution which enrolls students at higher than the secondary level.
(2)
“Employee” means either of the following:
(A)
An individual who performs service for an employer for more than eight hours per week for remuneration.
(B)
Any commuting student, as defined in paragraph (3).
(3)
“Commuting student” means a registered full-time student at a college, university, or other postsecondary educational institution, who lives apart from the property which is designated as the “employment site” for the purpose of this section, and who travels between his or her residence and the designated employment site on a regular, though not necessarily
daily, basis.
(4)
“Employer-sponsored ridesharing incentive program” means a program undertaken by an employer either alone or in cooperation with other employers to encourage or provide, or both, fiscal other incentives to employees to make the home-to-work commute trip by any mode other than the single-occupant motor vehicle.
(5)
“Company commuter bus or van” means a highway vehicle which meets all of the following criteria:
(A)
Has at least seven or more persons commuting on a daily basis to and from work.
(B)
At least 50 percent of the mileage of which can be reasonably expected to be used for the purpose of transporting employees to and from work.
(C)
Is acquired by the taxpayer on
or after the date of enactment of this legislation.
(6)
“Vanpool” means seven or more persons commuting on a daily basis to and from work by means of a vehicle with a seating arrangement designed to carry 7 to 15 adult persons.
(7)
“Monthly transit pass” means any bulk purchase of transit rides that entitles the purchaser to 40 or more rides per month, whether at a discount rate or the base fare rate.
(8)
“Transit” means transportation service for use by the general public that utilizes buses, railcars, or ferries with a seating capacity of 16 or more persons.
(9)
“Subscription taxipool” means a type of service in which employers or groups of employees contract with a public or private taxi operator to provide daily commuter service for a group of
preassembled subscribers on a prepaid or daily-fare basis, following a relatively fixed route and schedule tailored to meet the needs of the subscribers.
(10)
“Ridesharing arrangement” means the transportation of persons in a motor vehicle where that transportation is incidental to another purpose of the driver. The term includes ridesharing arrangements known as carpools, vanpools, and buspools.
(11)
“Carpool” means two or more persons commuting on a daily basis to and from work by means of a vehicle with a seating arrangement designed to carry less than seven adults, including the driver.
(12)
“Buspool” means 16 or more persons commuting on a daily basis to and from work by means of a vehicle with a seating arrangement designed to carry more than 15 adult passengers.
(13)
“Private commuter bus” means a highway vehicle which meets all of the following criteria:
(A)
Has a seating capacity of at least seven adults, including the driver.
(B)
At least 50 percent of the mileage of which can be reasonably expected to be used for the purpose of transporting employees to and from work.
(C)
Is acquired by the taxpayer on or after the date of enactment of this section.
(D)
With respect to which the taxpayer makes an election under this paragraph on its return for the taxable year in which the vehicle is placed in service.
Cal. Revenue and Taxation Code - RTC § 24343.7. Section 24343.7.
Section 162(k)(2)(A)(ii) of the Internal Revenue Code shall not apply.
Cal. Revenue and Taxation Code - RTC § 24343.8. Section 24343.8.
For taxable years beginning on or after January 1, 2014, a deduction shall not be allowed for the amount of any fine or penalty paid or incurred by an owner of all or part of a professional sports franchise, where that fine or penalty is assessed or imposed by the professional sports league that includes that franchise.
Cal. Revenue and Taxation Code - RTC § 24344. Section 24344.
(a)
Section 163 of the Internal Revenue Code, relating to interest, shall apply, except as otherwise provided.
(b)
If income of the taxpayer which is derived from or attributable to sources within this state is determined pursuant to Section 25101 or 25110, the interest deductible shall be an amount equal to interest income subject to apportionment by formula, plus the amount, if any, by which the balance of interest expense exceeds interest and dividend income (except dividends deductible under Section 24402 and dividends subject to the deductions provided for in Section 24411 to the extent of those deductions) not subject to apportionment by
formula. Interest expense not included in the preceding sentence shall be directly offset against interest and dividend income (except dividends deductible under Section 24402 and dividends subject to the deductions provided for in Section 24411 to the extent of those deductions) not subject to apportionment by formula.
(c)
(1)
Notwithstanding subdivision (b) and subject to paragraph (2), interest expense allowable under Section 163 of the Internal Revenue Code that is incurred for purposes of foreign investments may be offset against dividends deductible under Section 24411.
(2)
For taxable years beginning on or after January 1, 1997, the amount of interest computed pursuant to paragraph (1) shall be multiplied by the same percentage used to determine the dividend
deduction under Section 24411 to determine that amount of interest that may be offset as provided in paragraph (1).
(d)
Section 7210(b) of Public Law 101-239, relating to the effective date for limitation on deduction for certain interest paid to a related person, shall apply.
(e)
Section 163(j) of the Internal Revenue Code, relating to the limitation on business interest, shall not apply.
Cal. Revenue and Taxation Code - RTC § 24344.5. Section 24344.5.
(a)
A deduction, determined in accordance with Section 163(e) of the Internal Revenue Code, shall be allowed to the issuer of an original issue discount bond.
(b)
For taxable years beginning on or after January 1, 1987, and before the taxable year in which the debt obligation matures or is sold, exchanged, or otherwise disposed, the amount deductible under this part shall be the same as the amount deductible on the federal tax return.
(c)
The difference between the amount deductible on the federal tax return and the amount allowable under this part, with respect to obligations issued after December 31, 1984, for taxable years beginning before January 1, 1987, shall be allowed as a deduction in the taxable year in which the debt obligation matures or is sold, exchanged, or otherwise disposed.
(d)
The provisions of Section 7202(c) of Public Law 101-239, relating to the effective date for treatment of certain high yield original issue discount obligations, shall apply.
Cal. Revenue and Taxation Code - RTC § 24344.7. Section 24344.7.
The amendments to Section 163 of the Internal Revenue Code made by Section 13228 of the Revenue Reconciliation Act of 1993 (P.L. 103-66), relating to modification to limitation on deduction for certain interest, shall apply to taxable years beginning on or after January 1, 1996.
Cal. Revenue and Taxation Code - RTC § 24345. Section 24345.
A deduction shall be allowed for taxes or licenses paid or accrued during the taxable year, except:
(a)
Taxes paid to the state under this part.
(b)
Taxes on or according to or measured by income or profits paid or accrued within the taxable year imposed by the authority of any of the following:
(1)
The Government of the United States or any foreign country.
(2)
Any state, territory, county, school district, municipality, or other taxing subdivision of any state or territory.
(c)
Taxes assessed against local benefits of a kind tending to increase the value of the property assessed, but this does not exclude the allowance as a deduction of so much of the taxes assessed against local benefits as is properly allocable to maintenance or interest charges. Nor does this exclude the allowance of any irrigation or other water district taxes or assessments which are levied for the payment of the principal of any improvement or other bonds for which a general assessment on all lands within the district is levied as distinguished from a special assessment levied on part of the area within the district.
(d)
Federal stamp taxes (not described in subdivision (b) or (c)); but this
subdivision shall not prevent such taxes from being deducted under Section 24343 (relating to trade or business expenses).
(e)
State and local general sales or use taxes. However, there shall be allowed as a deduction, state and local sales or use taxes which are paid or accrued within the taxable year in carrying on a trade or business or an activity described in Section 212 of the Internal Revenue Code (relating to expenses for production of income). Notwithstanding the preceding sentence, any sales or use tax (except where a tax credit is claimed under Section 23612.2) which is paid or accrued by the taxpayer in connection with an acquisition or disposition of property shall be treated as part of the cost of the acquired property or, in the case of a disposition, as a reduction in the amount realized on the disposition.
(f)
For purposes of subdivision (b), “taxes on or
according to or measure by income” shall include any taxes imposed on a dividend that is eliminated from the income of the recipient under Section 25106.
Cal. Revenue and Taxation Code - RTC § 24345.5. Section 24345.5.
A deduction shall not be allowed for the fee imposed by subsection (a) of Section 9008 of the Patient Protection and Affordable Care Act (Public Law 111-148).
Cal. Revenue and Taxation Code - RTC § 24345.6. Section 24345.6.
A deduction shall not be allowed for the excise tax imposed by Section 4501 of the Internal Revenue Code, relating to repurchase of corporate stock.
Cal. Revenue and Taxation Code - RTC § 24345.7. Section 24345.7.
A deduction shall not be allowed for the excise tax imposed by Section 5000D of the Internal Revenue Code, relating to designated drugs during noncompliance periods.
Cal. Revenue and Taxation Code - RTC § 24346. Section 24346.
(a)
For purposes of subdivision (a) of Section 24345, if real property is sold during any real property tax year, then—
(1)
So much of the real property tax as is properly allocable to that part of the year which ends on the day before the date of the sale shall be treated as a tax imposed on the seller; and
(2)
So much of that tax as is properly allocable to that part of the year which begins on the date of the sale shall be treated as a tax imposed on the purchaser.
(b)
(1)
In the case of any sale of real property; if—
(A)
A corporation may not, by reason of its method of accounting, deduct any amount for taxes unless paid; and
(B)
The other party to the sale is (under the law imposing the real property tax) liable for the real property tax for the real property tax year;
then for purposes of subdivision (a) of Section 24345 the corporation shall be treated as having paid, on the date of the
sale, so much of the tax as, under subdivision (a), is treated as imposed on the corporation. For purposes of the preceding sentence, if neither party is liable for the tax, then the party holding the property at the time the tax becomes a lien on the property shall be considered liable for the real property tax for the real property tax year.
(2)
Subdivision (a) shall apply to taxable years beginning after December 31, 1960, but only in the case of sales after December 31, 1960.
(3)
Subdivision (a) shall not apply to any real property tax, to the extent that the tax was allowable as a deduction under the Bank and Corporation Tax Law of 1954 to the seller for a taxable year which began before January 1, 1961.
(4)
In the case of any sale of real property, if the corporation’s net income for the taxable year during
which the sale occurs is computed under an accrual method of accounting, and if no election under subdivision (b) of Section 24681 (relating to the accrual of real property taxes) applies, then, for purposes of subdivision (a) of Section 24345, that portion of the tax that—
(A)
Is treated, under subdivision (a), as imposed on the corporation; and
(B)
May not, by reason of the corporation’s method of accounting, be deducted by the corporation for any taxable year,
shall be treated as having accrued on the date of the sale.
Cal. Revenue and Taxation Code - RTC § 24347. Section 24347.
For taxable years beginning on or after January 1, 1990, all of the following shall apply:
(a)
Section 165 of the Internal Revenue Code, relating to losses.
(b)
Section 166 of the Internal Revenue Code, relating to bad debts, except that the deduction of a savings and loan association, bank or financial corporation shall be determined under Section 24348.
(c)
(1)
Section 582 of the Internal Revenue Code, relating to bad debts, losses, and gains with respect to securities held by financial institutions.
(2)
Section 582(c)(2)(C) of the Internal Revenue Code, relating to limitations on foreign banks, but only to foreign corporations that have in effect for the taxable year a water’s edge election under Section 25110.
Cal. Revenue and Taxation Code - RTC § 24347.4. Section 24347.4.
(a)
Section 165(i) of the Internal Revenue Code, relating to disaster losses, is modified to additionally provide that an appraisal for the purpose of obtaining a loan of federal funds or a loan guarantee from the federal government as a result of a presidentially declared disaster (as defined by Section 1033(h)(3) of the Internal Revenue Code) may be used to establish the amount of any loss described in Section 165(i)(1) or (2) of the Internal Revenue Code to the extent provided in regulations or other guidance of the Secretary of the
Treasury under Section 165(i)(4) of the Internal Revenue Code (as added by Section 912 of Public Law 105-34).
(b)
This section shall apply on and after August 5, 1997.
Cal. Revenue and Taxation Code - RTC § 24347.5. Section 24347.5.
(a)
An excess disaster loss, as defined in subdivision (c), shall be carried to other taxable years as provided in subdivision (b), with respect to losses resulting from any of the following disasters:
(1)
Forest fire or any other related casualty occurring in 1985 in California.
(2)
Storm, flooding, or any other related casualty
occurring in 1986 in California.
(3)
Any loss sustained during 1987 as a result of a forest fire or any other related casualty.
(4)
Earthquake, aftershock, or any other related casualty occurring in October 1987 in California.
(5)
Earthquake, aftershock, or any other related casualty occurring in October 1989 in California.
(6)
Any loss sustained during 1990 as a result of fire or any other related casualty in California.
(7)
Any loss sustained as a result of the Oakland/Berkeley Fire of 1991, or any other related casualty.
(8)
Any loss sustained as a result of storm, flooding, or any other related casualty occurring in
February 1992 in California.
(9)
Earthquake, aftershock, or any other related casualty occurring in April 1992 in the County of Humboldt.
(10)
Riots, arson, or any other related casualty occurring in April or May 1992 in California.
(11)
Any loss sustained as a result of the earthquakes or any other related casualty that occurred in the County of San Bernardino in June and July of 1992.
(12)
Any loss sustained as a result of the Fountain Fire that occurred in the County of Shasta, or as a result of either of the fires in the Counties of Calaveras and Trinity that occurred in August 1992, or any other related casualty.
(13)
Any loss sustained as a result of storm, flooding, or any other
related casualty that occurred in the Counties of Alpine, Contra Costa, Fresno, Humboldt, Imperial, Lassen, Los Angeles, Madera, Mendocino, Modoc, Monterey, Napa, Orange, Plumas, Riverside, San Bernardino, San Diego, Santa Barbara, Sierra, Siskiyou, Sonoma, Tehama, Trinity, and Tulare, and the City of Fillmore in January 1993.
(14)
Any loss sustained as a result of a fire that occurred in the Counties of Los Angeles, Orange, Riverside, San Bernardino, San Diego, and Ventura, during October or November of 1993, or any other related casualty.
(15)
Any loss sustained as a result of the earthquake, aftershocks, or any other related casualty that occurred in the Counties of Los Angeles, Orange, and Ventura on or after January 17, 1994.
(16)
Any loss sustained as a result of a fire that occurred in the County of San Luis
Obispo during August of 1994, or any other related casualty.
(17)
Any loss sustained as a result of the storms or flooding occurring in 1995, or any other related casualty, sustained in any county of this state subject to a disaster declaration with respect to the storms and flooding.
(18)
Any loss sustained as a result of the storms or flooding occurring in December 1996 or January 1997, or any related casualty, sustained in any county of this state subject to a disaster declaration with respect to the storms or flooding.
(19)
Any loss sustained as a result of the storms or flooding occurring in February 1998, or any related casualty, sustained in any county of this state subject to a disaster declaration with respect to the storms or flooding.
(20)
Any loss sustained as a result of a freeze occurring in the winter of 1998–99, or any related casualty, sustained in any county of this state subject to a disaster declaration with respect to the freeze.
(21)
Any loss sustained as a result of an earthquake occurring in September 2000, that was included in the Governor’s proclamation of a state of emergency for the County of Napa.
(22)
Any loss sustained as a result of the Middle River levee break in San Joaquin County occurring in June 2004.
(23)
Any losses sustained as a result of the fires that occurred in the Counties of Los Angeles, Riverside, San Bernardino, San Diego, and Ventura in October and November 2003, or as a result of floods, mudflows, and debris flows, directly related to fires.
(24)
Any losses sustained in the Counties of Santa Barbara and San Luis Obispo as a result of the San Simeon earthquake, aftershocks, and any other related casualties.
(25)
Any losses sustained as a result of the wildfires that occurred in Shasta County, commencing August 11, 2004, and any other related casualty.
(26)
Any loss sustained in the Counties of Kern, Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara, and Ventura as a result of the severe rainstorms, related flooding and slides, and any other related casualties, that occurred in December 2004, January 2005, February 2005, March 2005, or June 2005.
(27)
Any loss sustained in the Counties of Alameda, Alpine, Amador, Butte, Calaveras, Colusa, Contra Costa, Del Norte, El Dorado, Fresno, Humboldt, Kings, Lake, Lassen, Madera,
Marin, Mariposa, Mendocino, Merced, Monterey, Napa, Nevada, Placer, Plumas, Sacramento, San Joaquin, San Luis Obispo, San Mateo, Santa Cruz, Shasta, Sierra, Siskiyou, Solano, Sonoma, Stanislaus, Sutter, Trinity, Tulare, Tuolumne, Yolo, and Yuba as a result of the severe rainstorms, related flooding and slides, and any other related casualties, that occurred in December 2005, January 2006, March 2006, or April 2006.
(28)
Any loss sustained in the County of San Bernardino as a result of the wildfires that occurred in July 2006.
(29)
Any loss sustained in the Counties of Riverside and Ventura as a result of wildfires that occurred during the 2006 calendar year.
(30)
Any loss sustained in the Counties of El Dorado, Fresno, Imperial, Kern, Kings, Madera, Merced, Monterey, Riverside, San Bernardino, San Diego, San Luis
Obispo, Santa Barbara, Santa Clara, Stanislaus, Tulare, Ventura, and Yuba that were the subject of the Governor’s proclamations of a state of emergency for the severe freezing conditions that occurred in January 2007.
(31)
Any loss sustained in the County of El Dorado as a result of wildfires that occurred in June 2007.
(32)
Any loss sustained in the Counties of Santa Barbara and Ventura as a result of the Zaca Fire that occurred during the 2007 calendar year.
(33)
Any loss sustained in the County of Inyo as a result of wildfires that commenced in July 2007.
(34)
Any loss sustained in the Counties of Los Angeles, Orange, Riverside, San Bernardino, San Diego, Santa Barbara, and Ventura as a result of wildfires that occurred during the 2007 calendar year
that were the subject of the Governor’s disaster proclamations of September 15, 2007, and October 21, 2007.
(35)
Any loss sustained in the County of Riverside as a result of extremely strong and damaging winds that occurred in October 2007.
(36)
Any loss sustained in the Counties of Butte, Kern, Mariposa, Mendocino, Monterey, Plumas, Santa Clara, Santa Cruz, Shasta, and Trinity as a result of wildfires that occurred in May or June 2008 that were the subject of the Governor’s proclamations of a state of emergency.
(37)
Any loss sustained in the County of Santa Barbara as a result of wildfires that occurred in July 2008.
(38)
Any loss sustained in the County of Inyo as a result of the severe rainstorms, related flooding and landslides, and any other
related casualties, that occurred in July 2008.
(39)
Any loss sustained in the County of Humboldt as a result of wildfires that commenced in May 2008.
(40)
Any loss sustained in the County of Santa Barbara as a result of wildfires that commenced in November 2008.
(41)
Any loss sustained in the Counties of Los Angeles and Ventura as a result of wildfires that commenced in October 2008 or November 2008 that were the subject of the Governor’s proclamations of a state of emergency.
(42)
Any loss sustained in the Counties of Orange, Riverside, and San Bernardino as a result of wildfires that commenced in November 2008.
(43)
Any loss sustained in the County of Santa Barbara as a result of
wildfires that commenced in May 2009.
(b)
(1)
In the case of any loss allowed under Section 165 of the Internal Revenue Code, relating to losses, any excess disaster loss shall be carried forward to each of the five taxable years following the taxable year for which the loss is claimed. However, if there is any excess disaster loss remaining after the five-year period, then the applicable percentage, as set forth in paragraph (1) of subdivision (b) of Section 24416, of that excess disaster loss shall be carried forward to each of the next 10 taxable years.
(2)
The entire amount of any excess disaster loss as defined in subdivision (c) shall be carried to the earliest of the taxable years to which, by reason of subdivision (b), the loss may be carried. The portion of the loss which shall be carried to each of the other taxable years shall be the excess, if
any, of the amount of excess disaster loss over the sum of the net income for each of the prior taxable years to which that excess disaster loss is carried.
(c)
“Excess disaster loss” means a disaster loss computed pursuant to Section 165 of the Internal Revenue Code, which exceeds the net income of the year of loss or, if the election under Section 165(i) of the Internal Revenue Code is made, the net income of the year preceding the loss.
(d)
The provisions of this section and Section 165(i) of the Internal Revenue Code shall be applicable to any of the losses listed in subdivision (a) sustained in any county or city in this state which was proclaimed by the Governor to be in a state of disaster.
(e)
Any corporation subject to the provisions of Section 25101 or 25101.15 that has disaster losses pursuant to this
section, shall determine the excess disaster loss to be carried to other taxable years under the principles specified in Section 25108 relating to net operating losses.
(f)
Losses allowable under this section may not be taken into account in computing a net operating loss deduction under Section 172 of the Internal Revenue Code.
(g)
For losses described in paragraphs (15) to (43), inclusive, of subdivision (a), the election under Section 165(i) of the Internal Revenue Code may be made on a return or amended return filed on or before the due date of the return (determined with regard to extension) for the taxable year in which the disaster occurred.
Cal. Revenue and Taxation Code - RTC § 24347.6. Section 24347.6.
(a)
An excess disaster loss, as defined in subdivision (c), shall be carried to other taxable years as provided in subdivision (b), with respect to losses sustained in the County of Mendocino as a result of the tsunami that occurred in March 2011.
(b)
(1)
In the case of any loss allowed under Section 165 of the Internal Revenue Code, relating to losses, any excess
disaster loss shall be carried forward to each of the five taxable years following the taxable year for which the loss is claimed. However, if there is any excess disaster loss remaining after the five-year period, then the applicable percentage, as set forth in paragraph (1) of subdivision (b) of Section 24416, of that excess disaster loss shall be carried forward to each of the next 10 taxable years.
(2)
The entire amount of any excess disaster loss as defined in subdivision (c) shall be carried to the earliest of the taxable years to which, by reason of subdivision (b), the loss may be carried. The portion of the loss which shall be carried to each of the other taxable years shall be the excess, if any, of the amount of excess disaster loss over the sum of the net income for each of the prior taxable years to which that excess disaster loss is carried.
(c)
“Excess disaster
loss” means a disaster loss computed pursuant to Section 165 of the Internal Revenue Code, which exceeds the net income of the year of loss or, if the election under Section 165(i) of the Internal Revenue Code is made, the net income of the year preceding the loss.
(d)
This section and Section 165(i) of the Internal Revenue Code apply to any of the losses listed in subdivision (a) sustained in any county or city in this state which was proclaimed by the Governor to be in a state of disaster.
(e)
A corporation subject to Section 25101 or 25101.15 that has disaster losses pursuant to this section shall determine the excess disaster loss to be carried to other taxable years under the principles specified in Section 25108 relating to net operating losses.
(f)
Losses allowable under this section shall not be taken into
account in computing a net operating loss deduction under Section 172 of the Internal Revenue Code.
(g)
For losses described in subdivision (a), the election under Section 165(i) of the Internal Revenue Code may be made on a return or amended return filed on or before the due date of the return (determined with regard to extension) for the taxable year in which the disaster occurred.
Cal. Revenue and Taxation Code - RTC § 24347.7. Section 24347.7.
(a)
An excess disaster loss, as defined in subdivision (c), shall be carried to other taxable years as provided in subdivision (b), with respect to losses sustained in the County of Humboldt as a result of the earthquake that occurred in January 2010.
(b)
(1) In the case of any loss allowed under Section 165 of the Internal Revenue Code, relating to losses, any excess disaster loss shall be carried forward to each of the five taxable years following the taxable year for which the loss is claimed. However, if there is any excess disaster loss remaining after the five-year period, then the applicable percentage, as set forth in paragraph (1) of subdivision (b) of Section 24416, of that excess disaster loss shall be carried forward to each of the next 10 taxable years.
(2)
The entire amount of any excess disaster loss as defined in subdivision (c) shall be carried to the earliest of the taxable years to which, by reason of subdivision (b), the loss may be carried. The portion of the loss which shall be carried to each of the other taxable years shall be the excess, if any, of the amount of excess disaster loss over the sum of the net income for each of the prior taxable years to which that excess disaster loss is carried.
(c)
“Excess disaster loss” means a disaster loss computed pursuant to Section 165 of the Internal Revenue Code, which exceeds the net income of the year of loss or, if the election under Section 165(i) of the Internal Revenue Code is made, the net income of the year preceding the loss.
(d)
The provisions of this section and Section 165(i) of the Internal Revenue Code shall be applicable to any of the losses listed in subdivision (a) sustained in any county or city in this state which was proclaimed by the Governor to be in a state of disaster.
(e)
Any corporation subject to the provisions of Section 25101 or 25101.15 that has disaster losses pursuant to this section, shall determine the excess disaster loss to be carried to other taxable years under the principles specified in Section 25108 relating to net operating losses.
(f)
Losses allowable under this section may not be taken into account in computing a net operating loss deduction under Section 172 of the Internal Revenue Code.
(g)
For losses described in subdivision (a), the election under Section 165(i) of the Internal Revenue Code may be made on a return or amended return filed on or before the due date of the return (determined with regard to extension) for the taxable year in which the disaster occurred.
Cal. Revenue and Taxation Code - RTC § 24347.8. Section 24347.8.
(a)
An excess disaster loss, as defined in subdivision (c), shall be carried to other taxable years as provided in subdivision (b), with respect to losses sustained in the County of Imperial as a result of the earthquake that occurred in April 2010.
(b)
(1)
In the case of any loss allowed under Section 165 of the Internal Revenue Code, relating to losses, any excess disaster
loss shall be carried forward to each of the five taxable years following the taxable year for which the loss is claimed. However, if there is any excess disaster loss remaining after the five-year period, then the applicable percentage, as set forth in paragraph (1) of subdivision (b) of Section 24416, of that excess disaster loss shall be carried forward to each of the next 10 taxable years.
(2)
The entire amount of any excess disaster loss as defined in subdivision (c) shall be carried to the earliest of the taxable years to which, by reason of subdivision (b), the loss may be carried. The portion of the loss which shall be carried to each of the other taxable years shall be the excess, if any, of the amount of excess disaster loss over the sum of the net income for each of the prior taxable years to which that excess disaster loss is carried.
(c)
“Excess disaster loss” means a
disaster loss computed pursuant to Section 165 of the Internal Revenue Code, which exceeds the net income of the year of loss or, if the election under Section 165(i) of the Internal Revenue Code is made, the net income of the year preceding the loss.
(d)
The provisions of this section and Section 165(i) of the Internal Revenue Code shall be applicable to any of the losses listed in subdivision (a) sustained in any county or city in this state which was proclaimed by the Governor to be in a state of disaster.
(e)
Any corporation subject to the provisions of Section 25101 or 25101.15 that has disaster losses pursuant to this section, shall determine the excess disaster loss to be carried to other taxable years under the principles specified in Section 25108 relating to net operating losses.
(f)
Losses allowable under
this section may not be taken into account in computing a net operating loss deduction under Section 172 of the Internal Revenue Code.
(g)
For losses described in subdivision (a), the election under Section 165(i) of the Internal Revenue Code may be made on a return or amended return filed on or before the due date of the return (determined with regard to extension) for the taxable year in which the disaster occurred.
Cal. Revenue and Taxation Code - RTC § 24347.9. Section 24347.9.
(a)
An excess disaster loss, as defined in subdivision (c), shall be carried to other taxable years as provided in subdivision (b), with respect to losses resulting from any of the following disasters:
(1)
Any loss sustained in the Counties of Los Angeles and Monterey as a result of wildfires that commenced in August 2009.
(2)
Any
loss sustained in the County of Placer as a result of wildfires that commenced in August 2009.
(3)
Any loss sustained in the Counties of Calaveras, Imperial, Los Angeles, Orange, Riverside, San Bernardino, San Francisco, and Siskiyou as a result of winter storms that commenced in January 2010.
(4)
Any loss sustained in the County of Kern as a result of the wildfires that commenced in July 2010.
(b)
(1)
In the case of any loss allowed under Section 165 of the Internal Revenue Code, relating to losses, any excess disaster loss shall be carried forward to each of the five taxable years following the taxable year for which the loss is claimed. However, if there is any excess disaster loss remaining after the five-year period, then the applicable percentage, as set forth in paragraph (1) of
subdivision (b) of Section 24416, of that excess disaster loss shall be carried forward to each of the next 10 taxable years.
(2)
The entire amount of any excess disaster loss as defined in subdivision (c) shall be carried to the earliest of the taxable years to which, by reason of subdivision (b), the loss may be carried. The portion of the loss which shall be carried to each of the other taxable years shall be the excess, if any, of the amount of excess disaster loss over the sum of the net income for each of the prior taxable years to which that excess disaster loss is carried.
(c)
“Excess disaster loss” means a disaster loss computed pursuant to Section 165 of the Internal Revenue Code, which exceeds the net income of the year of loss or, if the election under Section 165(i) of the Internal Revenue Code is made, the net income of the year preceding the loss.
(d)
The provisions of this section and Section 165(i) of the Internal Revenue Code shall be applicable to any of the losses listed in subdivision (a) sustained in any county or city in this state which was proclaimed by the Governor to be in a state of disaster.
(e)
Any corporation subject to the provisions of Section 25101 or 25101.15 that has disaster losses pursuant to this section, shall determine the excess disaster loss to be carried to other taxable years under the principles specified in Section 25108 relating to net operating losses.
(f)
Losses allowable under this section may not be taken into account in computing a net operating loss deduction under Section 172 of the Internal Revenue Code.
(g)
For losses described in subdivision (a), the
election under Section 165(i) of the Internal Revenue Code may be made on a return or amended return filed on or before the due date of the return (determined with regard to extension) for the taxable year in which the disaster occurred.
Cal. Revenue and Taxation Code - RTC § 24347.10. Section 24347.10.
(a)
An excess disaster loss, as defined in subdivision (c), shall be carried to other taxable years as provided in subdivision (b), with respect to losses sustained in the County of San Mateo as a result of the explosion and fire that occurred in September 2010.
(b)
(1)
In the case of any loss allowed under Section 165 of the Internal Revenue Code, relating to losses,
any excess disaster loss shall be carried forward to each of the five taxable years following the taxable year for which the loss is claimed. However, if there is any excess disaster loss remaining after the five-year period, then the applicable percentage, as set forth in paragraph (1) of subdivision (b) of Section 24416, of that excess disaster loss shall be carried forward to each of the next 10 taxable years.
(2)
The entire amount of any excess disaster loss as defined in subdivision (c) shall be carried to the earliest of the taxable years to which, by reason of subdivision (b), the loss may be carried. The portion of the loss which shall be carried to each of the other taxable years shall be the excess, if any, of the amount of excess disaster loss over the sum of the net income for each of the prior taxable years to which that excess disaster loss is carried.
(c)
“Excess
disaster loss” means a disaster loss computed pursuant to Section 165 of the Internal Revenue Code, which exceeds the net income of the year of loss or, if the election under Section 165(i) of the Internal Revenue Code is made, the net income of the year preceding the loss.
(d)
This section and Section 165(i) of the Internal Revenue Code apply to any of the losses listed in subdivision (a) sustained in any county or city in this state which was proclaimed by the Governor to be in a state of disaster.
(e)
A corporation subject to Section 25101 or 25101.15 that has disaster losses pursuant to this section shall determine the excess disaster loss to be carried to other taxable years under the principles specified in Section 25108 relating to net operating losses.
(f)
Losses allowable under this section shall not be
taken into account in computing a net operating loss deduction under Section 172 of the Internal Revenue Code.
(g)
For losses described in subdivision (a), the election under Section 165(i) of the Internal Revenue Code may be made on a return or amended return filed on or before the due date of the return (determined with regard to extension) for the taxable year in which the disaster occurred.
Cal. Revenue and Taxation Code - RTC § 24347.11. Section 24347.11.
(a)
Section 165(i) of the Internal Revenue Code shall be applicable to any losses sustained in the County of Santa Cruz as a result of the severe storms that occurred in March 2011.
(b)
For losses described in subdivision (a), the election under Section 165(i) of the Internal Revenue Code may be made on a return or amended return filed on or before the due date of the return, determined with
regard to extension, for the taxable year in which the disaster occurred.
(c)
Unless specifically provided otherwise, any law that suspends, defers, reduces, or otherwise diminishes the deduction of a net operating loss shall not apply to a net operating loss attributable to the loss described in subdivision (a).
Cal. Revenue and Taxation Code - RTC § 24347.12. Section 24347.12.
(a)
Section 165(i) of the Internal Revenue Code shall be applicable to any losses sustained in the Counties of Los Angeles and San Bernardino as a result of the severe winds that occurred in November 2011.
(b)
For losses described in subdivision (a), the election under Section 165(i) of the Internal Revenue Code may be made on a return or amended return filed on or before the due date of the
return, determined with regard to extension, for the taxable year in which the disaster occurred.
(c)
Unless specifically provided otherwise, any law that suspends, defers, reduces, or otherwise diminishes the deduction of a net operating loss shall not apply to a net operating loss attributable to the loss described in subdivision (a).
Cal. Revenue and Taxation Code - RTC § 24347.13. Section 24347.13.
(a)
Section 165(i) of the Internal Revenue Code shall be applicable to any losses sustained in the County of San Diego as a result of the wildfires that occurred in May 2014.
(b)
For losses described in subdivision (a), the election under Section 165(i) of the Internal Revenue Code may be made on a return or amended return filed on or before the due date of the return, determined with regard to
extension, for the taxable year in which the disaster occurred.
(c)
Unless specifically provided otherwise, any law that suspends, defers, reduces, or otherwise diminishes the deduction of a net operating loss shall not apply to a net operating loss attributable to the loss described in subdivision (a).
Cal. Revenue and Taxation Code - RTC § 24347.14. Section 24347.14.
(a)
For taxable years beginning on or after January 1, 2014, and before January 1, 2029, Section 165(i) of the Internal Revenue Code, relating to disaster losses, shall be applicable to any loss sustained as a result of any disaster occurring in any city, county, or city and county in this state that is proclaimed by the Governor to be in a state of emergency.
(b)
(1)
For losses described in subdivision (a), the election under Section 165(i) of the Internal Revenue Code, relating to disaster losses, may be made on a return or amended return filed
on or before the due date of the return, determined with regard to any extension of time for filing the return, for the taxable year in which the disaster occurred.
(2)
Notwithstanding Section 18572, this subdivision shall apply to any loss described in subdivision (a).
(c)
Unless specifically provided otherwise, any law, other than Section 24416, that suspends, defers, reduces, or otherwise diminishes the deduction of a net operating loss shall not apply to a net operating loss attributable to the loss described in subdivision (a).
(d)
This section shall remain in effect only until December 1,
2029, and as of that date is repealed.
Cal. Revenue and Taxation Code - RTC § 24348. Section 24348.
(a)
There shall be allowed as a deduction either of the following:
(1)
Debts which become worthless within the taxable year in an amount not in excess of the part charged off within that taxable year.
(2)
In the case of a bank (as defined in Section 581 of the Internal Revenue Code), in lieu of any deduction under paragraph (1), in the discretion of the Franchise Tax Board, a reasonable addition to a reserve
for bad debts determined in accordance with Section 585 of the Internal Revenue Code, relating to reserves for losses on loans of banks, except as otherwise provided.
(b)
When satisfied that a debt is recoverable in part only, the Franchise Tax Board may allow that debt, in an amount not in excess of the part charged off within the taxable year, as a deduction; provided, however, that if a portion of a debt is claimed and allowed as a deduction in any year, no deduction shall be allowed in any subsequent year for any portion of the debt which in any prior year was charged off, regardless of whether claimed as a deduction in that prior year.
(c)
(1)
The amendments to this section made by the act adding this subdivision shall apply only to taxable years beginning on or after January 1, 2002.
(2)
In the case of any bank, savings and loan association, or financial corporation (whether a taxpayer or a member of a combined reporting group) that maintained a reserve for bad debts for the last taxable year beginning before January 1, 2002, and that is required by the amendments to this section made by the act adding this subdivision to change its method of computing reserves for bad debts, all of the following shall apply:
(A)
That change shall be treated as a change in a method of accounting.
(B)
That change shall be treated as initiated by the bank, savings and loan association, or financial corporation (whether a taxpayer or a member of a combined reporting group).
(C)
That change shall be treated as made with the consent of the Franchise Tax Board.
(D)
The net amount of adjustments required by Article 6 (commencing with Section 24721) of Chapter 13 to be taken into account by the bank, savings and loan association, or financial corporation (whether a taxpayer or a member of a combined reporting group):
(i)
Shall be determined by taking into account only 50 percent of the “applicable excess reserves” (as defined in subdivision (d)), and
(ii)
As so determined, shall be taken into account on the last day of the first taxable year beginning on or after January 1, 2002.
(iii)
The amount of “applicable excess reserves” in excess of the amount taken into account under clause (i) of this subparagraph shall be reduced to zero and shall not be taken into account for purposes of this part.
(d)
(1)
In the case of a large bank (as defined in Section 585(c)(2) of the Internal Revenue Code), or a financial corporation that is not allowed to use the reserve for bad debts under Section 585 of the Internal Revenue Code, the term “applicable excess reserves” means the balance of the reserves described in former subparagraph (B) of paragraph (1) of subdivision (a) (prior to the amendments made by the act adding this subdivision) as of the close of the last taxable year beginning before January 1, 2002.
(2)
In all other cases, the term “applicable excess reserves” shall be zero and shall not be taken into account for purposes of this part.
(e)
The amount of “applicable excess reserves” not taken into account pursuant to clause (iii) of subparagraph (D) of paragraph (2) of subdivision (c) or
paragraph (2) of subdivision (d) shall not affect the amount of the allowable deduction under paragraph (1) of subdivision (a).
Cal. Revenue and Taxation Code - RTC § 24349. Section 24349.
(a)
There shall be allowed as a depreciation deduction a reasonable allowance for the exhaustion, wear and tear (including a reasonable allowance for obsolescence)—
(1)
Of property used in the trade or business; or
(2)
Of property held for the production of income.
(b)
Except as otherwise provided in subdivision (c), for taxable years ending
after December 31, 1958, the term “reasonable allowance” as used in subdivision (a) shall include, but shall not be limited to, an allowance computed in accordance with regulations prescribed by the Franchise Tax Board, under any of the following methods:
(1)
The straight-line method.
(2)
The declining balance method, using a rate not exceeding twice the rate that would have been used had the annual allowance been computed under the method described in paragraph (1).
(3)
The sum of the years-digits method.
(4)
Any other consistent method productive of an annual allowance that, when added to all allowances for the period commencing with the taxpayer’s use of the property and including the taxable year, does not, during the first two-thirds of the useful
life of the property, exceed the total of those allowances that would have been used had those allowances been computed under the method described in paragraph (2).
Nothing in this subdivision shall be construed to limit or reduce an allowance otherwise allowable under subdivision (a).
(c)
Any grapevine replaced in a vineyard in California in a taxable year beginning on or after January 1, 1992, as a direct result of a phylloxera infestation in that vineyard, and any grapevine replaced in a vineyard in California in a taxable year beginning on or after January 1, 1997, as a direct result of Pierce’s disease in that vineyard, shall have a useful life of five years, except that it shall have a class life of 10 years for purposes of depreciation under Section 168(g)(2) of the Internal Revenue Code where the taxpayer has made an election under Section 263A(d)(3) of the Internal Revenue Code not to
capitalize costs of the infested vineyard. Every taxpayer claiming a deduction under this section with respect to a grapevine as described in this subdivision shall obtain a written certification from an independent state-certified integrated pest management adviser, or a state agricultural commissioner or adviser, that specifies that the replanting was necessary to restore a vineyard infested with phylloxera or Pierce’s disease. The taxpayer shall retain the certification for future audit purposes.
(d)
For purposes of this part, the deduction for property leased to governments and other tax-exempt entities, as defined in Section 168(h) of the Internal Revenue Code, shall be limited to the amount determined under Section 168(g) of the Internal Revenue Code, relating to alternative depreciation system for certain property.
(e)
(1)
In the case of any building
erected or improvements made on leased property, if the building or improvement is property to which this section applies, the depreciation deduction shall be determined under the provisions of this section.
(2)
An improvement shall be treated for purposes of determining gain or loss under this part as disposed of by the lessor when so disposed of or abandoned if both of the following occur:
(A)
The improvement is made by the lessor of leased property for the lessee of that property.
(B)
The improvement is irrevocably disposed of or abandoned by the lessor at the termination of the lease by the lessee.
This subdivision shall not apply to any property to which Section 168 of the Internal Revenue Code does not apply for federal purposes by reason of Section 168(f) of the
Internal Revenue Code. Any election made under Section 168(f)(1) of the Internal Revenue Code for federal purposes with respect to that property shall be treated as a binding election for state purposes under this subdivision with respect to that same property and no separate election under subdivision (e) of Section 23051.5 with respect to that property shall be allowed.
(3)
(A)
In determining a lease term, both of the following shall apply:
(i)
There shall be taken into account options to renew.
(ii)
Two or more successive leases which are part of the same transaction (or a series of related transactions) with respect to the same or substantially similar property shall be treated as one lease.
(B)
For purposes of clause (i) of
subparagraph (A), in the case of nonresidential real property or residential rental property, there shall not be taken into account any option to renew at fair market value determined at the time of renewal.
(f)
(1)
Section 167(g) of the Internal Revenue Code, relating to depreciation under income forecast method, shall apply except as otherwise provided.
(2)
Section 167(g)(2)(C) of the Internal Revenue Code is modified by substituting “Section 19521” in lieu of “Section 460(b)(7)” of the Internal Revenue Code.
(3)
Section 167(g)(5)(D) of the Internal Revenue Code is modified by substituting “Part 10.2 (commencing with Section 18401) (other than Article 2 (commencing with Section 19021) and Sections 19142 to 19150, inclusive)” in lieu of “Subtitle F (other than Sections 6654 and 6655).”
(4)
Section 167(g)(5)(E) of the Internal Revenue Code, relating to treatment of distribution costs, shall not apply.
(5)
Section 167(g)(7) of the Internal Revenue Code, relating to treatment of participations and residuals, shall not apply.
Cal. Revenue and Taxation Code - RTC § 24349.1. Section 24349.1.
(a)
Section 280F of the Internal Revenue Code, relating to limitations on depreciation for luxury automobiles and certain property used for personal purposes, shall apply, except as otherwise provided.
(b)
Except as provided in subdivision (c), Section 280F of the Internal Revenue Code shall be modified as follows:
(1)
The terms “deduction” or “recovery deduction,” relating to amounts allowable as a deduction under Section 168 of the Internal Revenue Code, mean the amount allowable as a deduction for depreciation under this part.
(2)
The term “recovery period,” relating to property under
Section 168 of the Internal Revenue Code, means the class life asset depreciation range allowable under this part.
(3)
The provisions of Section 280F of the Internal Revenue Code which relate to the investment tax credit shall not be applicable for purposes of this part.
(c)
Paragraphs (1) and (2) of subdivision (b) shall not apply to Section 24356.7 property.
(d)
The amendments made by Section 13202(a) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97) to Section 280F of the Internal Revenue Code, relating to limitation on depreciation for luxury automobiles; limitation where certain property used for personal purposes, shall not apply.
Cal. Revenue and Taxation Code - RTC § 24349.2. Section 24349.2.
Section 280G of the Internal Revenue Code, relating to golden parachute payments, shall apply, except as otherwise provided.
Cal. Revenue and Taxation Code - RTC § 24350. Section 24350.
Paragraphs (2), (3), and (4) of Section 24349(b) shall apply only in the case of property (other than intangible property) described in Section 24349(a) with a useful life of three years or more—
(a)
The construction, reconstruction, or erection of which is completed after December 31, 1958, and then only to that portion of the basis which is properly attributable to such construction, reconstruction, or erection after December 31, 1958; or
(b)
Acquired after December 31, 1958, if the original use
of such property commences with the taxpayer and commences after such date.
Cal. Revenue and Taxation Code - RTC § 24351. Section 24351.
Where, under regulations prescribed by the Franchise Tax Board, the taxpayer and the Franchise Tax Board have, after the date of enactment of this section, entered into an agreement in writing specifically dealing with the useful life and rate of depreciation of any property, the rate so agreed upon shall be binding on both the taxpayer and the Franchise Tax Board in the absence of facts or circumstances not taken into consideration in the adoption of such agreement. The responsibility of establishing the existence of such facts and circumstances shall rest
with the party initiating the modification. Any change in the agreed rate and useful life specified in the agreement shall not be effective for taxable years before the taxable year in which notice in writing by certified mail or registered mail is served by the party to the agreement initiating such change.
Cal. Revenue and Taxation Code - RTC § 24352. Section 24352.
In the absence of an agreement under Section 24351 containing a provision to the contrary, a taxpayer may at any time elect in accordance with regulations prescribed by the Franchise Tax Board to change from the method of depreciation described in Section 24349(b)(2) to the method described in Section 24349(b)(1).
Cal. Revenue and Taxation Code - RTC § 24352.5. Section 24352.5.
(a)
Under regulations prescribed by the Franchise Tax Board, a taxpayer may, for purposes of computing the allowance under Section 24349 with respect to personal property, reduce the amount taken into account as salvage value by an amount which does not exceed 10 percent of the basis of such property (as determined under Section 24353 as of the time as of which such salvage value is required to be determined).
(b)
For purposes of this section, the term “personal property” means depreciable personal property (other than livestock) with a
useful life of three years or more.
Cal. Revenue and Taxation Code - RTC § 24353. Section 24353.
(a)
The basis on which exhaustion, wear and tear, and obsolescence are to be allowed in respect of any property shall be the adjusted basis provided in Section 24911 for the purpose of determining the gain on the sale or other disposition of the property.
(b)
If any property is acquired subject to a lease, each of the following shall apply:
(1)
No portion of the adjusted basis shall be allocated to the
leasehold interest.
(2)
The entire adjusted basis shall be taken into account in determining the depreciation deduction, if any, with respect to the property subject to lease.
Cal. Revenue and Taxation Code - RTC § 24354. Section 24354.
In the case of property held by one person for life with remainder to another person, the deduction shall be computed as if the life tenant were the absolute owner of the property and shall be allowed to the life tenant. In the case of property held in trust, the allowable deduction shall be apportioned between the income beneficiaries and the trustee in accordance with the pertinent provisions of the instrument creating the trust, or, in the absence of such provisions on the basis of the trust income allocable to each.
Cal. Revenue and Taxation Code - RTC § 24354.1. Section 24354.1.
(a)
Except as provided in subdivisions (b) and (c) of this section, in the case of property of the type defined in Section 1250(c) of the Internal Revenue Code, subdivision (b) of Section 24349 shall not apply and the term “reasonable allowance” as used in subdivision (a) of Section 24349 shall include an allowance computed in accordance with regulations prescribed by the Franchise Tax Board, under any
of the following methods:
(1)
The straight line method,
(2)
The declining balance method, using a rate not exceeding 150 percent of the rate which would have been used had the annual allowance been computed under the method described in paragraph (1), or
(3)
Any other consistent method productive of an annual allowance which, when added to all allowances for the period commencing with the taxpayer’s use of the property and including the taxable year, does not, during the first two-thirds of the useful life of the property, exceed the total of such allowances which would have been used had such allowances been computed under the method described in paragraph (2).
Nothing in this subdivision shall be construed to limit or reduce an allowance otherwise allowable under subdivision (a) of Section 24349 except where allowable solely by reason of paragraph (2), (3), or (4) of subdivision (b) of Section 24349.
(b)
(1)
Subdivision (a) of this section shall not apply, and subdivision (b) of Section 24349 shall apply in any taxable year, to a building or structure—
(A)
Which is residential rental property located within the United States or any of its possessions, or located within a foreign country if a method of depreciation for such property comparable to the method provided in paragraph (2) or (3) of subdivision (b) of Section 24349 is provided by the laws of such country and
(B)
The original use of
which commences with the taxpayer. In the case of residential rental property located within a foreign country, the original use of which commences with the taxpayer, if the allowance for depreciation provided under the laws of such country for such property is greater than that provided under subdivision (a) of this section, but less than that provided under subdivision (b) of Section 24349, the allowance for depreciation under subdivision (b) of Section 24349 shall be limited to the amount provided under the laws of such country.
(2)
For purposes of paragraph (1), a building or structure shall be considered to be residential rental property for any taxable year only if 80 percent or more of the gross rental income from such building or structure for such year is rental income from dwelling units (within the meaning of paragraph (3) of subdivision (c) of Section 24354.2. For purposes of the preceding sentence, if any portion of such building
or structure is occupied by the taxpayer, the gross rental income from such building or structure shall include the rental value of the portion so occupied.
(3)
Any change in the computation of the allowance for depreciation for any taxable year, permitted or required by reason of the application of paragraph (1), shall not be considered a change in a method of accounting.
(c)
Subdivision (a) of this section shall not apply, and subdivision (b) of Section 24349 shall apply, in the case of property—
(1)
The construction, reconstruction, or erection of which was begun before January 1, 1971, or
(2)
For which a written contract entered into before January 1, 1971, with respect to any part of the construction, reconstruction, or erection or for the
permanent financing thereof, was on January 1, 1971, and at all times thereafter, binding on the taxpayer.
(d)
Except as provided in subdivision (e), in the case of property of the type defined in Section 1250(c) of the Internal Revenue Code acquired after December 31, 1970, the original use of which does not commence with the taxpayer, the allowance for depreciation under Sections 24349 to 24354.2, inclusive, shall be limited to an amount computed under—
(1)
The straight line method, or
(2)
Any other method determined by the Franchise Tax Board to result in a reasonable allowance under subdivision (a) of Section 24349, not including—
(A)
Any declining balance method,
(B)
The sum of the
years-digits method, or
(C)
Any other method allowable solely by reason of the application of paragraph (4) of subdivision (b) of Section 24349 or paragraph (3) of subdivision (a) of this section.
(e)
In the case of property of the type defined in Section 1250(c) of the Internal Revenue Code which is residential rental property (as defined in paragraph (2) of subdivision (b)) acquired after December 31, 1970, having a useful life of 20 years or more, the original use of which does not commence with the taxpayer, the allowance for depreciation under Sections 24349 to 24354.2, inclusive, shall be limited to an amount computed under—
(1)
The straight line method,
(2)
The declining balance method, using a rate not exceeding 125 percent of the rate which
would have been used had the annual allowance been computed under the method described in paragraph (1), or
(3)
Any other method determined by the Franchise Tax Board to result in a reasonable allowance under subdivision (a) of Section 24349, not including—
(A)
The sum of the years-digits method,
(B)
Any declining balance method using a rate in excess of the rate permitted under paragraph (2), or
(C)
Any other method allowable solely by reason of the application of paragraph (4) of subdivision (b) of Section 24349 or paragraph (3) of subdivision (a) of this section.
(f)
(1)
For purposes of subdivisions (b), (d), and (e), if property of the type defined in Section
1250(c) of the Internal Revenue Code which is not property described in subdivision (a) of Section 24349 when its original use commences, becomes property described in subdivision (a) of Section 24349 after December 31, 1970, such property shall not be treated as property the original use of which commences with the taxpayer.
(2)
Subdivisions (d) and (e) shall not apply in the case of property of the type defined in Section 1250(c) of the Internal Revenue Code, acquired after December 31, 1970, pursuant to a written contract for the acquisition of such property or for the permanent financing thereof, which was, on December 31, 1970, and at all times thereafter, binding on the taxpayer.
(g)
This section shall not apply to public utility property which means property used predominantly in the trade or business of the furnishing or sale of—
(1)
Electrical energy, water, or sewage disposal services,
(2)
Gas or steam through a local distribution system,
(3)
Telephone services, or other communication services if furnished or sold by the Communications Satellite Corporation for purposes authorized by the Communications Satellite Act of 1962 (47 U.S.C. 701), or
(4)
Transportation of gas or steam by pipeline,
if the rates for such furnishing or sale, as the case may be, have been established or approved by a state or political subdivision thereof, by any agency or
instrumentality of the United States, or by a public service or public utility commission or other similar body of any state or political subdivision thereof.
Cal. Revenue and Taxation Code - RTC § 24355. Section 24355.
Section 167(f) of the Internal Revenue Code, relating to treatment of property excluded from Section 197, shall apply, except as otherwise provided.
Cal. Revenue and Taxation Code - RTC § 24355.3. Section 24355.3.
For purposes of computing the depreciation deduction pursuant to Section 24349, the useful life of any Alaska natural gas pipeline, as defined in Section 168(i)(16) of the Internal Revenue Code, shall be seven years.
Cal. Revenue and Taxation Code - RTC § 24355.4. Section 24355.4.
For purposes of computing the depreciation deduction under Section 24349, a class life of four years shall be used for any qualified rent-to-own property as defined in Section 168(i)(14) of the Internal Revenue Code.
Cal. Revenue and Taxation Code - RTC § 24355.5. Section 24355.5.
(a)
Section 197 of the Internal Revenue Code, relating to amortization of goodwill and certain other intangibles, shall apply, except as otherwise provided.
(b)
(1)
Section 13261(g) of the Revenue Reconciliation Act of 1993 (P.L. 103-66), relating to effective dates, shall apply, except as otherwise provided.
(2)
(A)
If a taxpayer has, at any time, made an
election for federal purposes under Section 13261(g)(2) of the Revenue Reconciliation Act of 1993 (P.L. 103-66), relating to election to have amendments apply to property acquired after July 25, 1991, or Section 13261(g)(3) of that act, relating to elective binding contract exception, a separate election for state purposes shall not be allowed under paragraph (3) of subdivision (e) of Section 23051.5 and the federal election shall be binding for purposes of this part.
(B)
If a taxpayer has not made an election for federal purposes under Section 13261(g)(2) of the Revenue Reconciliation Act of 1993 (P.L. 103-66), relating to election to have amendments apply to property acquired after July 25, 1991, or Section 13261(g)(3) of that act, relating to elective binding contract exception, with respect to property acquired before August 11, 1993, then the taxpayer shall not be allowed to make an election under Section 13261(g) of the Revenue
Reconciliation Act of 1993 (P.L. 103-66), for purposes of this part, with respect to that property.
(c)
Notwithstanding any other provision of this section, each of the following shall apply:
(1)
No deduction shall be allowed under this section for any taxable year beginning prior to January 1, 1994.
(2)
No inference is intended with respect to the allowance or denial of any deduction for amortization in any taxable year beginning before January 1, 1994.
(3)
In the case of an intangible that was acquired in an taxable year beginning before January 1, 1994, the amount to be amortized shall not exceed the adjusted basis of that intangible as of the first day of the first taxable year beginning on or after January 1, 1994, and that amount shall be
amortized ratably over the period beginning with the first month of the first taxable year beginning on or after January 1, 1994, and ending 15 years after the month in which the intangible was acquired.
Cal. Revenue and Taxation Code - RTC § 24356. Section 24356.
(a)
(1)
In the case of Section 24356 property, the term “reasonable allowance” as used in subdivision (a) of Section 24349, may, at the election of the taxpayer, include an allowance, for the first taxable year for which a deduction is allowable under Sections 24349 through 24354 to the taxpayer with respect to such property, of 20 percent of the cost of that property.
(2)
If in any one taxable year the cost of Section 24349 property with respect to which the taxpayer may elect an allowance under paragraph (1) for that taxable year exceeds ten thousand dollars ($10,000), then paragraph (1) applies with respect to those items selected by the taxpayer, but only to the
extent of an aggregate cost of ten thousand dollars ($10,000).
(b)
(1)
In lieu of subdivision (a), Section 179 of the Internal Revenue Code, relating to election to expense certain depreciable business assets, applies, except as otherwise provided.
(2)
Section 179(b)(1) of the Internal Revenue Code, relating to dollar limitation, does not apply and in lieu thereof, the aggregate cost that may be taken into account under Section 179(a) of the Internal Revenue Code, for any taxable year, shall not exceed twenty-five thousand dollars ($25,000).
(3)
Section 179(b)(2) of the Internal Revenue Code, relating to reduction in limitation, does not apply and in lieu thereof, the limitation under paragraph
(2), for any taxable year, shall be reduced, but not below zero, by the amount by which the cost of Section 179 property, as defined in Section 179(d)(1) of the Internal Revenue Code, except as otherwise provided, that is placed in service during the taxable year, exceeds two hundred thousand dollars ($200,000).
(4)
Section 179 of the Internal Revenue Code is modified to provide that the “aggregate amount disallowed” referred to in Section 179(b)(3)(B) of the Internal Revenue Code shall be computed under this part as that section read on the date the property generating the amount disallowed was placed in service.
(5)
Section 179(c)(2) of the Internal Revenue Code, relating to elections, shall not apply.
(6)
Section
179(d)(1)(A)(ii) of the Internal Revenue Code, relating to computer software, shall not apply.
(7)
Section 179(e) of the Internal Revenue Code, relating to special rules for qualified disaster assistance property, shall not apply.
(c)
(1)
The election under this section for any taxable year shall be made within the time prescribed by law (including extensions thereof) for filing the return for such taxable year. The election shall be made in such manner as the Franchise Tax Board may by regulations prescribe.
(2)
Any election made under this section shall not be revoked except with the consent of the Franchise Tax Board.
(d)
(1)
For purposes of this section, the term “Section 24356 property” means tangible personal property:
(A)
Of a character subject to the allowance for depreciation under Sections 24349 through 24354;
(B)
Acquired by purchase after December 31, 1958, for use in a trade or business, and
(C)
With a useful life (determined at the time of such acquisition) of six years or more.
(2)
For purposes of paragraph (1), the term “purchase” means any acquisition of property, but only if:
(A)
The property is not acquired from a person whose relationship to the person acquiring it would result in the
disallowance of losses under Section 24427 (but, in applying Section 267 of the Internal Revenue Code, relating to losses, expenses, and interest with respect to transactions between related taxpayers, for purposes of this section, Section 267(c)(4) of the Internal Revenue Code shall be treated as providing that the family of an individual shall include only the individual’s spouse, ancestors, and lineal descendants);
(B)
The property is not acquired by one member of an affiliated group from another member of the same affiliated group, and
(C)
The basis of the property in the hands of the person acquiring it is not determined in whole or in part by reference to the adjusted basis of that property in the hands of the person from whom acquired.
(3)
For purposes of this section, the cost of property does not include so much of the basis of such property as is determined by reference to the basis of other property held at any time by the person acquiring that property.
(4)
For purposes of subdivision (a) and subdivision (b) of this section:
(A)
All members of an affiliated group shall be treated as one taxpayer, and
(B)
The Franchise Tax Board shall apportion the dollar limitation contained in subdivision (a) or subdivision (b) among the members of the affiliated group in the manner as it shall by regulations prescribe.
(5)
For purposes of paragraphs (2) and (4), the term “affiliated group”
has the meaning assigned to it by Section 1504 of the Internal Revenue Code, except that, for those purposes, the phrase “more than 50 percent” shall be substituted for the phrase “at least 80 percent” each place it appears in Section 1504(a) of the Internal Revenue Code.
(6)
In applying Section 24353, the adjustment under paragraph (1) of subdivision (b) of Section 24916, resulting by reason of an election made under this section with respect to any Section 24356 property, shall be made before any other deduction allowed by subdivision (a) of Section 24349 is computed.
(e)
The Franchise Tax Board shall prescribe those regulations as may be necessary to carry out the purposes of this section.
Cal. Revenue and Taxation Code - RTC § 24356.1. Section 24356.1.
(a)
The amendments made by Section 124 of the Consolidated Appropriations Act, 2016 (Public Law 114-113) to Section 179 of the Internal Revenue Code, relating to elections to expense certain depreciable business assets, shall not apply.
(b)
The amendments made by Section 13101 of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97) to Section 179 of the Internal Revenue Code, relating to elections to expense certain depreciable business assets, shall not apply.
Cal. Revenue and Taxation Code - RTC § 24357. Section 24357.
(a)
There shall be allowed as a deduction any charitable contribution, as defined in Section 24359, the payment of which is made within the taxable year. A charitable contribution shall be allowable as a deduction only if verified under regulations prescribed by the Franchise Tax Board.
(b)
(1)
In the case of a corporation reporting its income on the accrual basis, the corporation may elect to treat the contribution as paid during that taxable year if both of the following occur:
(A)
The board of directors authorizes a charitable contribution during the taxable year.
(B)
Payment of the contribution is made after the close of that taxable year and on or before the 15th day of the fourth month following the close of the taxable year.
(2)
The election allowed by paragraph (1) may be made only at the time of the filing of the return for the taxable year, and shall be signified in the manner as the Franchise Tax Board shall by regulations prescribe.
(c)
For purposes of this section, payment of a charitable contribution that consists of a future interest in tangible personal property shall be treated as made only when all intervening interests in, and rights to the actual possession or enjoyment of, the property have expired or are held by persons other than the taxpayer or those standing in a relationship to the taxpayer described in Section
24428. For purposes of the preceding sentence, a fixture which is intended to be severed from the real property shall be treated as tangible personal property.
(d)
No deduction shall be allowed under this section for traveling expenses (including amounts expended for meals and lodging) while away from home, whether paid directly or by reimbursement, unless there is no significant element of personal pleasure, recreation, or vacation in that travel.
(e)
(1)
Section 170(f)(8) of the Internal Revenue Code, relating to substantiation requirement for certain contributions, shall apply, except as otherwise provided.
(2)
No deduction shall be denied under Section 170(f)(8) of the Internal
Revenue Code, relating to substantiation requirement for certain contributions, upon a showing that the requirements in Section 170(f)(8) of the Internal Revenue Code have been met with respect to that contribution for federal purposes.
(f)
Section 170(f)(9) of the Internal Revenue Code, relating to denial of deduction where contribution for lobbying activities, shall apply, except as otherwise provided.
(g)
(1)
Notwithstanding any other provision of law to the contrary, for purposes of this section and Section 24341, Section 170 of the Internal Revenue Code, relating to charitable, etc., contributions and gifts, shall be applied to allow a taxpayer to elect to treat any contribution described in paragraph (2) made in January 2005, as if that contribution was made
on December 31, 2004, and not in January 2005.
(2)
A contribution is described in this paragraph if that contribution is a cash contribution made for the relief of victims in areas affected by the December 26, 2004, Indian Ocean tsunami for which a charitable contribution deduction is allowable under this section.
(h)
(1)
Section 170(f)(11)(E) of the Internal Revenue Code, relating to qualified appraisal and appraiser, shall apply, except as otherwise provided.
(2)
This subdivision shall apply to appraisals prepared with respect to returns or submissions filed on or after January 1, 2010.
(i)
(1)
Section 170(f)(16)
of the Internal Revenue Code, relating to contributions of clothing and household items, shall apply, except as otherwise provided.
(2)
This subdivision shall apply to contributions made on or after January 1, 2010.
(j)
(1)
Section 170(f)(17) of the Internal Revenue Code, relating to recordkeeping, shall apply, except as otherwise provided.
(2)
This subdivision shall apply to contributions made on or after January 1, 2010.
(k)
(1)
Section 170(o) of the Internal Revenue Code, relating to special rules for fractional gifts, shall apply, except as otherwise provided.
(2)
This subdivision shall apply to contributions made on or after January 1, 2010.
(
l
)
(1)
(A)
The amendments made by Section 605(a)(1) of Public Law 117-328 adding paragraph (7) to Section 170(h) of the Internal Revenue Code, relating to limitation on deduction for qualified conservation contributions made by passthrough entities, shall apply, except as otherwise provided.
(B)
Section 170(h)(7)(G) of the Internal Revenue Code, relating to regulations, as added by Section 605(a)(1) of Public Law 117-328, shall not apply.
(C)
Section 605(a)(3) of Public Law 117-328, relating to extension of statute of limitations for listed transactions, shall apply and is modified
by substituting “Section 19755” for “sections 6501(c)(10) and 6235(c)(6) of such Code.”
(2)
The amendments made by Section 605(b) of Public Law 117-328 adding paragraph (19) to Section 170(f) of the Internal Revenue Code, relating to certain qualified conservation contributions, shall apply.
(3)
This subdivision shall apply to contributions made on or after January 1, 2024.
(m)
Section 605(d)(2) of Public Law 117-328, relating to opportunity to correct, shall apply.
Cal. Revenue and Taxation Code - RTC § 24357.1. Section 24357.1.
(a)
The amount of any charitable contribution of property otherwise taken into account under Section 24357 shall be reduced by the amount of gain that would have been realized if the property contributed had been sold by the taxpayer at its fair market value (determined at the time of that contribution).
(b)
For purposes of subdivision (a), in the case of a charitable contribution of less than
the taxpayer’s entire interest in the property contributed, the taxpayer’s adjusted basis in that property shall be allocated between the interest contributed and any interest not contributed in accordance with regulations prescribed by the Franchise Tax Board.
(c)
The provisions of subdivision (a) shall apply in the case of a charitable contribution of tangible personal property if either of the following conditions is satisfied:
(1)
The use by the donee is unrelated to the purpose or function constituting the basis for its exemption under Section 501 of the Internal Revenue Code or Section 23701, or, in the case of a governmental unit, to any purpose or function described in Section 24359.
(2)
The tangible personal property is applicable property that is sold, exchanged, or otherwise disposed of by the donee before
the last day of the taxable year in which the contribution was made and with respect to which the donee has not made a certification in accordance with paragraph (3) of subdivision (d).
(d)
(1)
In the case of an applicable disposition of applicable property, there shall be included in the income of the donor of that property for the taxable year of the donor in which the applicable disposition occurs an amount equal to the excess, if any, of the following amount:
(A)
The amount of the deduction allowed to the donor under Section 24357 with respect to that property, over
(B)
The donor’s basis in that property at the time that property was contributed.
(2)
For purposes of this section:
(A)
“Applicable disposition” means any sale, exchange, or other disposition by the donee of applicable property after the last day of the taxable year of the donor in which that property was contributed, and before the last day of the three-year period beginning on the date of the contribution of that property, unless the donee makes a certification in accordance with paragraph (3).
(B)
“Applicable property” means charitable deduction property, as defined in Section 6050L(a)(2)(A) of the Internal Revenue Code, that is tangible personal property, the use of which is identified by the donee as related to the purpose or function constituting the basis of the donee’s exemption under Section 501 of the Internal Revenue Code or Section 23701, and for which a deduction in excess of the donor’s basis is allowed.
(3)
A
certification meets the requirements of this paragraph if it is a written statement, which is signed under penalty of perjury by an officer of the donee organization, that meets either of the following conditions:
(A)
Certifies that the use of the property by the donee was related to the purpose or function constituting the basis for the donee’s exemption under Section 501 of the Internal Revenue Code or Section 23701 and describes how the property was used and how that use furthered that purpose or function.
(B)
States the intended use of the property by the donee at the time of the contribution and certifies that the intended use has become impossible or infeasible to implement.
(e)
(1)
For purposes of Section 24357 and subdivision (a), and notwithstanding Section 24912, in the case of a
charitable contribution of taxidermy property that is made by the person who prepared, stuffed, or mounted the property, or by any person who paid or incurred the cost of such preparation, stuffing, or mounting, only the cost of the preparing, stuffing, or mounting shall be included in the basis of that property.
(2)
For purposes of this section, “taxidermy property” means any work of art that satisfies all of the following requirements:
(A)
Is the reproduction or preservation of an animal, in whole or in part.
(B)
Is prepared, stuffed, or mounted for purposes of recreating one or more characteristics of the animal.
(C)
Contains a part of the body of the dead animal.
(f)
The amendments
made to this section by the act adding this subdivision shall apply to contributions made on or after January 1, 2010, without regard to taxable year.
Cal. Revenue and Taxation Code - RTC § 24357.2. Section 24357.2.
(a)
In the case of a contribution (not made by a transfer in trust) of an interest in property which consists of less than the taxpayer’s entire interest in such property, a deduction shall be allowed under Section 24357 only to the extent that the value of the interest contributed would be allowable as a deduction under Section 24357 if such interest had been transferred in trust. For purposes of this subdivision, a contribution by a taxpayer of the right to use property shall be treated as a contribution of less than the taxpayer’s
entire interest in such property.
(b)
Subdivision (a) shall not apply to a contribution of—
(1)
A remainder interest in a personal residence or farm,
(2)
An undivided portion of the taxpayer’s entire interest in property,
(3)
A qualified conservation contribution (as defined in Section 24357.7).
(c)
The amendments made to this section by the 1977–78 Legislature shall apply with respect to contributions of transfers made after December 31, 1976, and before June 14, 1977.
(d)
The amendments made to this section by the 1981–82 Regular Session of the Legislature shall apply with respect to contributions or transfers made in
taxable years beginning on and after January 1, 1982.
Cal. Revenue and Taxation Code - RTC § 24357.3. Section 24357.3.
For purposes of Section 24357, in determining the value of a remainder interest in real property, depreciation (computed on the straight line method) and depletion of such property shall be taken into account, and such value shall be discounted at a rate of 6 percent per annum, except that the Franchise Tax Board may prescribe a different rate.
Cal. Revenue and Taxation Code - RTC § 24357.4. Section 24357.4.
If, in connection with any charitable contribution, a liability is assumed by the recipient or by any other person, or if a charitable contribution is of property which is subject to a liability, then, to the extent necessary to avoid the duplication of amounts, the amount taken into account for purposes of Section 24357 as the amount of the charitable contribution—
(a)
Shall be reduced for interest (1) which
has been paid (or is to be paid) by the taxpayer, (2) which is attributable to the liability, and (3) which is attributable to any period after the making of the contribution, and
(b)
In the case of a bond, shall be further reduced for interest (1) which has been paid (or is to be paid) by the taxpayer on indebtedness incurred or continued to purchase or carry such bond, and (2) which is attributable to any period before the making of the contribution.
The reduction pursuant to subdivision (b) shall not exceed the interest (including interest equivalent) on the bond which is attributable to any period before the making of the contribution and which is not (under the taxpayer’s method of accounting) includable in the gross income of the taxpayer for any taxable year. For purposes of this section, the term “bond” means any bond, debenture,
note, or certificate or other evidence of indebtedness.
Cal. Revenue and Taxation Code - RTC § 24357.5. Section 24357.5.
No deduction shall be allowed under Section 24357 for a contribution to or for the use of an organization or trust described in Section 4948(c)(4) of the Internal Revenue Code.
Cal. Revenue and Taxation Code - RTC § 24357.6. Section 24357.6.
No deduction shall be allowed under this part for an out-of-pocket expenditure made on behalf of an organization described in Section 24359 (other than an organization described in subdivision (e) of Section 23704.5 (relating to churches, etc.)) if the expenditure is made for the purpose of influencing legislation (within the meaning of Section 23701d).
Cal. Revenue and Taxation Code - RTC § 24357.7. Section 24357.7.
(a)
(1)
For purposes of paragraph (3) of subdivision (b) of Section 24357.2, the term “qualified conservation contribution” means a contribution—
(A)
Of a qualified real property interest,
(B)
To a qualified organization,
(C)
Exclusively for
conservation purposes.
(2)
For purposes of this subdivision, the term “qualified real property interest” means any of the following interests in real property:
(i)
The entire interest of the donor other than a qualified mineral interest.
(ii)
A remainder interest.
(iii)
A restriction (granted in perpetuity) on the use which may be made of the real property.
(b)
For purposes of subdivision (a), the term “qualified organization” means an organization which:
(1)
Is described in subdivision (a) or (b) of Section 24359, or
(2)
Is described in Section 23701(d),
and—
(A)
Meets the requirements of Section 509(a)(2) of the Internal Revenue Code, or
(B)
Meets the requirements of Section 509(a)(3) of the Internal Revenue Code and is controlled by an organization described in paragraph (1) or in subparagraph (A).
(c)
For purposes of this section, the term “conservation purpose” means any of the following:
(1)
The preservation of land areas for outdoor recreation by, or the education of, the general public.
(2)
The protection of a relatively natural habitat of fish, wildlife, or plants, or similar ecosystem.
(3)
The preservation of open space (including farm land and forest land) where
that preservation is for any of the following:
(A)
For the scenic enjoyment of the general public.
(B)
Pursuant to a clearly delineated federal, state, or local governmental conservation policy, and will yield a significant public benefit.
(C)
The preservation of a historically important land area or a certified historic structure.
(d)
In the case of any contribution of a qualified real property interest, which is a restriction with respect to the exterior of a building described in paragraph (2) of subdivision (e), that contribution shall not be considered to be exclusively for conservation purposes unless all of the following conditions are met:
(1)
That interest includes a restriction
that preserves the entire exterior of the building, including the front, sides, rear, and height of the building, and prohibits any change in the exterior of the building that is inconsistent with the historical character of that exterior.
(2)
The donor and donee enter into a written agreement certifying, under penalty of perjury, that the donee is a qualified organization, as defined in subdivision (b), with a purpose of environmental protection, land conservation, and open-space preservation, and has the resources to manage and enforce the restriction and a commitment to do so.
(3)
In the case of any contribution made in a taxable year beginning on or after January 1, 2010, the taxpayer includes with the taxpayer’s return for the taxable year of the contribution all of the following information:
(A)
A qualified
appraisal, within the meaning of Section 170(f)(11)(E) of the Internal Revenue Code, of the qualified property interest.
(B)
Photographs of the entire exterior of the building.
(C)
A description of all restrictions on the development of the building.
(e)
The term “certified historic structure” means either of the following:
(1)
Any building, structure, or land area that is listed in the National Register.
(2)
(A)
Any building that is located in a registered historic district (as defined in Section 47(c)(3)(B) of the Internal Revenue Code) and is certified by the Secretary of the Interior to the secretary as being of historic significance to the district.
(B)
A building, structure, or land area satisfies the requirements of subparagraph (A) if it satisfies those requirements either at the time of the transfer or on the due date (including extensions) for filing the transferor’s return under this part for the taxable year in which the transfer is made.
(f)
For purposes of this section:
(1)
A contribution shall not be treated as exclusively for conservation purposes unless the conservation purpose is protected in perpetuity.
(2)
(A)
Except as provided in subparagraph (B), in the case of a contribution of any interest where there is a retention of a qualified mineral interest, this subdivision shall not be treated as met if at any time there may be extraction or removal of minerals by any
surface mining method.
(B)
With respect to any contribution of property in which the ownership of the surface estate and mineral interests has been and remains separated, paragraph (1) shall be treated as met if the probability of surface mining occurring on that property is so remote as to be negligible.
(g)
For purposes of this section, the term “qualified mineral interest” means either of the following:
(1)
Subsurface oil, gas, or other minerals.
(2)
The right to access to those minerals.
(h)
The amendments made to this section by the act adding this subdivision shall apply to contributions made on or after January 1, 2010.
Cal. Revenue and Taxation Code - RTC § 24357.8. Section 24357.8.
(a)
In the case of a qualified research contribution, the amount otherwise allowed as a deduction under Section 24357, shall be reduced by that amount of the reduction provided by Section 24357.1 which is no greater than the sum of the following:
(1)
One-half of the amount computed pursuant to Section 24357.1 (computed without regard to this paragraph).
(2)
The amount (if any) by which the charitable
contribution deduction under this section for any qualified research contribution (computed by taking into account the amount determined by paragraph (1), but without regard to this paragraph) exceeds twice the basis of the property.
(b)
For purposes of this section, “qualified research contribution” means a charitable contribution by a taxpayer of tangible personal property described in paragraph (1) of Section 1221 of the Internal Revenue Code, but only if all of the following conditions are met:
(1)
The contribution is to an educational organization which is described in subsection (b)(1)(A)(ii) of Section 170 of the Internal Revenue Code and which is an institution of higher education (as defined in Section 3304(f) of the Internal Revenue Code of 1954) in California.
(2)
The contribution is made not later than
two years after the date the construction of the property is substantially completed.
(3)
The original use of the property is by the donee.
(4)
The property is scientific equipment or apparatus substantially all of the use of which by the donee is for research or experimentation (within the meaning of Section 24365), or for research training, in physical, applied, or biological sciences, or for instructional purposes.
(5)
The property is not transferred by the donee in exchange for money, other property, or services.
(6)
The taxpayer receives from the donee a written statement representing that its use and disposition of the property will be in accordance with this section, and with respect to property substantially all of the use of which is for
instructional purposes, the taxpayer receives from the donee a written statement representing that the property will be used as an integral part of the instructional program. In the case of a computer, the statement shall also represent that the donee has acquired or will acquire, necessary basic operational software and the means to provide trained staff to utilize the property.
(7)
The contribution is made on or after July 1, 1983, and on or before December 31, 1993.
(8)
The taxpayer shall report to the Franchise Tax Board, on forms prescribed by the board, the name and address of the recipient educational organization, a description of the qualified charitable contribution, the fair market value of the contribution, and the date the contribution was made. The taxpayer shall forward a copy of the forms, along with the written statements prescribed in paragraph (6), to the
following:
(A)
The President of the University of California, in the case of contributions to institutions within the University of California system.
(B)
California Postsecondary Education Commission, in the case of contributions to private institutions.
(C)
The Chancellor of the California State University, in the case of contributions to institutions within the California State University system.
(D)
The Chancellor of the California Community Colleges, in the case of contributions to institutions within the California Community College system.
(c)
For purposes of this section, the term “taxpayer” shall not include a service organization (as defined in Section 414(m)(3) of the Internal
Revenue Code ).
Cal. Revenue and Taxation Code - RTC § 24357.9. Section 24357.9.
(a)
In the case of a qualified computer contribution, the amount otherwise allowed as a deduction under Section 24357 shall be reduced by that amount of the reduction provided by Section 24357.1 that is no greater than the sum of the following:
(1)
One-half of the amount computed pursuant to Section 24357.1 (computed without regard to this paragraph).
(2)
The amount (if any) by which the charitable
contribution deduction under this section for any qualified computer contribution (computed by taking into account the amount determined by paragraph (1), but without regard to this paragraph) exceeds twice the basis of the property.
(b)
For purposes of this section, the term “qualified computer contribution” means a charitable contribution by a corporation of any computer technology or equipment, but only if all of the following apply:
(1)
The contribution is to either of the following:
(A)
An educational organization described in Section 170(b)(1)(A)(ii) of the Internal Revenue Code.
(B)
An entity described in Section 23701d and exempt from tax under Section 23701 (other than an entity described in subparagraph (A)) that is organized primarily for
purposes of supporting elementary and secondary education in California.
(C)
A public library (as described in Section 170(e)(6)(B)(i)(III) of the Internal Revenue Code).
(2)
The contribution is made not later than three years after the date the taxpayer acquired the property (or in the case of property constructed by the taxpayer, the date the construction of the property is substantially completed).
(3)
The original use of the property is by the donor or the donee.
(4)
Substantially all of the use of the property by the donee is for use within California for educational purposes in any of the grades K through 12 that are related to the purpose or function of the organization or entity.
(5)
The property is not transferred by the donee in exchange for money, other property, or services, except for shipping, installation, and transfer of costs.
(6)
The property will fit productively into the entity’s educational plan.
(7)
The entity’s use and disposition of the property will be in accordance with paragraphs (4) and (5).
(8)
The property meets the standards, if any, as the Secretary of the Treasury may have prescribed by regulation under Section 170(e)(6) of the Internal Revenue Code to assure that the property meets minimum functionality and suitability standards for educational purposes.
(c)
A contribution by a corporation of any computer technology or equipment to a private foundation (as defined in Section 509 of the
Internal Revenue Code) shall be treated as a qualified computer contribution for purposes of this section if both of the following apply:
(1)
The contribution to the private foundation satisfies the requirements of paragraphs (2) and (5) of subdivision (b).
(2)
Within 30 days after that contribution, the private foundation does both of the following:
(A)
Contributes the property to an entity described in paragraph (1) of subdivision (b) that satisfies the requirements of paragraphs (4) to (7), inclusive, of subdivision (b).
(B)
Notifies the donor of that contribution.
(d)
In the case of property that is reacquired by the person who constructed the property, both of the following shall
apply:
(1)
Paragraph (2) of subdivision (b) shall be applied to a contribution of that property by that person by taking into account the date that the original construction of the property was substantially completed.
(2)
Paragraph (3) of subdivision (b) shall not apply to that contribution.
(e)
For purposes of this section, property shall be treated as constructed by the taxpayer only if the cost of the parts used in the construction of that property (other than parts manufactured by the taxpayer or a related person) do not exceed 50 percent of the taxpayer’s basis in that property.
(f)
For purposes of this section:
(1)
“Computer technology or equipment” means computer software (as
defined by Section 197(e)(3)(B) of the Internal Revenue Code), computer or peripheral equipment (as defined by Section 168(i)(2)(B) of the Internal Revenue Code), and fiber-optic cable related to computer use.
(2)
“Corporation” shall not include any of the following:
(A)
An “S corporation.”
(B)
A personal holding company (as defined in Section 542 of the Internal Revenue Code).
(C)
A service organization (as defined in Section 414(m)(3) of the Internal Revenue Code).
(g)
(1)
This section shall not apply to any contribution made during any taxable year beginning on or after January 1, 2000, and before December 31, 2001.
(2)
This section shall not apply to any contributions made during any taxable year beginning after December 31, 2003.
Cal. Revenue and Taxation Code - RTC § 24357.10. Section 24357.10.
(a)
For purposes of Section 24357, 80 percent of any amount described in subdivision (b) shall be treated as a charitable contribution.
(b)
For purposes of subdivision (a), an amount is described in this subdivision if each of the following applies:
(1)
The amount is paid by the taxpayer to or for the benefit of an educational organization which is:
(A)
Described in
Section 170 (b)(1)(A)(ii) of the Internal Revenue Code.
(B)
An institution of higher education as defined in Section 3304(f) of the Internal Revenue Code.
(2)
The amount would be allowable as a deduction under this section but for the fact that the taxpayer receives (directly or indirectly) as a result of paying the amount the right to purchase tickets for seating at an athletic event in an athletic stadium of the institution.
(c)
If any portion of a payment is for the purchase of the tickets, the portion and the remaining portion (if any) of the payment shall be treated as separate amounts for purposes of this section.
Cal. Revenue and Taxation Code - RTC § 24358. Section 24358.
(a)
In the case of a corporation, the total deductions under Section 24357 for any taxable year, other than for contributions to which subdivision (b) applies, shall not exceed 10 percent of the taxpayer’s net income computed without regard to any of the following:
(1)
Subdivision (e) of Section 23802.
(2)
Sections 24357 to 24359, inclusive.
(3)
Article 2 (commencing with Section 24401) of Chapter 7 (except Sections 24407 to 24409, inclusive).
(b)
(1)
Section 170(b)(2)(B) of the
Internal Revenue Code, relating to qualified conservation contributions by certain corporate farmers and ranchers, shall apply, except as otherwise provided.
(2)
The phrase “made on or after January 1, 2010,” shall be substituted for “made after the date of the enactment of this subparagraph” in Section 170(b)(2)(B)(i)(II) of the Internal Revenue Code.
(3)
Section 170(b)(2)(B)(iii) of the Internal Revenue Code, as it read on January 1, 2015, shall apply.
(c)
Section 170(b)(2)(C) of the Internal Revenue Code, relating to qualified conservation contributions by certain Native Corporations, shall not apply, except as otherwise provided.
(d)
Section 170(d)(2) of
the Internal Revenue Code, relating to corporations, shall apply with respect to excess contributions made during taxable years beginning on or after January 1, 1996.
Cal. Revenue and Taxation Code - RTC § 24359. Section 24359.
For purposes of Sections 24357 to 24359, inclusive, the term “charitable contribution” means a contribution or gift to or for the use of—
(a)
A state, a possession of the United States, or any political subdivision of any of the foregoing, or the United States or the District of Columbia, but only if the contribution or gift is made for exclusively public purposes.
(b)
A corporation, trust, or community chest, fund, or
foundation—
(1)
Created or organized in the United States or in any possession thereof, or under the law of the United States, any state, the District of Columbia, or any possession of the United States;
(2)
Organized and operated exclusively for religious, charitable, scientific, literary, or educational purposes or to foster national or international amateur sports competition (but only if no part of its activities involve the provision of athletic facilities or equipment), or for the prevention of cruelty to children or animals;
(3)
No part of the net earnings of which inures to the benefit of any private shareholder or individual; and
(4)
Which is not disqualified for tax exemption under Section 23701d by reason of attempting to influence
legislation, and which does not participate in, or intervene in (including the publishing or distributing of statements), any political campaign on behalf of (or in opposition to) any candidate for public office.
A contribution or gift by a corporation to a trust, chest, fund, or foundation shall be deductible by reason of this section only if it is to be used within the United States or any of its possessions exclusively for purposes specified in paragraph (2). Rules similar to the rules of subdivision (b) of Section 23701d shall apply for purposes of this section.
(c)
A post or organization of war veterans, or an auxiliary unit or society of, or trust or foundation for, any post or organization of war veterans—
(1)
Organized in the United States or any of its possessions, and
(2)
No part of the net earnings of which inures to the benefit of any private shareholder or individual.
(d)
A cemetery company owned and operated exclusively for the benefit of its members, or any corporation chartered solely for burial purposes as a cemetery corporation and not permitted by its charter to engage in any business not necessarily incident to that purpose, if the company or corporation is not operated for profit and no part of the net earnings of the company or corporation inures to the benefit of any private shareholder or individual.
Cal. Revenue and Taxation Code - RTC § 24359.1. Section 24359.1.
Notwithstanding any other provision of law, any credit or deduction allowed by Section 23606 or 24357.8 shall not be disallowed on the basis that the contribution is made for the primary or incidental purpose of benefiting the donor in any of the following ways:
(a)
Encouraging institutions to interest and train students to use a computer, scientific equipment, or apparatus, thereby enlarging the future potential market by developing prospective purchases.
(b)
Developing and maintaining a favorable public image.
Cal. Revenue and Taxation Code - RTC § 24360. Section 24360.
In the case of any bond, as defined in Section 24363, the following rules shall apply to the amortizable bond premium (determined under Section 24361 on the bond):
(a)
In the case of a bond, the amount of the amortizable bond premium for the taxable year shall be allowed as a deduction.
(b)
In the case of any bond the interest on which is excludable from gross income under Chapter 3 (commencing with Section 23501), no deduction
shall be allowed for the amortizable bond premium for the taxable year.
Cal. Revenue and Taxation Code - RTC § 24361. Section 24361.
(a)
For purposes of subsection (b), the amount of bond premium, in the case of the holder of any bond, shall be determined—
(1)
With reference to the amount of the basis (for determining loss on sale or exchange) of such bond;
(2)
With reference to the amount payable on maturity or on earlier call date; and
(3)
With adjustments proper to
reflect unamortized bond premium, with respect to the bond, for the period before the date as of which Section 24360 becomes applicable with respect to the taxpayer with respect to such bond.
In no case shall the amount of bond premium on a convertible bond include any amount attributable to the conversion features of the bond.
(b)
The amortizable bond premium of the taxable year shall be the amount of the bond premium attributable to such year. In the case of a bond described in Section 24362(a) issued after January 22, 1951, and acquired after January 22, 1954, which has a call date not more than three years after the date of such issue, the amount of bond premium attributable to the taxable year in which the bond is called shall include an amount equal to the excess of the amount of the adjusted basis (for determining loss on sale or exchange) of such bond as of the beginning of the taxable year
over the amount received on redemption of the bond or (if greater) the amount payable on maturity.
(c)
(1)
Except as provided in regulations, the determinations required under subdivisions (a) and (b) shall be made on the basis of the taxpayer’s yield to maturity determined by—
(A)
Using the taxpayer’s basis for purposes of determining loss on sale or exchange of the obligation, and
(B)
Compounding at the close of each accrual period (as defined in Section 1272(a)(5) of the Internal Revenue Code).
(2)
For purposes of paragraph (1), if the amount payable on an earlier call date is used under subparagraph (B) of paragraph (1) in determining the amortizable bond premium attributable to the period before the earlier call date, that
bond shall be treated as maturing on that date for the amount so payable and then reissued on that date for the amount so payable.
Cal. Revenue and Taxation Code - RTC § 24362. Section 24362.
(a)
Sections 24360 to 24363.5, inclusive, shall apply to the bonds only if the taxpayer has elected to have these sections apply; in the case of any taxpayer, bonds the interest on which is not excludable from gross income.
(b)
The election authorized under this section shall be made in accordance with such regulations as the Franchise Tax Board shall prescribe. If such election is made with respect to any bond (described in subsection (a)) of the taxpayer, it shall also
apply to all such bonds held by the taxpayer at the beginning of the first taxable year to which the election applies and to all such bonds thereafter acquired by him and shall be binding for all subsequent taxable years with respect to all such bonds of the taxpayer, unless, on application by the taxpayer, the Franchise Tax Board permits him, subject to such conditions as the Franchise Tax Board deems necessary, to revoke such election.
Cal. Revenue and Taxation Code - RTC § 24363. Section 24363.
For purposes of Sections 24360 to 24363.5, inclusive, the term “bond” means any bond, debenture, note, or certificate or other evidence of indebtedness, but does not include any such obligation which constitutes stock in trade of the taxpayer or any such obligation of a kind which would properly be included in the inventory of the taxpayer if on hand at the close of the taxable year, or any such obligation held by the taxpayer primarily for sale to customers in the ordinary course of its trade or business.
Cal. Revenue and Taxation Code - RTC § 24363.5. Section 24363.5.
(a)
Except as provided in regulations, in the case of any taxable bond each of the following shall apply:
(1)
The amount of any bond premium shall be allocated among the interest payments on the bond under rules similar to the rules of subdivision (c) of Section 24361.
(2)
In lieu of any deduction under Section 24360, the amount of any premium so allocated to any interest payment shall be applied against (and operate to reduce)
the amount of the interest payment.
(b)
For purposes of this section, the term “taxable bond” means any bond the interest of which is not excludable from gross income.
Cal. Revenue and Taxation Code - RTC § 24364. Section 24364.
Notwithstanding Article 3 (commencing with Section 24421), all expenditures (other than expenditures for the purchase of land or depreciable property or for the acquisition of circulation through the purchase of any part of the business of another publisher of a newspaper, magazine, or other periodical) to establish, maintain, or increase the circulation of a newspaper, magazine, or other periodical shall be allowed as a deduction. However, the deduction shall not be allowed with respect to the portion of such expenditures as, under regulations prescribed
by the Franchise Tax Board, is chargeable to capital account if the taxpayer elects, in accordance with those regulations, to treat that portion as so chargeable. The election, if made, shall be for the total amount of that portion of the expenditures which is so chargeable to capital account, and shall be binding for all subsequent taxable years unless, upon application by the taxpayer, the Franchise Tax Board permits a revocation of the election subject to such conditions as it deems necessary.
Cal. Revenue and Taxation Code - RTC § 24365. Section 24365.
(a)
Section 174 of the Internal Revenue Code, relating to research and experimental expenditures, shall apply, except as otherwise provided.
(b)
Section 174(b) of the Internal Revenue Code is modified to refer to subdivision (a) of Section 24916 in lieu of Section 1016(a)(1) of the Internal Revenue Code.
(c)
Section 174(c) of the Internal Revenue Code is modified to refer to Sections 24349 to 24356, inclusive, in lieu of Section 167 of the Internal Revenue Code.
(d)
The amendments made by Section 13206(a) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97),
relating to amortization of research and experimental expenditures, for taxable years beginning on or after January 1, 2022, shall not apply.
Cal. Revenue and Taxation Code - RTC § 24368.1. Section 24368.1.
(a)
Section 167(e) of the Internal Revenue Code, relating to certain term interests not depreciable, shall apply.
(b)
The provisions of Section 7622(b) of Public Law 101-239, relating to the effective date of changes in treatment of transfers of franchises, trademarks, and trade names, shall apply.
(c)
The provisions of Section 7645(b) of Public Law 101-239, relating to the effective date of disallowance of depreciation for
certain term interests, shall apply.
Cal. Revenue and Taxation Code - RTC § 24369. Section 24369.
Section 175 of the Internal Revenue Code, relating to soil and water conservation expenditures, shall apply, except as otherwise provided.
Cal. Revenue and Taxation Code - RTC § 24369.4. Section 24369.4.
(a)
Section 198 of the Internal Revenue Code, relating to expensing of environmental remediation costs, shall apply, except as otherwise provided.
(b)
Section 198(b)(2) is modified to refer to Sections 24349 to 24355, inclusive, in lieu of Section 167 of the Internal Revenue Code.
(c)
Section 198(f) is modified to refer to Section 24442 in lieu of Section 280B of the Internal Revenue Code.
(d)
For expenditures paid or incurred before January 1, 2004, each of the following shall apply:
(1)
If a taxpayer has, at any time, made an election for federal purposes under Section 198(a) of the Internal Revenue Code to have Section 198 of the Internal Revenue Code apply to a qualified environmental remediation expenditure, Section 198 of the Internal Revenue Code shall apply to that qualified environmental remediation expenditure for state purposes, a separate election for state purposes shall not be allowed under paragraph (3) of subdivision (e) of Section 23051.5, and the federal election shall be binding for purposes of this part.
(2)
If a taxpayer fails to make an election for federal purposes under Section 198(a) of the Internal Revenue Code to have Section 198 of the Internal Revenue Code apply to a qualified
environmental remediation expenditure, an election under Section 198(a) of the Internal Revenue Code shall not be allowed for state purposes, Section 198 of the Internal Revenue Code shall not apply to that qualified environmental remediation expenditure for state purposes, and a separate election for state purposes shall not be allowed under paragraph (3) of subdivision (e) of Section 23051.5.
(e)
No inference as to the proper treatment for purposes of this part of qualified environmental remediation expenditures for periods before the enactment of this section shall be made.
(f)
Section 198(h) of the Internal Revenue Code, relating to termination, shall not apply.
(g)
Section 198 of the Internal Revenue Code, relating to expensing of environmental remediation costs, shall not apply to expenditures paid or incurred
after December 31, 2003.
Cal. Revenue and Taxation Code - RTC § 24370. Section 24370.
There shall also be allowed as a deduction, under Chapter 2 of this part, in the case of a mutual savings bank, the entire amount of interest paid to depositors possessing no proprietary interest in the institution or in its surplus, and interest on their deposits to members possessing a proprietary interest in the institution or in its surplus at a rate determined by the Commissioner of Financial Institutions to be the going rate of interest upon savings deposits in this state during the calendar year preceding the taxable year, such rate to be certified
by the Commissioner of Financial Institutions to the Franchise Tax Board on or before the first day of March of each year.
Cal. Revenue and Taxation Code - RTC § 24372.3. Section 24372.3.
(a)
Section 169 of the Internal Revenue Code, relating to amortization of pollution control facilities, shall apply, except as otherwise provided.
(b)
The deduction allowed by this section shall be available only with respect to facilities located in this state.
(c)
The “state certifying authority,” as defined in Section 169(d)(2) of the Internal Revenue Code, means the State Air Resources Board, in the
case of air pollution, and the State Water Resources Control Board, in the case of water pollution.
Cal. Revenue and Taxation Code - RTC § 24372.5. Section 24372.5.
(a)
Section 194 of the Internal Revenue Code, relating to amortization of reforestation expenditures, shall apply, except as otherwise provided.
(b)
The deduction allowed by this section shall be available only with respect to qualified timber property located in this state.
Cal. Revenue and Taxation Code - RTC § 24373. Section 24373.
Section 178 of the Internal Revenue Code, relating to the amortization of cost of acquiring a lease, shall apply.
Cal. Revenue and Taxation Code - RTC § 24377. Section 24377.
(a)
A taxpayer engaged in the business of farming may elect to treat as expenses which are not chargeable to capital account expenditures (otherwise chargeable to capital account) which are paid or incurred by it during the taxable year for the purchase or acquisition of fertilizer, lime, ground limestone, marl, or other materials to enrich, neutralize, or condition land used in farming, or for the application of such materials to such land. The expenditures so treated shall be allowed as a deduction.
(b)
For purposes of subdivision (a), the term “land used in farming” means land used (before or simultaneously with the expenditures described in subdivision (a)) by the taxpayer or its tenant for the production of crops, fruits, or other agricultural products or for the sustenance of livestock.
(c)
The election under subdivision (a) for any taxable year shall be made within the time prescribed by law (including extensions thereof) for filing the return for that taxable year. The election shall be made in the form and manner as the Franchise Tax Board may prescribe. The election may not be revoked except with the consent of the Franchise Tax Board.
Cal. Revenue and Taxation Code - RTC § 24379. Section 24379.
Section 83 of the Internal Revenue Code, relating to property transferred in connection with performance of services, shall apply, except as otherwise provided.
Cal. Revenue and Taxation Code - RTC § 24382. Section 24382.
(a)
Section 216 of the Internal Revenue Code, relating to deduction of taxes, interest, and business depreciation by cooperative housing corporation tenant-stockholder, shall apply, except as otherwise provided.
(b)
Section 6282(b) of Public Law 100-647, relating to the effective date for distributions by cooperative housing corporations, shall apply.
Cal. Revenue and Taxation Code - RTC § 24383. Section 24383.
(a)
Every taxpayer, at the election of the taxpayer, shall be entitled to a deduction of the cost of repairing or remodeling any building, facility or transportation vehicle owned or leased by the taxpayer at the time of such repairing or remodeling, in order to permit handicapped or elderly individuals to enter or leave such building, facility or transportation vehicle, to increase the access handicapped or elderly individuals would have to such building, facility or transportation vehicle, or to allow handicapped or elderly
individuals more effective use of the building, facility or transportation vehicle, provided that the repair or remodeling meets one or more standards established pursuant to Section 4450 or 4451 of the Government Code. In the absence of such state standards, those standards established by the Secretary of the Treasury of the United States with the concurrence of the Architectural and Transportation Barriers Compliance Board shall be used. The installation of emergency egress/safe area refuge systems shall be eligible for such deductions.
(b)
The deduction authorized by this section shall be taken with respect to the taxable year in which such repairing or remodeling is completed.
(c)
The deduction provided by this section with respect to any taxable year shall be in lieu of any deduction with respect to such repairing or remodeling relating to exhaustion, wear and tear or
obsolescence. If, however, the costs of that repair or remodeling exceed the limit set forth in subdivision (g), the remaining balance may be charged to capital account.
(d)
If any building, facility or transportation vehicle is owned by more than one person, a taxpayer may deduct a portion of the costs of such repairing or remodeling apportionate to the interest in such building, facility or transportation vehicle which is owned by the taxpayer.
(e)
For purposes of this section, “building, facility or transportation vehicle” means a building, facility or transportation vehicle, or part thereof, which is intended to be used, and is actually used, by the taxpayer or the general public, in the taxpayer’s business or trade.
(f)
For purposes of this section, “handicapped individual” means any individual who has a
physical or mental disability (including, but not limited to, blindness or deafness) which for such individual constitutes or results in a functional limitation to employment, or who has any physical or mental impairment (including, but not limited to, a sight or hearing impairment) which substantially limits one or more major life activities of such individual, and “elderly individual” means an individual who is 65 years of age or older.
(g)
The deduction authorized by this section shall not exceed fifteen thousand dollars ($15,000) with respect to any taxpayer for any taxable year.
(h)
The Franchise Tax Board shall prescribe such regulations as may be necessary to carry out the provisions of this section.
(i)
This section shall apply to taxable years beginning after December 31, 1976.
(j)
(1)
The State Fire Marshal in cooperation with the Department of Rehabilitation and the Department of Aging shall adopt building standards and regulations for emergency egress/safe area refuge systems. The building standards and regulations shall include, but not be limited to, minimum requirements for safety, reliability, durability and usability. Emergency egress/safe area refuge systems that comply with the building standards and regulations adopted pursuant to this section shall be eligible for the deduction provided by this section.
(2)
It is the intent of the Legislature that this section and the building standards adopted pursuant to this section do not supersede more restrictive building standards and regulations adopted by the state and local governments.
(k)
“Emergency egress/safe
area refuge system” shall include, but not be limited to, all of the following:
(1)
A building floor divided into not less than two compartments by not less than one-hour fire-resistive construction. Each door opening in the construction shall be protected by a twenty minute fire-resistive assembly as defined in regulations of the State Fire Marshal. Duct openings shall be protected by single-blade or curtain-type fire dampers to restrict the passage of smoke or flame. The smaller of the compartmental areas shall be not less than one-fourth the floor area of the story. Each such compartment shall contain a stairway or elevator or other means of ready egress from the building.
(2)
A fire alarm system defined in regulations by the State Fire Marshal.
(3)
Use of existing exiting systems and warning devices when
practical, including, but not limited to, stairways, elevators, and fire alarms.
(4)
Accommodations for wheelchairs and all attached wheelchair equipment, as well as wheelchair occupants.
(5)
Its own power source.
Source: CA Legislative Counsel Bulk DataURL: https://downloads.leginfo.legislature.ca.gov/pubinfo_2025.zipFetched: 6/27/2026