Califdornia new tax laws relating to 1099 exchanges
November 19, 2016
Here's a new tax law that may give your 1031-exchange clients a good reason to buy an upleg property in California, instead of another state.
For a 1031 exchange occurring on or after January 1, 2014, a taxpayer who acquires a "like kind" property in an exchange that is located outside of California must file an information return with the Franchise Tax Board (FTB) for that taxable year and every year thereafter until the capital gain or loss from the 1031 exchange is recognized.
If a taxpayer fails to file the required information return and tax returns, the FTB may propose to assess the amount of tax, interest, and penalties due by estimating net income, including gain, from any available information.
The FTB will draft and make available the required information return, which will first come due in the 2015 filing season.
Source: Assembly Bill 92.
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