Bill Text: CA AB1438 | 2015-2016 | Regular Session | Introduced
Bill Title: Involuntary conversions.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Failed) 2016-02-01 - Died at Desk. [AB1438 Detail]
Download: California-2015-AB1438-Introduced.html
BILL NUMBER: AB 1438 INTRODUCED BILL TEXT INTRODUCED BY Assembly Member Perea FEBRUARY 27, 2015 An act to amend Section 24943 of the Revenue and Taxation Code, relating to taxation. LEGISLATIVE COUNSEL'S DIGEST AB 1438, as introduced, Perea. Involuntary conversions. The Corporation Tax Law generally provides that no gain is recognized on the involuntary conversion of property if specified conditions are met. This bill would make nonsubstantive changes to this provision. Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 24943 of the Revenue and Taxation Code is amended to read: 24943.If property (asNo gain shall be recognized if property, as a result of its destruction in whole or in part, theft, seizure,or requisition or condemnation orrequisition, condemnation, threat , or imminencethereof)of threat, is compulsorily or involuntarilyconverted--converted into any of the following: (a)Into propertyProperty similar or related in service or use to the propertyso converted, no gain shall be recognizedthat was converted . (b)Into money,Money, and the disposition of the converted property occurred before January 1, 1953,no gain shall be recognizedifsuchthe money is forthwith in good faith, under regulations prescribed by the Franchise Tax Board, expended in the acquisition of other property similar or related in service or use to the propertysothat was converted, or in the acquisition of control of a corporation owning such other property, or in the establishment of a replacement fund. If any part of the money is not so expended, the gain shall be recognized to the extent of the moneywhichthat is not soexpended (regardlessexpended, regardless of whethersuchthe money is received in one or more taxable years and regardless of whether or not the moneywhichthat is not so expended constitutesgain)gain .For(c) For purposes of thissubsectionsection and Section 24944, theterm "dispositionfollowing shall apply: (1) "Disposition of the converted property" means the destruction, theft, seizure, requisition, or condemnation of the converted property, or the sale or exchange ofsuchthe property under threat or imminence of requisition or condemnation.For purposes of this section and Section 24944, the term "control"(2) "Control" means the ownership of stock possessing at least 80 percent of the total combined voting power of all classes of stock entitled to vote and at least 80 percent of the total number of shares of all other classes of stock of the corporation.