Bill Text: CA AB1438 | 2015-2016 | Regular Session | Introduced

California Assembly Bill 1438 (Prior Session Legislation)

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 (as   No gain shall be
recognized if property, as  a result of its destruction in whole
or in part, theft, seizure,  or requisition or condemnation
or   requisition, condemnation,  threat  ,
 or imminence  thereof)   of threat, 
is compulsorily or involuntarily  converted--  
converted into any of the following: 
   (a)  Into property   Property  similar
or related in service or use to the property  so converted,
no gain shall be recognized   that was converted  .

   (b)  Into money,  Money,    and
the disposition of the converted property occurred before January 1,
1953,  no gain shall be recognized  if 
such   the  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 property  so   that 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 money  which   that  is not
so  expended (regardless  expended, regardless
 of whether  such   the  money is
received in one or more taxable years and regardless of whether or
not the money  which   that  is not so
expended constitutes  gain)   gain  .
 For 
    (c)     For  purposes of this 
subsection   section  and Section 24944, the
 term "disposition  following 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 of
 such   the  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.