PART 11. CORPORATION TAX LAW [23001. - 25141.]

Heading of Part 11 amended by Stats. 2001, Ch. 543, Sec. 21.

§§ 23001–25141 · 588 sections

1. CHAPTER 1. General Provisions and Definitions §§ 23001–23060 · 54 sections

   1. ARTICLE 1. General Provisions §§ 23001–23004 · 4 sections

      • § 23001 This part is known and may be cited as the Corporation Tax Law.
      • § 23002 Except where otherwise expressly provided, all of the provisions of this part are applicable to the taxes imposed respectively under Chapter 2 (commencing with…
      • § 23003 A reference made in this part by number without further identification: (a) To a division, is a reference to that division of this code. (b) To a part, is a…
      • § 23004 Whenever this part refers to “regulations of the Franchise Tax Board,” or makes similar reference, the reference authorizes the Franchise Tax Board to make…
   2. ARTICLE 2. Definitions §§ 23030–23060 · 50 sections

      • § 23030 Except where the context otherwise requires, the definitions given in this chapter govern the construction of this part.
      • § 23031 “Franchise Tax Board” means the Franchise Tax Board described in Part 10 (commencing with Section 15700) of Division 3 of Title 2 of the Government Code.…
      • § 23032 “Fiscal year” means an accounting period of twelve months or less ending on the last day of any month other than December.
      • § 23033 “Paid or incurred” and “paid or accrued” shall be construed according to the method of accounting upon the basis of which net income is computed.
      • § 23034 “State” includes the District of Columbia, and the possessions of the United States.
      • § 23035 “Counsel for the Franchise Tax Board” means attorney or attorneys appointed or employed by the Franchise Tax Board and acting subject to the approval and under…
      • § 23036 (a) (1) The term “tax” includes any of the following: (A) The tax imposed under Chapter 2 (commencing with Section 23101). (B) The tax imposed under Chapter 3…
      • § 23036.1 Notwithstanding Section 23036 or any other provision in this part to the contrary, the credit allowed by Section 23630 (relating to natural heritage) may…
      • § 23036.2 (a) Notwithstanding any provision of this part or Part 10.2 (commencing with Section 18401) to the contrary, for each taxable year beginning on or after…
      • § 23036.3 (a) Notwithstanding any provision of this part or Part 10.2 (commencing with Section 18401) to the contrary, except as provided in subdivision (d), for…
      • § 23036.4 (a) Notwithstanding any provision of this part or Part 10.2 (commencing with Section 18401) to the contrary, except as provided in subdivision (d), for…
      • § 23036.5 (a) (1) For taxable years beginning on or after January 1, 2024, and before January 1, 2030, a taxpayer may make an election to receive an annual refundable…
      • § 23036.6 (a) Notwithstanding any provision of this part or Part 10.2 (commencing with Section 18401) to the contrary, except as provided in subdivision (d), for…
      • § 23037 “Taxpayer” means any person subject to the tax imposed under Chapter 2 (commencing with Section 23101), Chapter 2.5 (commencing with Section 23400), or Chapter…
      • § 23038 (a) “Corporation” includes every corporation except corporations expressly exempt from the tax by this part or the Constitution of this state. (b) (1) For the…
      • § 23038.5 (a) Section 7704 of the Internal Revenue Code, relating to certain publicly traded partnerships treated as corporations, shall apply, except as otherwise…
      • § 23039 “Bank” includes national banking associations. “Bank” includes any “bank” operated by any receiver, liquidator, referee, trustee or other officers or agents…
      • § 23040 Income derived from or attributable to sources within this State includes income from tangible or intangible property located or having a situs in this State…
      • § 23040.1 (a) Notwithstanding Sections 23040 and 25101, income derived from or attributable to sources within this state shall not include: (1) The distributive share of…
      • § 23041 “Taxable year” means: (a) For the purposes of the tax imposed under Chapter 2 (commencing with Section 23101), the calendar year, or the fiscal year for which…
      • § 23042 (a) For taxable years beginning prior to January 1, 2000, and the first taxable year beginning on or after January 1, 2000, “income year” means: (1) For the…
      • § 23043.5 For purposes of this part, in determining the amount of gain or loss (or deemed gain or loss) with respect to any property, Section 7701(g) of the Internal…
      • § 23044 “International banking facility” means a facility represented by a set of asset and liability accounts segregated on the books and records of a commercial…
      • § 23045 For purposes of this part: (a) Section 7702 of the Internal Revenue Code, relating to life insurance contract defined, shall apply, except as otherwise…
      • § 23045.1 For purposes of this part, the term “substituted basis property” has the same meaning given that term by Section 7701(a)(42) of the Internal Revenue Code.
      • § 23045.2 For purposes of this part, the term “transferred basis property” has the same meaning given that term by Section 7701(a)(43) of the Internal Revenue Code,…
      • § 23045.3 For purposes of this part, the term “exchanged basis property” has the same meaning given that term by Section 7701(a)(44) of the Internal Revenue Code, except…
      • § 23045.4 For purposes of this part, the term “nonrecognition transaction” has the same meaning given that term by Section 7701(a)(45) of the Internal Revenue Code,…
      • § 23045.5 For purposes of this part, the term “domestic building and loan association” has the same meaning given that term by Section 7701(a)(19) of the Internal…
      • § 23045.6 (a) For the purposes of this part, except as otherwise provided, the determination of whether an individual is an employee shall be governed by of Article 1.5…
      • § 23046 Section 7701(a)(46) of the Internal Revenue Code, relating to determination of whether there is a collective bargaining agreement, shall apply, except as…
      • § 23046.5 (a) Section 7701(n) of the Internal Revenue Code, relating to convention or association of churches, shall apply, except as otherwise provided. (b) The phrase…
      • § 23047 Section 7701(e) of the Internal Revenue Code, relating to treatment of certain contracts for providing services, etc., shall apply, except as otherwise…
      • § 23048 Taxable mortgage pools shall be defined and treated in accordance with Section 7701(i) of the Internal Revenue Code, except as otherwise provided.
      • § 23049 Section 7701(h) of the Internal Revenue Code, relating to motor vehicle operating leases, shall apply, except as otherwise provided.
      • § 23049.1 Section 64 of the Internal Revenue Code, relating to the definition of ordinary income, shall apply.
      • § 23049.2 Section 65 of the Internal Revenue Code, relating to the definition of ordinary loss, shall apply.
      • § 23050 Definitions, other than general definitions, are set forth in the chapter to which specifically applicable.
      • § 23051 The term “Bank and Corporation Tax Law of 1954,” means Part 11 of Division 2 of the Revenue and Taxation Code as enacted by Statutes 1949, Chapter 557, and as…
      • § 23051.5 (a) (1) Unless otherwise specifically provided, the terms “Internal Revenue Code,” “Internal Revenue Code of 1954,” or “Internal Revenue Code of 1986,” for…
      • § 23051.7 (a) The enactment of the act adding this section to the code shall not deprive any taxpayer of any carryover of a credit, excess contribution, or loss to which…
      • § 23052 The provisions of this code insofar as they are substantially the same as existing statutory provisions relating to the same subject matter shall be construed…
      • § 23053 The repeal of any provision of the Bank and Corporation Tax Law shall not affect any act done or any right accruing or accrued, or any suit or proceeding had…
      • § 23054 For the purpose of applying the Bank and Corporation Tax Law of 1954 or the Bank and Corporation Tax Law as herein enacted to any period, any reference in…
      • § 23055 Any provision of this part which refers to the application of any portion of this part to a prior period (or which depends upon the application to a prior…
      • § 23056 Division, part, chapter, article, section and subsection headings contained herein shall not be deemed to govern, limit, modify, or in any manner affect the…
      • § 23057 If any chapter, article, section, subsection, clause, sentence or phrase of this part which is reasonably separable from the remaining portions of this part,…
      • § 23058 Unless otherwise specifically provided therein, the provisions of any act: (a) That affect the imposition or computation of tax, penalties, or the allowance of…
      • § 23059 Unless expressly otherwise provided in this part, any notice may be given by first-class mail postage prepaid.
      • § 23060 Provisions in other codes or General Law Statutes that are related to this part include all of the following: (a) Chapter 20.6 (commencing with Section 9891)…
2. CHAPTER 2. The Corporation Franchise Tax §§ 23101–23364a · 65 sections

   1. ARTICLE 1. Definitions and General Provisions §§ 23101–23114 · 6 sections

      • § 23101 (a) “Doing business” means actively engaging in any transaction for the purpose of financial or pecuniary gain or profit. (b) For taxable years beginning on or…
      • § 23101.5 (a) The Franchise Tax Board may determine that a corporation is not doing business in this state for purposes of this chapter or deriving income from sources…
      • § 23102 Any corporation holding or organized to hold stock or bonds of any other corporation or corporations, and not trading in stock or bonds or other securities…
      • § 23104 (a) For purposes of this part only, any corporation that is not incorporated under the laws of this state and whose sole activity in this state is engaging in…
      • § 23113 The tax imposed under this chapter shall attach whether a taxpayer has a taxable year of twelve months or less.
      • § 23114 (a) A corporation shall not be subject to the taxes imposed by this chapter if the corporation did no business in this state during the taxable year and the…
   2. ARTICLE 2. Tax on General Corporations §§ 23151–23156 · 7 sections

      • § 23151 (a) With the exception of banks and financial corporations, every corporation doing business within the limits of this state and not expressly exempted from…
      • § 23151.1 Notwithstanding Section 23151, every corporation (except banks and financial corporations) doing business within the limits of this state and not exempted from…
      • § 23151.2 Notwithstanding Section 23151, every corporation (except banks and financial corporations) not exempted from taxation by the provisions of the Constitution of…
      • § 23153 (a) Every corporation described in subdivision (b) shall be subject to the minimum franchise tax specified in subdivision (d) from the earlier of the date of…
      • § 23154 The tax imposed under this chapter is in lieu of all ad valorem taxes and assessments of every kind and nature upon the general corporate franchises of the…
      • § 23155 In the event that taxes, interest and penalties have been or shall be assessed against, paid by or collected from a taxpayer under a subdivision of Section…
      • § 23156 (a) The Franchise Tax Board shall abate, upon written request by a qualified nonprofit corporation, unpaid qualified taxes, interest, and penalties for the…
   3. ARTICLE 3. Tax on Banks and Financial Corporations §§ 23181–23188 · 8 sections

      • § 23181 (a) Except as otherwise provided herein, an annual tax is hereby imposed upon every bank doing business within the limits of this state according to or…
      • § 23182 The tax imposed under this part upon banks and financial corporations is in lieu of all other taxes and licenses, state, county and municipal, upon the said…
      • § 23183 (a) For taxable years beginning before January 1, 2000, an annual tax is hereby imposed upon every financial corporation doing business within the limits of…
      • § 23183.1 Notwithstanding Section 23183, every financial corporation doing business within the limits of this state and not exempted from taxation by the Constitution of…
      • § 23183.2 Notwithstanding Section 23183, every financial corporation not exempted from taxation by the provisions of the Constitution of this state or by this part which…
      • § 23186 For taxable years ending on or after December 31, 1995, the rate of tax on banks and financial corporations shall be the rate of tax specified in Section…
      • § 23187 Upon the request of a taxpayer under this chapter, the tax-collecting officer of a county, city, or other political subdivision of this State, shall furnish an…
      • § 23188 In the event that taxes, interest, or penalties have been or shall be assessed against, paid by, or collected from a taxpayer under a subdivision of Section…
   4. ARTICLE 3.5. Credit for Prepaid Tax §§ 23201–23204 · 4 sections

      • § 23201 (a) In the case of a taxpayer whose tax for the first taxable year was computed under Sections 23222 to 23224, inclusive (or corresponding sections of prior…
      • § 23202 (a) In the case of a taxpayer who has been a transferee in a reorganization to which Sections 23251 to 23254, inclusive, or corresponding sections of prior…
      • § 23203 The credits provided by Sections 23201 and 23202 shall be allowable only upon submission by the taxpayer of evidence establishing to the satisfaction of the…
      • § 23204 (a) No credit under this article shall be allowed or made after four years from the last day prescribed for filing the return for the taxable year of…
   5. ARTICLE 4. Commencing Corporations §§ 23221–23226 · 8 sections

      • § 23221 (a) Any credit union that incorporates under the laws of this state or qualifies to transact intrastate business in this state shall thereupon prepay a tax of…
      • § 23222 (a) If a taxpayer commences to do business in this state during its first taxable year its tax for that year shall be adjusted upon the basis of the net income…
      • § 23222a In every case in which the second or succeeding taxable years of a commencing taxpayer constitute a period of less than 12 months or in which the taxpayer does…
      • § 23223 (a) When any taxpayer commences to do business in this state for the first time in any taxable year other than the year of incorporation or qualification, its…
      • § 23224 (a) Notwithstanding the provisions of Section 23222 and Section 23223, if a corporation, which has been subject to the provisions of Chapter 3 commences to do…
      • § 23224.5 (a) After December 31, 1971, if a corporation which has been subject to the provisions of Chapter 3 commences to do business in this state, such corporation…
      • § 23225 The adjusted tax, as provided in Sections 23222 to 23224.5, inclusive, for any taxable year in excess of the prepayment for that year, shall be due and payable…
      • § 23226 In the case of the taxpayer taxable in the manner provided in Sections 23222 to 23224.5, inclusive, reporting income from any source on a deferred basis, the…
   6. ARTICLE 5. Reorganized Corporations §§ 23251–23253 · 2 sections

      • § 23251 The term “reorganization,” as used in this chapter, shall have the same meaning as that term is defined in Section 368 of the Internal Revenue Code.
      • § 23253 Section 381(b) of the Internal Revenue Code, relating to operating rules, shall apply in determining the close of the taxable year. If a short period year is…
   7. ARTICLE 6. Corporations Resuming Business §§ 23281–23282 · 2 sections

      • § 23281 (a) (1) When a taxpayer ceases to do business within the state during any taxable year and does not dissolve or withdraw from the state during that year, and…
      • § 23282 (a) The tax imposed upon any taxpayer which has suffered the suspension or forfeiture provided in Section 23301, and which revives in any taxable year other…
   8. ARTICLE 7. Suspension and Revivor §§ 23301–23311 · 18 sections

      • § 23301 Except for the purposes of filing an application for exempt status or amending the articles of incorporation or organization as necessary either to perfect…
      • § 23301.5 Except for the purposes of filing an application for exempt status or amending the articles of incorporation or organization as necessary either to perfect…
      • § 23301.6 Sections 23301, 23301.5, and 23775 shall apply to a foreign taxpayer only if the taxpayer is qualified or registered to do business in California. A taxpayer…
      • § 23302 (a) Forfeiture or suspension of a taxpayer’s powers, rights, and privileges pursuant to Section 23301, 23301.5, or 23775 shall occur and become effective only…
      • § 23303 Notwithstanding the provisions of Section 23301 or 23301.5, any taxpayer that transacts business or receives income within the period of its suspension or…
      • § 23304.1 (a) Every contract made in this state by a taxpayer during the time that the taxpayer’s powers, rights, and privileges are suspended or forfeited pursuant to…
      • § 23304.5 A party that has the right to declare a contract to be voidable pursuant to Section 23304.1 may exercise that right only in a lawsuit brought by either party…
      • § 23305 Any taxpayer which has suffered the suspension or forfeiture provided for in Section 23301 or 23301.5 may be relieved therefrom upon making application…
      • § 23305.1 (a) A taxpayer may make application to the Franchise Tax Board for relief from the voidability provisions of Section 23304.1. To be relieved from voidability,…
      • § 23305.2 Notwithstanding Sections 23305 and 23305.1 that require a taxpayer to pay any liability to the Franchise Tax Board as a condition to revivor or relief from…
      • § 23305.5 For purposes of this article: (a) “Taxpayer” means either: (1) A corporation subject to tax under this chapter. (2) A business entity organized under a statute…
      • § 23305a Before the certificate of revivor is issued by the Franchise Tax Board, it shall obtain from the Secretary of State an endorsement upon the application of the…
      • § 23305b Notwithstanding Section 23305, the Franchise Tax Board may revive a taxpayer to good standing without full payment of the taxes, penalties, and interest due if…
      • § 23305c (a) Upon issuance of the certificate of revivor, the Franchise Tax Board shall transmit to the Secretary of State the revived taxpayer’s name and its entity…
      • § 23305d A certificate of suspension or forfeiture from the Franchise Tax Board setting forth that the suspended or forfeited taxpayer has been notified of its…
      • § 23305e (a) The Franchise Tax Board may provide letters of good standing, verifying a taxpayer’s status for doing business in California, at a charge reflecting the…
      • § 23310 (a) The Franchise Tax Board may abate, upon written request by a qualified entity, unpaid qualified taxes, interest, and penalties for the taxable years in…
      • § 23311 (a) If a qualified entity, as defined by Section 23310, has been dissolved or canceled as described by Section 23310, but continues to do business within the…
   9. ARTICLE 8. Dissolution or Withdrawal §§ 23331–23335 · 5 sections

      • § 23331 (a) For the purposes of this article, the effective date of dissolution of a corporation is the date on which the certified copy of the court decree, judgment,…
      • § 23332 (a) Except in the case of a taxpayer subject to the provisions of Section 23222a, any taxpayer which is dissolved or withdraws from the state during any…
      • § 23332.5 If a financial corporation ceases doing business, dissolves, or withdraws from the state during any taxable year, the tax for the taxable year during which…
      • § 23333 (a) A taxpayer subject to Section 23186 shall, if it dissolves or withdraws prior to the date the rate is determined under Section 23186, pay a tax under…
      • § 23335 (a) Any return filed pursuant to Section 18601 that the taxpayer designates in the appropriate place on the form provided by the Franchise Tax Board as the…
   10. ARTICLE 9. Affiliated Railroads §§ 23361–23364a · 5 sections

       • § 23361 “Affiliated group” means one or more chains of corporations connected through stock ownership with a common parent corporation if during the period when the…
       • § 23362 An affiliated group, subject to the provisions of this article, shall have the privilege of making a consolidated return for the taxable year in lieu of…
       • § 23363 The Franchise Tax Board shall prescribe such regulations as it may deem necessary in order that the tax liability of any affiliated group of corporations…
       • § 23364 If a consolidated return is made subject to the provisions of this article, the tax imposed under this chapter shall be computed as a unit upon the…
       • § 23364a Where a member of an affiliated group filing a consolidated return is a corporation commencing to do business in this state for the first time after August 27,…
3. CHAPTER 2.5. Alternative Minimum Tax §§ 23400–23459 · 8 sections

   • § 23400 (a) For the purpose of this chapter, Part VI of Subchapter A of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to alternative minimum tax,…
   • § 23453 (a) There shall be allowed as a credit against the regular tax (as defined by subdivision (c) of Section 23455), for any taxable year, an amount equal to the…
   • § 23455 For purposes of this part, Section 55 of the Internal Revenue Code is modified as follows: (a) Section 55(b)(1) of the Internal Revenue Code, relating to the…
   • § 23455.5 Section 55(e) of the Internal Revenue Code, relating to exemption for small corporations, shall not apply.
   • § 23456 For purposes of this part, Section 56 of the Internal Revenue Code is modified as follows: (a) (1) Section 56(a)(2) of the Internal Revenue Code, relating to…
   • § 23456.5 Section 56A of the Internal Revenue Code, relating to adjusted financial statement income, shall not apply.
   • § 23457 For purposes of this part, Section 57 of the Internal Revenue Code is modified as follows: (a) Section 57(a)(5) of the Internal Revenue Code, relating to…
   • § 23459 For purposes of this part, the provisions of Section 59 of the Internal Revenue Code are modified as follows: (a) Section 59(a) of the Internal Revenue Code,…
4. CHAPTER 3. The Corporation Income Tax §§ 23501–23561 · 4 sections

   1. ARTICLE 1. Imposition of Tax §§ 23501–23504 · 3 sections

      • § 23501 (a) There shall be imposed upon every corporation, other than a bank, for each taxable year, a tax at the rate of 7.6 percent upon its net income derived from…
      • § 23503 There shall be offset against the tax hereby imposed for any period the amount of any tax imposed on the taxpayer under Chapter 2 for the same period. In the…
      • § 23504 Where a corporation formerly subject to tax under Chapter 2 (commencing with Section 23101) becomes subject to tax under Chapter 3 (commencing with Section…
   2. ARTICLE 2. Cessation of Activities § 23561 · 1 section

      • § 23561 No decree of dissolution shall be made and entered by any court, nor shall the county clerk of any county or the Secretary of State file any such decree, or…
5. CHAPTER 3.5. Tax Credits §§ 23608–23698.1 · 25 sections

   • § 23608 (a) In the case of a taxpayer who transports any agricultural product donated in accordance with Chapter 5 (commencing with Section 58501) of Part 1 of…
   • § 23609 For each taxable year beginning on or after January 1, 1987, there shall be allowed as a credit against the “tax” (as defined by Section 23036) an amount…
   • § 23610.4 It is the intent of the Legislature that the amount of the state low-income housing tax credit allocated to a project pursuant to Section 23610.5 shall not…
   • § 23610.5 (a) (1) There shall be allowed as a credit against the “tax,” defined in Section 23036, a state low-income housing tax credit in an amount equal to the amount…
   • § 23621 (a) There shall be allowed as a credit against the “tax” (as defined by Section 23036) an amount equal to 10 percent of the amount of wages paid to each…
   • § 23624 (a) There shall be allowed as a credit against the “tax” (as defined by Section 23036) an amount equal to 10 percent of the amount of wages paid or incurred…
   • § 23626 (a) (1) For each taxable year beginning on or after January 1, 2014, and before January 1, 2026, there shall be allowed to a qualified taxpayer that hires a…
   • § 23628 (a) (1) For each taxable year beginning on or after January 1, 2021, and before January 1, 2022, there shall be allowed a small business hiring credit against…
   • § 23629 (a) (1) For each taxable year beginning on or after January 1, 2022, and before January 1, 2027, there shall be allowed to a qualified taxpayer that employs an…
   • § 23630 (a) There shall be allowed as a credit against the “tax,” as defined in Section 23036, an amount equal to 55 percent of the fair market value of any qualified…
   • § 23636 (a) For each taxable year beginning on or after January 1, 2016, and before January 1, 2031, a qualified taxpayer shall be allowed a credit against the “tax,”…
   • § 23640 (a) For taxable years beginning on or after January 1, 2026, and before January 1, 2036, there shall be allowed to qualified taxpayer, a credit against the…
   • § 23642 (a) For each taxable year beginning on or after January 1, 1996, there shall be allowed as a credit against the “tax,” as defined in Section 23036, the amount…
   • § 23663 (a) (1) Notwithstanding any other law to the contrary, for each taxable year beginning on or after July 1, 2008, any credit allowed to a taxpayer under this…
   • § 23664 (a) (1) For each taxable year beginning on or after January 1, 2023, and before January 1, 2028, there shall be allowed a credit against the “tax,” as defined…
   • § 23682 (a) For each taxable year beginning on or after January 1, 2023, and before January 1, 2028, there shall be allowed a credit against the “tax,” as defined in…
   • § 23685 (a) (1) For taxable years beginning on or after January 1, 2011, there shall be allowed to a qualified taxpayer a credit against the “tax,” as defined in…
   • § 23687 (a) For taxable years beginning on or after January 1, 2017, and before January 1, 2028, there shall be allowed as a credit against the “tax,” as defined in…
   • § 23688.5 (a) In the case of a qualified taxpayer who donates qualified donation items to a food bank located in California under Chapter 5 (commencing with Section…
   • § 23689 (a) (1) For each taxable year beginning on and after January 1, 2014, and before January 1, 2035, there shall be allowed as a credit against the “tax,” as…
   • § 23691 For each taxable year beginning on or after January 1, 2021, and before January 1, 2027, there shall be allowed to a taxpayer that receives a tax credit…
   • § 23695 (a) (1) For taxable years beginning on or after January 1, 2016, there shall be allowed to a qualified taxpayer a credit against the “tax,” as defined in…
   • § 23696 (a) Notwithstanding anything to the contrary in Sections 23685 and 23695, and in Section 23698, as that section read on January 1, 2025, a credit, or any…
   • § 23698 (a) (1) For taxable years beginning on or after January 1, 2020, there shall be allowed to a qualified taxpayer a credit against the “tax,” as defined in…
   • § 23698.1 (a) (1) For taxable years beginning on or after January 1, 2025, there shall be allowed to a qualified taxpayer a credit against the “tax,” as defined in…
6. CHAPTER 4. Exempt Corporations §§ 23701–23778 · 63 sections

   1. ARTICLE 1. Exemptions From This Part §§ 23701–23712 · 44 sections

      • § 23701 (a) Organizations which are organized and operated for nonprofit purposes within the provisions of a specific section of this article, or are defined in…
      • § 23701a (a) Labor, agricultural, or horticultural organizations other than cooperative organizations described in Section 24404 or 24405 (unless the cooperative…
      • § 23701b A fraternal order described in Section 501(c)(8) of the Internal Revenue Code.
      • § 23701c A cemetery company described in Section 501(c)(13) of the Internal Revenue Code.
      • § 23701d (a) A corporation, community chest or trust, organized and operated exclusively for religious, charitable, scientific, testing for public safety, literary, or…
      • § 23701e A business league, chamber of commerce, real estate board, or a board of trade described in Section 501(c)(6) of the Internal Revenue Code, except that the…
      • § 23701f (a) A civic league, social welfare organization, or local organization of employees described in Section 501(c)(4) of the Internal Revenue Code, except as…
      • § 23701g A social organization described in Section 501(c)(7) of the Internal Revenue Code.
      • § 23701h (a) A corporation described in Section 501(c)(2) of the Internal Revenue Code, relating to certain title-holding companies. (b) (1) Notwithstanding…
      • § 23701i A voluntary employees’ beneficiary association described in Section 501(c)(9) of the Internal Revenue Code.
      • § 23701j A teacher’s retirement fund association described in Section 501(c)(11) of the Internal Revenue Code.
      • § 23701k Religious or apostolic corporations, if such corporations have a common treasury or community treasury even if such corporations engaged in business for the…
      • § 23701l (a) A domestic fraternal society described in Section 501(c)(10) of the Internal Revenue Code, except as otherwise provided. (b) For purposes of this section,…
      • § 23701n (a) A supplemental unemployment compensation trust described in Section 501(c)(17) of the Internal Revenue Code, except as otherwise provided. (b) The…
      • § 23701p A trust or plan which meets the requirements of Public Law 87-792, 76 U.S. Stats. 809, approved October 10, 1962 (the Self-Employed Individuals Tax Retirement…
      • § 23701r (a) A political organization.However, a political organization shall be subject to tax under this part with respect to its “political organization taxable…
      • § 23701s (a) An employee-funded pension trust described in Section 501(c)(18) of the Internal Revenue Code, except as otherwise provided. (b) The last sentence in…
      • § 23701t (a) A homeowners’ association organized and operated to provide for the acquisition, construction, management, maintenance, and care of residential association…
      • § 23701u An organization is operated exclusively for exempt purposes listed in Section 23701f and its net earnings are devoted exclusively to charitable purposes if…
      • § 23701v (a) An organization of owners of manufactured homes or mobilehomes, who are tenants in a mobilehome park, formed for the purpose of purchasing the mobilehome…
      • § 23701w A veteran’s organization, as defined by Section 501(c)(19) of the Internal Revenue Code.
      • § 23701x (a) A corporation or trust described in Section 501(c)(25) of the Internal Revenue Code, relating to certain title-holding companies. (b) (1) Notwithstanding…
      • § 23701y A credit union as defined in Section 14002 of the Financial Code. In addition, those credit unions are exempt from all other taxes and licenses, state, county,…
      • § 23701z An organization established pursuant to Section 5005.1 of the Corporations Code by three or more corporations as an arrangement for the pooling of self-insured…
      • § 23701aa A public bank as defined in Section 57600 of the Government Code. In addition, a public bank is exempt from all other taxes and licenses, state, county, and…
      • § 23702 Section 502 of the Internal Revenue Code, relating to feeder organizations, shall apply, except as otherwise provided. (a) Exemption shall not be allowed to…
      • § 23703 (a) For purposes of this section, “charitable corporation” means a corporation defined in Section 12582.1 of the Government Code that is required to comply…
      • § 23703.5 Section 501(p) of the Internal Revenue Code, relating to suspension of tax-exempt status of terrorist organizations, shall apply, except as otherwise provided:…
      • § 23703.7 Section 501(q) of the Internal Revenue Code, relating to special rules for credit counseling organizations, shall apply, except as otherwise provided. (a) The…
      • § 23704 Section 501(e) of the Internal Revenue Code, relating to cooperative hospital service organizations, shall apply, except as otherwise provided. (a) References…
      • § 23704.3 Section 501(o) of the Internal Revenue Code, relating to treatment of hospitals participating in provider-sponsored organizations, shall apply, except that the…
      • § 23704.4 Section 501(k) of the Internal Revenue Code, relating to the treatment of certain organizations providing care of children, shall apply, except as otherwise…
      • § 23704.5 Section 501(h) of the Internal Revenue Code, relating to expenditures by public charities engaged in activities to influence legislation, shall apply, except…
      • § 23704.6 Section 504 of the Internal Revenue Code, relating to status after organization ceases to qualify for exemption under Section 501(c)(3) because of substantial…
      • § 23705 (a) (1) An organization described in Section 23701i (voluntary employee’s beneficiary associations) or 23701q (qualified group legal service plans) which is…
      • § 23706 Any exemption from the bank and corporation franchise tax under Chapter 2 (commencing with Section 23101) or the corporation income tax under Chapter 3…
      • § 23707 (a) Except as provided in subdivision (b), the status of any organization as a private foundation shall be terminated only if— (1) Such organization notifies…
      • § 23708 (a) For the purposes of this part, unless otherwise indicated in context, the term “an organization exempt from tax” shall mean an organization which has…
      • § 23709 (a) For the purposes of this part the term “private foundation” means a domestic or foreign organization defined in the Internal Revenue Code as a private…
      • § 23710 Any organization exempted from taxes imposed under this part pursuant to the provisions of this article shall not be disqualified for such exemption on the…
      • § 23711 Section 529 of the Internal Revenue Code, relating to qualified state tuition programs, shall apply, except as otherwise provided. (a) Section 529(a) of the…
      • § 23711.4 For taxable years beginning on or after January 1, 2016, Section 529A of the Internal Revenue Code, relating to qualified ABLE programs, added by Section 102…
      • § 23711.5 The Golden State Scholarshare Trust, established pursuant to Article 19 (commencing with Section 69980) of Chapter 2 of Part 42 of the Education Code, is an…
      • § 23712 Section 530 of the Internal Revenue Code, relating to Coverdell education savings accounts, shall apply, except as otherwise provided. (a) Section 530(a) of…
   2. ARTICLE 2. Taxation of Business Income of Certain Article 1 Organizations §§ 23731–23741 · 12 sections

      • § 23731 Every organization or trust exempt under this chapter, except as provided in this article, is subject to the tax imposed upon its unrelated business taxable…
      • § 23732 Section 512 of the Internal Revenue Code, relating to unrelated business taxable income, applies, except as otherwise provided. (a) Section 512(a)(2) of the…
      • § 23734 (a) Section 513 of the Internal Revenue Code, relating to unrelated trade or business, shall apply, except as otherwise provided. (b) Section 513(g) of the…
      • § 23735 (a) Section 514 of the Internal Revenue Code, relating to unrelated debt-financed income, shall apply, except as otherwise provided. (b) Section 10214 of…
      • § 23736 Sections 23736.1 to 23736.4, inclusive, shall apply to any organization described in Section 23701d or Section 23701n except— (a) A religious organization…
      • § 23736.1 (a) For the purposes of this article, the term “prohibited transaction” means any transaction in which an organization subject to this article— (1) Lends any…
      • § 23736.2 An organization described in Section 23701d which is subject to the provisions of this article, except those specified in Sections 23736, shall not be exempt…
      • § 23736.3 An organization described in Section 23701n or Section 23701d, except as specified in Section 23736, shall be denied exemption under Section 23736.2 only for…
      • § 23736.4 Any organization denied exemption under Section 23701d or Section 23701n by reason of the provisions of Section 23736.2 with respect to any taxable year…
      • § 23737 In the case of any organization described in Section 23701d to which this article is applicable, exemption under Article 1 (commencing with Section 23701)…
      • § 23740 Section 4911 of the Internal Revenue Code, relating to tax on excess expenditures to influence legislation, shall apply, except as otherwise provided. (a)…
      • § 23741 Notwithstanding any other provision in this part, in the case of a church exempt from taxes imposed under this part pursuant to Article 1 (commencing with…
   3. ARTICLE 3. Returns of Exempt Organizations §§ 23771–23778 · 7 sections

      • § 23771 (a) Except as provided in subdivision (b), every organization, otherwise exempt under Article 1 (commencing with Section 23701), but having income of the…
      • § 23772 (a) For the purposes of this part— (1) Except as provided in paragraph (2), every organization exempt from taxation under Section 23701 and every trust treated…
      • § 23774 (a) Except as provided in subdivision (b), every organization exempt from filing an annual information return by reason of subdivision (a) of Section 23772,…
      • § 23775 Except for purposes of amending the articles of incorporation to set forth a new name, under regulations prescribed by the Franchise Tax Board, the corporate…
      • § 23776 (a) Any organization which has suffered the suspension or forfeiture provided for in Section 23775 may, in accordance with Section 23305a, be relieved…
      • § 23777 The exemption granted to any organization under the provisions of Article 1 (commencing with Section 23701) of this chapter may be revoked by the Franchise Tax…
      • § 23778 An organization whose exemption was revoked under Section 23703 or 23777 may be reestablished as an exempt organization upon: (a) The filing or payment of both…
7. CHAPTER 4.5. Tax Treatment of S Corporations and Their Shareholders §§ 23800–23813 · 13 sections

   • § 23800 Subchapter S of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to the tax treatment of “S corporations” and their shareholders, shall apply,…
   • § 23800.5 (a) Section 1361(b)(3) of the Internal Revenue Code, relating to treatment of certain wholly owned subsidiaries, is modified as follows: (1) For purposes of…
   • § 23801 (a) A corporation that has in effect for federal income tax purposes a valid election under Section 1362(a) of the Internal Revenue Code shall be an “S”…
   • § 23802 (a) Section 1363(a) of the Internal Revenue Code, relating to the taxability of an “S” corporation does not apply. (b) Corporations that are “S” corporations…
   • § 23802.5 (a) Section 1366(a)(1) of the Internal Revenue Code, relating to determination of shareholder’s tax liability, is modified to apply to the final taxable year…
   • § 23803 (a) With respect to credits that are otherwise allowed to reduce the taxes imposed under this part: (1) The amount of any credit to be claimed shall be limited…
   • § 23804 Section 1367(b)(4) of the Internal Revenue Code, relating to adjustments in case of inherited stock, shall apply for decedents dying after December 31, 1996.
   • § 23806 (a) Section 1371(a) of the Internal Revenue Code, relating to application of Subchapter C rules, is modified to provide that, notwithstanding subdivisions (a)…
   • § 23807 Section 1372 of the Internal Revenue Code shall be modified so that references to partnership treatment shall be to Internal Revenue Code partnership…
   • § 23808 Sections 1373 and 1379 of the Internal Revenue Code shall not be applicable.
   • § 23809 There is hereby imposed a tax on built-in gains attributable to California sources, determined in accordance with the provisions of Section 1374 of the…
   • § 23811 Except as otherwise provided in this section, there is hereby imposed a tax on passive investment income attributable to California sources, determined in…
   • § 23813 Section 1377(b)(2) of the Internal Revenue Code, relating to determination defined, is modified to include, in addition to the items specified therein, the…
8. CHAPTER 5. Computation of Tax When Law Changed § 24251 · 1 section

   • § 24251 The tax on any taxpayer for a period beginning in one calendar year (called “first calendar year”) and ending in the following calendar year (called “second…
9. CHAPTER 6. Gross Income §§ 24271–24329 · 48 sections

   1. ARTICLE 1. Definitions §§ 24271–24276 · 8 sections

      • § 24271 (a) Section 61 of the Internal Revenue Code, relating to gross income defined, shall apply, except as otherwise provided. (b) A distributive share of…
      • § 24272 For the purposes of the tax imposed under Chapter 2 (commencing with Section 23101), “gross income” includes all interest received from federal, state,…
      • § 24272.2 The provisions of Section 72(u) of the Internal Revenue Code, relating to the treatment of annuity contracts not held by natural persons, shall be applicable.
      • § 24272.5 (a) Section 7518 of the Internal Revenue Code, relating to tax incentives relating to merchant marine capital construction funds, shall apply, except as…
      • § 24273 (a) Amounts received as loans from the Commodity Credit Corporation shall, at the election of the taxpayer, be considered as income and shall be included in…
      • § 24273.5 (a) Noncash patronage allocations from farmers’ cooperative and mutual associations (whether paid in capital stock, revolving fund certificates, retain…
      • § 24275 In the case of any taxpayer who is required to include the amount of any nuclear decommissioning costs in the taxpayer’s cost of service for ratemaking…
      • § 24276 Section 90 of the Internal Revenue Code, relating to illegal federal irrigation subsidies, shall apply to water delivered to the taxpayer on or after January…
   2. ARTICLE 2. Exclusions §§ 24301–24315 · 31 sections

      • § 24301 In computing the tax imposed under this part, “gross income” does not include any of the items specified in this article.
      • § 24302 Amounts received other than amounts paid by reason of the death of the insured under life insurance, endowment or annuity contracts, either during the term or…
      • § 24303 Any grant made in any taxable year by the Secretary of the Treasury under Section 1603 of the American Recovery and Reinvestment Tax Act of 2009 (Public Law…
      • § 24305 (a) Except as provided in subdivisions (b) and (c), amounts received under life insurance policies and contracts paid by reason of the death of the insured but…
      • § 24306 (a) For purposes of this section, the following terms have the following meanings, as provided in the Golden State Scholarshare Trust Act (Article 19…
      • § 24307 (a) Section 108 of the Internal Revenue Code, relating to income from discharge of indebtedness, shall apply, except as otherwise provided. (b) Section…
      • § 24308 Section 1078 of Public Law 98-369 (Tax Reform Act of 1984), relating to exclusions from gross income of payments from the United States Forest Service as a…
      • § 24308.1 Gross income does not include any amount received as a rebate, voucher, or other financial incentive issued by the California Energy Commission, the Public…
      • § 24308.2 (a) For taxable years beginning on or after January 1, 2020, gross income does not include any amount awarded as a restaurant revitalization grant pursuant to…
      • § 24308.3 (a) For taxable years beginning on or after January 1, 2019, gross income does not include any amount awarded as a shuttered venue operator grant pursuant to…
      • § 24308.4 (a) For taxable years beginning on or after January 1, 2021, and before January 1, 2026, gross income does not include a bill credit or credits received by a…
      • § 24308.5 (a) For taxable years beginning on or after January 1, 2021, and before January 1, 2026, gross income does not include a bill credit or credits received by a…
      • § 24308.6 (a) For taxable years beginning on or after January 1, 2019, gross income does not include any covered loan amount forgiven pursuant to Section 1106 of the…
      • § 24308.7 (a) For each taxable year beginning on or after July 1, 2015, gross income does not include an amount received as a loan forgiveness, grant, credit, rebate,…
      • § 24308.8 (a) Gross income does not include any qualified amount received by a qualified taxpayer. (b) For purposes of this section: (1) The term “qualified amount”…
      • § 24308.9 (a) For taxable years beginning on or after January 1, 2022, and before January 1, 2027, gross income does not include any amount received as a rebate,…
      • § 24308.10 (a) For taxable years beginning on or after January 1, 2024, and before January 1, 2029, gross income shall not include any amount received by a qualified…
      • § 24309 Gross income does not include income (other than rent) derived by a lessor of real property on the termination of a lease, representing the value of such…
      • § 24309.1 (a) For taxable years beginning before January 1, 2027, gross income does not include any qualified amount received by a qualified taxpayer. (b) For purposes…
      • § 24309.2 (a) For taxable years beginning on or after January 1, 2021, and before January 1, 2030, gross income shall not include any qualified amount received by a…
      • § 24309.3 (a) Gross income does not include any qualified amount received by a qualified taxpayer. (b) For purposes of this section: (1) “Qualified amount” means any…
      • § 24309.5 Section 110 of the Internal Revenue Code, relating to qualified lessee construction allowances for short-term leases, shall apply, except as otherwise…
      • § 24309.6 (a) For taxable years beginning on or after January 1, 2020, and before January 1, 2028, gross income does not include any qualified amount received by a…
      • § 24309.7 (a) For taxable years beginning on or after January 1, 2020, and before January 1, 2028, gross income does not include any qualified amount received by a…
      • § 24309.9 (a) For taxable years beginning on or after January 1, 2024, and before January 1, 2029, gross income does not include any Chiquita Canyon elevated temperature…
      • § 24310 (a) Section 111 of the Internal Revenue Code, relating to recovery of tax benefit items, shall apply, except as otherwise provided. (b) Sections 111(b) and…
      • § 24310.5 (a) For taxable years beginning on or after January 1, 2026, and before January 1, 2031, gross income does not include any payment made pursuant to Section…
      • § 24311 (a) For taxable years beginning on or after September 1, 2020, and before January 1, 2025, gross income does not include grant allocations received by a…
      • § 24312 (a) Gross income does not include any of the following grant allocations: (1) For taxable years beginning on or after January 1, 2020, and before January 1,…
      • § 24314 The following phrase (or its substantial equivalent) in other codes or statutes does not exempt the gain or loss from the sale or transfer of bonds from the…
      • § 24315 Gross income does not include any amount received for empty beverage containers by a consumer from a recycling center or recycling location as the recycling…
   3. ARTICLE 3. Other Exclusions §§ 24320–24329 · 9 sections

      • § 24320 Income derived from the operation of aircraft or a ship or ships by a corporation organized under the laws of a foreign country shall not be included in gross…
      • § 24321 Notwithstanding any statute, ordinance, regulation, rule or decision to the contrary, no city, county, city and county, governmental subdivision, district,…
      • § 24322 (a) Gross income of a domestic building and loan association, as defined in Section 7701(a)(19) of the Internal Revenue Code, does not include any amount of…
      • § 24323 Any amount received as a rebate from a local water agency or supplier for any expenses the taxpayer paid or incurred for the purchase or installation of each…
      • § 24324 (a) Gross income does not include any contribution to the capital of the taxpayer. (b) (1) For purposes of this section, “contribution to the capital of the…
      • § 24325 Section 118 of the Internal Revenue Code, relating to contributions to the capital of a corporation, shall apply to contributions made on or after January 1,…
      • § 24326 (a) Section 136 of the Internal Revenue Code, relating to energy conservation subsidies provided by public utilities, shall apply, except as otherwise…
      • § 24327 Section 892 of the Internal Revenue Code, relating to the tax treatment of foreign governments and international organizations, shall apply.
      • § 24329 Section 139 of the Internal Revenue Code, relating to disaster relief payments, shall apply, except as otherwise provided.
10. CHAPTER 7. Net Income §§ 24341–24449 · 126 sections

    1. ARTICLE 1. Deductions §§ 24341–24383 · 77 sections

       • § 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…
       • § 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…
       • § 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…
       • § 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…
       • § 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…
       • § 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…
       • § 24343.7 Section 162(k)(2)(A)(ii) of the Internal Revenue Code shall not apply.
       • § 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…
       • § 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…
       • § 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.…
       • § 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…
       • § 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…
       • § 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).
       • § 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.
       • § 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…
       • § 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…
       • § 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.…
       • § 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…
       • § 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…
       • § 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…
       • § 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…
       • § 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…
       • § 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…
       • § 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…
       • § 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…
       • § 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…
       • § 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…
       • § 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…
       • § 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…
       • § 24349 (a) There shall be allowed as a depreciation deduction a reasonable allowance for the exhaustion, wear and tear (including a reasonable allowance for…
       • § 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,…
       • § 24349.2 Section 280G of the Internal Revenue Code, relating to golden parachute payments, shall apply, except as otherwise provided.
       • § 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…
       • § 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,…
       • § 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…
       • § 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…
       • § 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…
       • § 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…
       • § 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…
       • § 24355 Section 167(f) of the Internal Revenue Code, relating to treatment of property excluded from Section 197, shall apply, except as otherwise provided.
       • § 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…
       • § 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…
       • § 24355.5 Section 197 of the Internal Revenue Code, relating to amortization of goodwill and certain other intangibles, shall apply.
       • § 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…
       • § 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…
       • § 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…
       • § 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…
       • § 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…
       • § 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…
       • § 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…
       • § 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…
       • § 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…
       • § 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…
       • § 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…
       • § 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…
       • § 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…
       • § 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,…
       • § 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…
       • § 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…
       • § 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…
       • § 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…
       • § 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,…
       • § 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…
       • § 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…
       • § 24364 Notwithstanding Article 3 (commencing with Section 24421), all expenditures (other than expenditures for the purchase of land or depreciable property or for…
       • § 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)…
       • § 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…
       • § 24369 Section 175 of the Internal Revenue Code, relating to soil and water conservation expenditures, shall apply, except as otherwise provided.
       • § 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…
       • § 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…
       • § 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…
       • § 24372.5 (a) Section 194 of the Internal Revenue Code, relating to amortization of reforestation expenditures, shall apply, except as otherwise provided. (b) The…
       • § 24373 Section 178 of the Internal Revenue Code, relating to the amortization of cost of acquiring a lease, shall apply.
       • § 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…
       • § 24379 Section 83 of the Internal Revenue Code, relating to property transferred in connection with performance of services, shall apply, except as otherwise provided.
       • § 24382 (a) Section 216 of the Internal Revenue Code, relating to deduction of taxes, interest, and business depreciation by cooperative housing corporation…
       • § 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…
    2. ARTICLE 2. Special Deductions §§ 24401–24416.24 · 24 sections

       • § 24401 In addition to the deductions provided in Article 1 (commencing with Section 24341), there shall be allowed as deductions in computing taxable income the items…
       • § 24402 (a) A portion of the dividends received during the taxable year declared from income which has been included in the measure of the taxes imposed under Chapter…
       • § 24403 In the case of a building and loan association, organized and operating wholly or partly on a mutual plan, or a federal savings and loan association, organized…
       • § 24404 In the case of farmers, fruit growers, or like associations organized and operated in whole or in part on a cooperative or mutual basis, (a) for the purpose of…
       • § 24405 (a) In the case of other associations organized and operated in whole or in part on a cooperative or a mutual basis, all income resulting from or arising out…
       • § 24406 In the case of other associations organized and operated as co-operative corporations pursuant to Part 2 (commencing with Section 12200), Division 3, Title 1…
       • § 24406.5 (a) In the case of gas producers’ cooperative associations organized and operated as cooperative corporations pursuant to Chapter 1 (commencing with Section…
       • § 24406.6 For purposes of Section 24373.5, and Sections 24404 to 24406.5, inclusive, net earnings shall not be reduced by amounts paid during the year as dividends on…
       • § 24407 (a) The organizational expenditures of a corporation may, at the election of the corporation (made in accordance with regulations prescribed by the Franchise…
       • § 24408 The term “organizational expenditures” means any expenditure that meets all of the following requirements: (a) Is incident to the creation of the corporation.…
       • § 24409 The election provided by Section 24407 may be made for any taxable year beginning after December 31, 1960, but only if made not later than the time prescribed…
       • § 24410 (a) For taxable years commencing on or after January 1, 2004, the allowable dividends received deduction with respect to qualified dividends received by a…
       • § 24411 (a) For purposes of those taxpayers electing to compute income under Section 25110, 100 percent of the qualifying dividends described in subdivision (c) and 75…
       • § 24414 (a) Section 195 of the Internal Revenue Code, relating to startup expenditures, shall apply, except as otherwise provided. (b) References to Sections 163(a),…
       • § 24415 (a) To the extent specified in subdivision (b), there shall be allowed as a deduction to a taxpayer those payments of the taxpayer which are made pursuant to…
       • § 24416 Except as provided in Sections 24416.1, 24416.4, and 24416.7, or Sections 24416.2, 24416.5, and 24416.6, as those sections read on November 30, 2014, a net…
       • § 24416.1 (a) A qualified taxpayer, as defined in Section 24416.4 or 24416.7, or Section 24416.2, 24416.5, or 24416.6, as those sections read on November 30, 2014, may…
       • § 24416.3 (a) Notwithstanding Sections 24416, 24416.1, 24416.4, and 24416.7, or Sections 24416.2, 24416.5, and 24416.6, as those sections read on November 30, 2014, and…
       • § 24416.4 (a) The term “qualified taxpayer” as used in Section 24416.1 includes a corporation engaged in the conduct of a trade or business within the Los Angeles… see note
       • § 24416.7 (a) The term “qualified taxpayer” as used in Section 24416.1 includes a corporation that conducts a farming business that is directly affected by Pierce’s…
       • § 24416.21 (a) Notwithstanding Sections 24416, 24416.1, 24416.4, and 24416.7, Sections 24416.2, 24416.5, and 24416.6, as those sections read on November 30, 2014, and…
       • § 24416.22 Notwithstanding Section 24416.1, 24416.4, or 22416.7, or Section 24416.2, 24416.5, or 24416.6, as those sections read on November 30, 2014, to the contrary, a…
       • § 24416.23 (a) Notwithstanding Sections 24416, 24416.1, 24416.4, 24416.7, and 24416.22, former Sections 24416.2, 24416.5, 24416.6, and 24416.20, and Section 172 of the…
       • § 24416.24 (a) Notwithstanding Sections 24416, 24416.1, 24416.4, 24416.7, and 24416.22, former Sections 24416.2, 24416.5, 24416.6, and 24416.20, and Section 172 of the…
    3. ARTICLE 3. Items Not Deductible §§ 24421–24449 · 25 sections

       • § 24421 In computing “net income” of taxpayers under this part, no deduction shall be allowed for the items specified in this article.
       • § 24422 No deduction shall be allowed for both of the following: (a) Any amount paid out for new buildings or for permanent improvements or betterments made to…
       • § 24422.3 (a) Section 263A of the Internal Revenue Code, relating to capitalization and inclusion in inventory costs of certain expenses, shall apply, except as…
       • § 24424 Section 264 of the Internal Revenue Code, relating to certain amounts paid in connection with insurance contracts, shall apply, except as otherwise provided.
       • § 24425 (a) No deduction shall be allowed for any amount otherwise allowable as a deduction which is allocable to one or more classes of income not included in the…
       • § 24426 Amounts paid or accrued for such taxes and carrying charges as, under regulations prescribed by the Franchise Tax Board, are chargeable to capital account with…
       • § 24427 Section 267 of the Internal Revenue Code, relating to losses, expenses, and interest with respect to transactions between related taxpayers, shall apply,…
       • § 24428 Section 267A of the Internal Revenue Code, relating to certain related party amounts paid or accrued in hybrid transactions or with hybrid entities, shall…
       • § 24429 Section 276 of the Internal Revenue Code, relating to certain indirect contributions to political parties, shall apply, except as otherwise provided.
       • § 24430 The amendments made by Section 13304 of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97) to Section 274 of the Internal Revenue Code, relating to limitation…
       • § 24431 (a) If— (1) Any person or persons acquire, or acquired on or after October 8, 1940, directly or indirectly, control of a corporation; or (2) Any corporation…
       • § 24434 (a) In the case of a taxpayer (other than a bank as defined in Section 23039) no deduction shall be allowed under Section 24347 or 24348 by reason of the…
       • § 24436.1 (a) In computing net income, deductions, including deductions for cost of goods sold, shall not be allowed to any taxpayer from any of its gross income…
       • § 24436.5 (a) No deduction shall be allowed for interest, depreciation, taxes, or amortization paid or incurred in the taxable year under Section 24343, 24344, 24345, or…
       • § 24437 Section 277 of the Internal Revenue Code, relating to deductions incurred by certain membership organizations in transactions with members, shall apply, except…
       • § 24438 (a) No deduction shall be allowed for any interest paid or incurred by a taxpayer during the taxable year with respect to its corporate acquisition…
       • § 24439 (a) No deduction shall be allowed to the issuing corporation for any premium paid or incurred upon the repurchase of a bond, debenture, note, or certificate or…
       • § 24440 (a) Section 280C(b) of the Internal Revenue Code, relating to credit for qualified clinical testing expenses for certain drugs, shall apply, except as…
       • § 24441 In computing net income no deduction shall be allowed for (a) abandonment fees paid in respect of property on which the open-space easement is terminated under…
       • § 24442 In the case of the demolition of any structure— (1) No deduction otherwise allowable under this part shall be allowed to the owner or lessee of such structure…
       • § 24442.5 Section 280H of the Internal Revenue Code, relating to limitation on certain amounts paid to employee-owners by personal service corporations electing…
       • § 24443 Section 274 of the Internal Revenue Code, relating to the disallowance of certain entertainment, gift, travel, etc., expenses, shall apply, except as otherwise…
       • § 24447 The Franchise Tax Board may disallow a deduction under this part to an individual or entity for amounts paid as remuneration for personal services if that…
       • § 24448 (a) Notwithstanding any other provisions in this part, in the case of a taxpayer who owns real property and has either failed to provide the information…
       • § 24449 (a) Section 291 of the Internal Revenue Code, relating to special rules relating to corporate preference items, shall apply, except as otherwise provided. (b)…
11. CHAPTER 8. Corporate Distributions and Adjustments §§ 24451–24481 · 18 sections

    • § 24451 Subchapter C of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to corporate distributions and adjustments, shall apply, except as otherwise…
    • § 24451.1 (a) Notwithstanding paragraph (3) of subdivision (e) of Section 23051.5, if an election has been made by a taxpayer under Section 338 of the Internal Revenue…
    • § 24452 Section 301(e)(2) of the Internal Revenue Code, relating to 20 percent corporate shareholders, is modified to refer to Section 24402 in lieu of Sections 243…
    • § 24453 Section 302(c)(2) of the Internal Revenue Code, relating to determining termination of interest, is modified to refer to the periods of limitation provided in…
    • § 24454 Section 304(b)(5)(B) of the Internal Revenue Code, relating to special rule in case of foreign acquiring corporation, shall apply to acquisitions on or after…
    • § 24454.1 The amendments to Section 367(a) of the Internal Revenue Code as enacted by Section 14102 of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97), relating to…
    • § 24455 (a) The Franchise Tax Board may include in the gross income of the taxpayer (or a member of the taxpayer’s combined reporting group) in that taxable year the…
    • § 24456 Section 306(f) of the Internal Revenue Code, relating to source of gain, shall not apply.
    • § 24457 Section 312(k)(3)(B)(ii) of the Internal Revenue Code, relating to special rule for real estate investment trusts, shall not apply.
    • § 24458 Internal Revenue Service Notice 2008-83, 2008-42 I.R.B. 905, issued on October 20, 2008, relating to the treatment of deductions under Section 382(h) of the…
    • § 24459 (a) Section 382(n) of the Internal Revenue Code, relating to special rule for certain ownership changes, shall not apply. (b) Section 382(d)(3) of the Internal…
    • § 24461 (a) For purposes of this part, the provisions of Section 633 of Public Law 99-514, relating to effective dates for recognition of gain and loss on…
    • § 24465 (a) (1) If, in connection with any exchange described in Section 332, 351, 354, 356, or 361 of the Internal Revenue Code, a taxpayer transfers property to an…
    • § 24471 Section 381(c) of the Internal Revenue Code, relating to items of the distributor or transferor corporation, is modified to provide that, in lieu of paragraph…
    • § 24471.5 Section 381(c)(20) of the Internal Revenue Code, relating to carryforward of disallowed business interest, shall not apply.
    • § 24472 The amendments to Section 382 of the Internal Revenue Code made by Section 13226 of the Revenue Reconciliation Act of 1993 (P.L. 103-66), relating to…
    • § 24473 Notwithstanding any other provision of law, the contribution or other transfer of the assets of a mutual water company established prior to September 26, 1977,…
    • § 24481 Section 383 of the Internal Revenue Code, relating to special limitations on certain excess credits, etc., is modified to apply to credits allowable under…
12. CHAPTER 12. Deferred Compensation, Etc. §§ 24601–24612 · 4 sections

    1. ARTICLE 1. Adoption of Subchapter D of the Internal Revenue Code Relating to Deferred Compensation, etc. §§ 24601–24602 · 2 sections

       • § 24601 (a) Subchapter D of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to deferred compensation, etc., shall apply, except as otherwise provided.…
       • § 24602 (a) In addition to the application of Part II (commencing with Section 421) of Subchapter D of Chapter 1 of Subtitle A of the Internal Revenue Code, relating…
    2. ARTICLE 2. Exceptions to Part I of Subchapter D of the Internal Revenue Code, Relating to Pension, Profit-Sharing, Stock Bonus Plans, etc. §§ 24611–24612 · 2 sections

       • § 24611 (a) Section 404(k) of the Internal Revenue Code, relating to dividends paid deduction, shall apply to taxable years beginning on or after January 1, 1995. (b)…
       • § 24612 Sections 413(b)(6) and 413(c)(5) of the Internal Revenue Code, relating to liability for funding tax, shall not apply.
13. CHAPTER 13. Accounting Periods and Methods of Accounting §§ 24631–24726 · 47 sections

    1. ARTICLE 1. Accounting Periods §§ 24631–24637 · 7 sections

       • § 24631 (a) (1) For taxable years beginning prior to January 1, 2000, income shall be computed on the basis of the taxpayer’s income year. (2) For taxable years…
       • § 24632 The taxable year of a taxpayer may not be different than the taxable year used for purposes of the Internal Revenue Code, unless initiated or approved by the…
       • § 24633 If a taxpayer changes its annual accounting period, the new accounting period shall become the taxpayer’s taxable year only if the change is approved by the…
       • § 24633.5 (a) In the case of any “S corporation” or personal service corporation required to change its accounting period by the federal Tax Reform Act of 1986 (Public…
       • § 24634 (a) A return for a period of less than 12 months (referred to in this article as “short period”) shall be made under any of the following circumstances: (1)…
       • § 24636 (a) If a separate return is made by a taxpayer subject to the tax imposed by Chapter 2, under Section 24634 on account of a change in the accounting period the…
       • § 24637 For taxable years beginning on or after January 1, 1987, Section 444 of the Internal Revenue Code, relating to election of taxable year other than required…
    2. ARTICLE 2. Methods of Accounting §§ 24651–24654 · 5 sections

       • § 24651 (a) Income shall be computed under the method of accounting on the basis of which the taxpayer regularly computes its income in keeping its books. (b) If no…
       • § 24652 (a) Section 447 of the Internal Revenue Code, relating to method of accounting for corporations engaged in farming, shall apply, except as otherwise provided.…
       • § 24652.5 (a) (1) Section 447(i)(3) of the Internal Revenue Code, relating to reduction in account if farming business contracts, shall not apply. (2) Section 447(i)(4)…
       • § 24652.6 (a) For taxable years beginning on or after January 1, 2019, amendments made by Section 13102(e)(2) of the Tax Cuts and Jobs Act (Public Law 115-97), relating…
       • § 24654 (a) Section 448 of the Internal Revenue Code, relating to limitation on use of cash method of accounting, shall apply, except as otherwise provided. (b) For…
    3. ARTICLE 3. Year of Inclusion §§ 24661–24679 · 18 sections

       • § 24661 Section 451 of the Internal Revenue Code, relating to the general rule for taxable year of inclusion, shall apply, except as otherwise provided.
       • § 24661.3 (a) (1) The options under Sections 112(d)(2) and 112(d)(3) of the Federal Agriculture Improvement and Reform Act of 1996 (7 U.S.C. Sec. 7212(d)(2) and (3)), as…
       • § 24661.4 Section 451(b) of the Internal Revenue Code, relating to inclusion not later than for financial accounting purposes, shall not apply to specified credit card…
       • § 24661.5 Section 451(g)(3) of the Internal Revenue Code, relating to special election rule, is modified by substituting the phrase “subdivision (b) of Section 24949.1”…
       • § 24661.6 Section 451(k) of the Internal Revenue Code, relating to special rule for sales or dispositions to implement Federal Energy Regulatory Commission or state…
       • § 24667 (a) (1) Sections 453, 453A, and 453B of the Internal Revenue Code, relating to installment method, special rules for nondealers, and gain or loss on…
       • § 24668.1 Any taxpayer who disposes of property as a result of the exercise of the power of requisition or condemnation may, at his or her election, have the income…
       • § 24670 The amendments to Section 453B(e) of the Internal Revenue Code as enacted by Section 13512(b)(1) of the Tax Cuts and Jobs Act, 2017 (Public Law 115-97),…
       • § 24672 (a) Where a taxpayer reports income arising from the sale or other disposition of property as provided in this article, and the entire income therefrom has not…
       • § 24673 Where a corporation subject to the tax imposed by Chapter 2 is engaged in the performance of a contract in this State which will require more than a year to…
       • § 24673.2 (a) Section 460 of the Internal Revenue Code, relating to special rules for long-term contracts, shall apply, except as otherwise provided. (b) (1) Section…
       • § 24674 (a) If, in the case of a taxpayer owning any non-interest-bearing obligation issued at a discount and redeemable for fixed amounts increasing at stated…
       • § 24675 If an amount representing compensatory damages is received or accrued by a taxpayer during a taxable year as the result of an award in a civil action for…
       • § 24676 (a) Prepaid subscription income to which this section applies shall be included in gross income for the taxable years during which the liability described in…
       • § 24676.5 (a) A taxpayer who is on an accrual method of accounting may elect not to include in the gross income for the taxable year the income attributable to the…
       • § 24677 (a) If an amount representing damages is received or accrued by a corporation during a taxable year as a result of an award in a civil action for breach of…
       • § 24678 (a) If an amount representing damages is received or accrued during a taxable year as a result of an award in, or settlement of, a civil action brought under…
       • § 24679 For purposes of Sections 24675 through 24678, a fractional part of a month shall be disregarded unless it amounts to more than half a month, in which case it…
    4. ARTICLE 4. Year of Deduction §§ 24681–24694 · 11 sections

       • § 24681 Section 461 of the Internal Revenue Code, relating to the general rule for taxable year of deduction, shall apply, except as otherwise provided.
       • § 24682 Section 464 of the Internal Revenue Code, relating to limitations on deductions for certain farming expenses, shall apply, except as otherwise provided.
       • § 24685 (a) In the case of any taxpayer who elected to have former Section 24685 apply for that taxpayer’s last taxable year beginning prior to January 1, 1990, and…
       • § 24685.5 (a) The amendment made by Section 7001(a) of the Internal Revenue Service Restructuring and Reform Act of 1998 (Public Law 105-206) to Section 404(a)(11) of…
       • § 24688 Section 467 of the Internal Revenue Code, relating to certain payments for the use of property or services, shall apply, except as otherwise provided.
       • § 24689 Section 468 of the Internal Revenue Code, relating to special rules for mining and solid waste reclamation and closing costs, shall apply, except as otherwise…
       • § 24690 (a) The provisions of Section 468A of the Internal Revenue Code, relating to special rules for nuclear decommissioning costs, shall be applicable, except as…
       • § 24691 Section 465 of the Internal Revenue Code, relating to limitations of deductions to the amount at risk, shall apply.
       • § 24692 (a) Section 469 of the Internal Revenue Code, relating to passive activity losses and credits limited, shall apply, except as otherwise provided. (b) Section…
       • § 24693 (a) Section 468B of the Internal Revenue Code, relating to special rules for designated settlement funds, shall apply, except as otherwise provided. (b)…
       • § 24694 Section 470 of the Internal Revenue Code, relating to limitation on deductions allocable to property used by governments or other tax-exempt entities, shall…
    5. ARTICLE 5. Inventories §§ 24701–24710 · 3 sections

       • § 24701 (a) Section 471 of the Internal Revenue Code, relating to the general rule for inventories, shall apply, except as otherwise provided. (b) (1) For taxable…
       • § 24708 Section 474 of the Internal Revenue Code, relating to simplified dollar-value LIFO method for certain small businesses, shall apply, except as otherwise…
       • § 24710 (a) For each taxable year beginning on or after January 1, 1997, Section 475 of the Internal Revenue Code, relating to mark to market accounting method for…
    6. ARTICLE 6. Adjustments Required by Changes in Method §§ 24721–24726 · 3 sections

       • § 24721 (a) Section 481 of the Internal Revenue Code, relating to adjustments required by changes in method of accounting, shall apply, except as otherwise provided.…
       • § 24725 The provisions of Section 482 of the Internal Revenue Code, relating to allocation of income and deductions among taxpayers, shall be applicable, except as…
       • § 24726 Section 483 of the Internal Revenue Code, relating to interest on certain deferred payments, shall apply, except as otherwise provided.
14. CHAPTER 14. Natural Resources § 24831 · 1 section

    • § 24831 (a) Subchapter I of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to natural resources, shall apply, except as otherwise provided. (b) For…
15. CHAPTER 14.5. Regulated Investment Companies, Real Estate Investment Trusts, Real Estate Mortgage Investment Conduits, and Financial Asset Securitization Investment Trusts §§ 24870–24876 · 10 sections

    • § 24870 Subchapter M of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to regulated investment companies and real estate investment trusts, shall…
    • § 24871 (a) (1) Section 852(b)(1) of the Internal Revenue Code, relating to imposition of tax on regulated investment companies, shall not apply. (2) Every regulated…
    • § 24872 (a) A real estate investment trust shall be deemed to have satisfied the distribution requirements of Section 857(a)(1) of the Internal Revenue Code for…
    • § 24872.4 (a) Section 856(d)(7)(C)(ii) of the Internal Revenue Code is modified by substituting the phrase “if received by an organization described in subdivision (b)…
    • § 24872.6 (a) A corporation, trust, or association that is a real estate investment trust for any taxable year for federal purposes under Part II (commencing with…
    • § 24872.7 (a) (1) (A) Whenever a penalty is imposed for federal purposes under Section 857(f)(2)(A) or (B) of the Internal Revenue Code, whichever is applicable, it…
    • § 24873 Section 860F(a) of the Internal Revenue Code, relating to the 100 percent tax on prohibited transactions, shall not apply.
    • § 24874 A real estate mortgage investment conduit (REMIC) shall be subject to the minimum franchise tax imposed under Section 23153.
    • § 24875 (a) A financial asset securitization investment trust (FASIT) shall be subject to the minimum franchise tax imposed under Section 23153. (b) For purposes of…
    • § 24876 (a) The amendments made to Section 860E(a)(3)(B) of the Internal Revenue Code by Section 2303(a)(2)(C) of Public Law 116-136, relating to conforming…
16. CHAPTER 15. Gain or Loss on Disposition of Property §§ 24901–24998 · 57 sections

    1. ARTICLE 1. Computation of Gain or Loss §§ 24901–24905.5 · 4 sections

       • § 24901 (a) The gain from the sale or other disposition of property shall be the excess of the amount realized therefrom over the adjusted basis provided in Section…
       • § 24902 Except as otherwise provided in this part, on the sale or exchange of property the entire amount of the gain or loss, determined under Section 24901, shall be…
       • § 24905 (a) Section 988 of the Internal Revenue Code, relating to treatment of certain foreign currency transactions, shall apply, except as otherwise provided. (b)…
       • § 24905.5 For each taxable year beginning on or after January 1, 1997, the amendments made to Section 988 of the Internal Revenue Code by Section 13223 of the Revenue…
    2. ARTICLE 2. Basis for Computation of Gain or Loss §§ 24911–24919 · 10 sections

       • § 24911 (a) The adjusted basis for determining the gain or loss from the sale or other disposition of property, whenever acquired, shall be the basis (determined under…
       • § 24912 The basis of property shall be the cost of the property, except as otherwise provided in Chapter 8 (commencing with Section 24451), relating to corporate…
       • § 24913 If the property should have been included in the last inventory, the basis shall be the last inventory value thereof.
       • § 24914 (a) If the property was acquired by gift after December 31, 1920, the basis shall be the same as it would be in the hands of the donor or the last preceding…
       • § 24915 (a) If— (1) The property is acquired by gift on or after the date of the enactment of this section, the basis shall be the basis determined under Section…
       • § 24916 Proper adjustment with regard to the property shall in all cases be made as follows: (a) For expenditures, receipts, losses, or other items properly chargeable…
       • § 24916.2 Notwithstanding the provisions of Section 24916 no adjustment shall be made for (a) abandonment fees paid in respect of property on which the open-space…
       • § 24917 Whenever it appears that the basis of property in the hands of the corporation is a substituted basis, then the adjustments provided in Section 24916 shall be…
       • § 24918 (a) Section 1017 of the Internal Revenue Code, relating to discharge of indebtedness, shall apply, except as otherwise provided. References to affiliated…
       • § 24919 Neither the basis nor the adjusted basis of any portion of real property shall, in the case of the lessor of such property, be increased or diminished on…
    3. ARTICLE 3. Nontaxable Exchanges §§ 24941–24955 · 22 sections

       • § 24941 Section 1031 of the Internal Revenue Code, relating to exchange of property held for productive use or investment, shall apply, except as otherwise provided.
       • § 24941.5 (a) The amendments made by Section 13303(a) and (b) of the Tax Cuts and Jobs Act (Public Law 115-97) to Section 1031 of the Internal Revenue Code, relating to…
       • § 24942 (a) No gain or loss shall be recognized to a corporation on the receipt of money or other property in exchange for stock (including treasury stock) of that…
       • § 24943 If property (as a result of its destruction in whole or in part, theft, seizure, or requisition or condemnation or threat or imminence thereof) is compulsorily…
       • § 24944 If property (as a result of its destruction in whole or in part, theft, seizure, or requisition or condemnation or threat or imminence thereof) is compulsorily…
       • § 24945 If a taxpayer has made the election provided in Section 24944(a), then— (a) The statutory period for the assessment of any deficiency, for any taxable year in…
       • § 24946 If the election provided in Section 24944(a) is made by the taxpayer and such other property or such stock was purchased before the beginning of the last…
       • § 24947 (a) Section 1033(b) of the Internal Revenue Code, relating to basis of property acquired through involuntary conversion, shall apply, except as otherwise…
       • § 24948 For purposes of this part, if property lying within an irrigation project is sold or otherwise disposed of in order to conform to the acreage limitation…
       • § 24949 For purposes of this part, if livestock are destroyed by or on account of disease, or are sold or exchanged because of disease, such destruction or such sale…
       • § 24949.1 (a) For purposes of this part, the sale or exchange of livestock (other than poultry) held by a taxpayer for draft, breeding, or dairy purposes in excess of…
       • § 24949.2 (a) For purposes of Sections 24943 through 24945, if real property (not including stock in trade or other property held primarily for sale) held for productive…
       • § 24949.3 For purposes of Sections 24943 through 24946, if, because of drought, flood, other weather-related conditions, or soil contamination or other environmental…
       • § 24949.5 (a) For purposes of Sections 24943 through 24946, Section 1033(h) of the Internal Revenue Code, relating to special rules for property damaged by federally…
       • § 24950 Section 1035 of the Internal Revenue Code, relating to certain exchanges of insurance policies, shall apply, except as otherwise provided.
       • § 24950.5 The amendments made by Section 844 of the Pension Protection Act of 2006 (Public Law 109-280) to Section 1035 of the Internal Revenue Code shall not apply.
       • § 24951 Section 1036 of the Internal Revenue Code, relating to stock for stock of same corporation, shall apply, except as otherwise provided.
       • § 24952 (a) If— (1) A sale of real property gives rise to indebtedness to the seller which is secured by the real property sold, and (2) The seller of such property…
       • § 24953 (a) If gain or loss from the exchange of property in this state of a taxpayer is not recognized under this part because of Section 1031 of the Internal Revenue…
       • § 24954 For taxable years beginning on or after January 1, 1995, Section 1042 of the Internal Revenue Code, relating to sales of stock to employee stock ownership…
       • § 24954.1 Section 1042(g) of the Internal Revenue Code, relating to application of section to sales of stock in agricultural refiners and processors to eligible farm…
       • § 24955 (a) No gain shall be recognized with respect to a sale of an assisted housing development to a tenant association, nonprofit organization, profit-motivated…
    4. ARTICLE 4. Special Rules for Basis §§ 24961–24966.2 · 8 sections

       • § 24961 In the case of the property acquired by a corporation, during a period of affiliation, from a corporation with which it was affiliated, the basis of such…
       • § 24962 (a) If the property was acquired, after February 28, 1913, in any income year beginning before January 1, 1934, and the basis thereof, for purposes of the…
       • § 24963 In the case of property acquired before March 1, 1913, if the basis otherwise determined under this part, adjusted (for the period before March 1, 1913) as…
       • § 24964 Whenever a taxpayer has realized gain or loss upon the receipt after January 1, 1928, at a time when it was subject to a tax under this part, of all or…
       • § 24965 In the case of a share of stock issued pursuant to Section 303(c) of the Federal National Mortgage Association Charter Act (12 U.S.C., Sec. 1718), the basis of…
       • § 24966 (a) The basis in stock purchased shall be reduced by the nontaxed portion of any extraordinary dividend received as provided in Section 1059 of the Internal…
       • § 24966.1 Section 1059A of the Internal Revenue Code, relating to limitation on taxpayer’s basis or inventory cost in property imported from related persons, shall…
       • § 24966.2 Section 1060 of the Internal Revenue Code, relating to special allocation rules for certain asset acquisitions, shall apply, except as otherwise provided.
    5. ARTICLE 4.5. Capital Gains and Losses §§ 24990–24995 · 12 sections

       • § 24990 Subchapter P of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to capital gains and losses, shall apply, except as otherwise provided.
       • § 24990.1 The amendments made by Section 126(a) of the Consolidated Appropriations Act, 2016 (Public Law 114-113) to Section 1202(a)(4) of the Internal Revenue Code,…
       • § 24990.2 Section 301 of Title III of Division A of the Emergency Economic Stabilization Act of 2008 (Public Law 110-343), relating to gain or loss from sale of certain…
       • § 24990.4 For taxable years beginning on or after January 1, 1997: (a) Section 1237(a) of the Internal Revenue Code, relating to real property subdivided for sale, is…
       • § 24990.5 The provisions of Section 1212 of the Internal Revenue Code, relating to capital loss carrybacks and carryovers, are modified as follows: (a) Section…
       • § 24990.6 (a) Section 1245(a)(2)(C) of the Internal Revenue Code, relating to certain deductions treated as amortization, is modified to also refer to Sections 24356.2,…
       • § 24990.7 The provisions of Section 1248 of the Internal Revenue Code, relating to gain from certain sales or exchanges of stock in certain foreign corporations, shall…
       • § 24990.8 For taxable years beginning on or after January 1, 2010, specific reference to Section 1223(4) to (16), inclusive, of the Internal Revenue Code in this part…
       • § 24990.9 The amendments made to Sections 1221(a)(3) and 1231(b)(1)(C) of the Internal Revenue Code by Section 13314 of Public Law 115-97, relating to certain…
       • § 24991 Section 1275(a)(3) of the Internal Revenue Code, relating to the definition of tax-exempt obligation, does not apply but instead the term “tax-exempt…
       • § 24993 (a) Section 7872 of the Internal Revenue Code, relating to the treatment of loans with below market interest rates, shall apply, except as otherwise provided.…
       • § 24995 The provisions of Part VI of Subchapter P of Chapter 1 of Subtitle A of the Internal Revenue Code, relating to treatment of certain passive foreign investment…
    6. ARTICLE 5. Wash Sales of Stock or Securities § 24998 · 1 section

       • § 24998 The provisions of Sections 1091 and 1092 of the Internal Revenue Code, relating to loss from wash sales of stock or securities, and straddles, respectively,…
17. CHAPTER 17. Allocation of Income §§ 25101–25141 · 44 sections

    1. ARTICLE 1. General Provisions §§ 25101–25108 · 12 sections

       • § 25101 When the income of a taxpayer subject to the tax imposed under this part is derived from or attributable to sources both within and without the state the tax…
       • § 25101.1 The amendments made at the 1957 Regular Session of the Legislature to Section 25101 of the Revenue and Taxation Code shall be applicable only with respect to…
       • § 25101.15 If the income of two or more taxpayers is derived solely from sources within this state and their business activities are such that if conducted within and…
       • § 25101.3 The property factor as it relates to the aircraft of an air carrier or foreign air carrier, as defined in Section 1150, or the operator of an air taxi, as…
       • § 25102 In the case of two or more persons, as defined in Section 19 of this code, owned or controlled directly or indirectly by the same interests, the Franchise Tax…
       • § 25103 In the case of a corporation doing business within the meaning of this part, whether under agreement or otherwise, in such manner as either directly or…
       • § 25104 In the case of a corporation liable to report under this part owning or controlling, either directly or indirectly, another corporation, or other corporations,…
       • § 25105 (a) For purposes of this article, other than Section 25102, the income and apportionment factors of two or more corporations shall be included in a combined…
       • § 25106 (a) (1) In any case in which the income of a corporation is or has been determined under this chapter with reference to the income and apportionment factors of…
       • § 25106.5 (a) The Franchise Tax Board may adopt regulations necessary to ensure that the tax liability or net income of any taxpayer whose income derived from or…
       • § 25107 (a) For the purposes of allocation and apportionment of income under Sections 25101 and 25121, an international banking facility maintained by a bank within…
       • § 25108 (a) For corporations whose income is subject to the provisions of Section 25101 or 25101.15, the net operating loss determined in accordance with Section 172…
    2. ARTICLE 1.5. Water's-Edge Election §§ 25110–25116 · 7 sections

       • § 25110 (a) Notwithstanding Section 25101, a qualified taxpayer, as defined in paragraph (2) of subdivision (b), that is subject to the tax imposed under this part,…
       • § 25111 (a) For taxable years beginning before January 1, 2003, the making of a water’s-edge election as provided for in Section 25110 shall be made by contract with…
       • § 25111.1 (a) For any taxable year beginning on or after January 1, 1994, consideration for water’s-edge contracts in existence as of that date is no longer provided for…
       • § 25112 (a) If a taxpayer electing to file under Section 25110 fails to supply any information described in subdivision (b), the taxpayer shall pay a penalty of one…
       • § 25113 (a) Except as provided in subdivision (f), for taxable years beginning on or after January 1, 2003, the election provided for in Section 25110 shall be made on…
       • § 25114 (a) The Franchise Tax Board, for purposes of administering the provisions of this article, shall examine all returns filed by taxpayers subject to these…
       • § 25116 Notwithstanding paragraph (1) of subdivision (a) of Section 23051.5, when provisions of this article refer to provisions of the Internal Revenue Code that do…
    3. ARTICLE 2. Uniform Division of Income for Tax Purposes Act §§ 25120–25141 · 25 sections

       • § 25120 As used in Sections 25120 to 25139, inclusive, which shall hereafter be referred to as “this act,” unless the context otherwise requires: (a) “Business income”…
       • § 25121 Any taxpayer having income from business activity which is taxable both within and without this state shall allocate and apportion its net income as provided…
       • § 25122 For purposes of allocation and apportionment of income under this act, a taxpayer is taxable in another state if (a) in that state it is subject to a net…
       • § 25123 Rents and royalties from real or tangible personal property, capital gains, interest, dividends, or patent or copyright royalties, to the extent that they…
       • § 25124 (a) Net rents and royalties from real property located in this state are allocable to this state. (b) Net rent and royalties from tangible personal property…
       • § 25125 (a) Capital gains and losses from sales of real property located in this state are allocable to this state. (b) Capital gains and losses from sales of tangible…
       • § 25126 Interest and dividends are allocable to this state if the taxpayer’s commercial domicile is in this state.
       • § 25127 (a) Patent and copyright royalties are allocable to this state: (1) If and to the extent that the patent or copyright is utilized by the payor in this state,…
       • § 25128 (a) Notwithstanding Section 38006, for taxable years beginning before January 1, 2013, all business income shall be apportioned to this state by multiplying…
       • § 25128.7 Notwithstanding Section 38006, for taxable years beginning on or after January 1, 2013, all business income of an apportioning trade or business, other than an…
       • § 25128.9 (a) The Legislature finds and declares all of the following: (1) In 1966, the California Legislature enacted the Uniform Division of Income for Tax Purposes…
       • § 25129 The property factor is a fraction, the numerator of which is the average value of the taxpayer’s real and tangible personal property owned or rented and used…
       • § 25130 Property owned by the taxpayer is valued at its original cost. Property rented by the taxpayer is valued at eight times the net annual rental rate. Net annual…
       • § 25131 The average value of property shall be determined by averaging the values at the beginning and ending of the taxable year but the Franchise Tax Board may…
       • § 25132 The payroll factor is a fraction, the numerator of which is the total amount paid in this state during the taxable year by the taxpayer for compensation, and…
       • § 25133 Compensation is paid in this state if: (a) The individual’s service is performed entirely within the state; or (b) The individual’s service is performed both…
       • § 25134 The sales factor is a fraction, the numerator of which is the total sales of the taxpayer in this state during the taxable year, and the denominator of which…
       • § 25135 (a) Sales of tangible personal property are in this state if: (1) The property is delivered or shipped to a purchaser, other than the United States government,…
       • § 25136 (a) Notwithstanding Section 38006, for taxable years beginning on or after January 1, 2013, sales, other than sales of tangible personal property, are in this…
       • § 25136.1 (a) For taxable years beginning on or after January 1, 2013, a qualified taxpayer that apportions its business income under Section 25128.7 shall apply the…
       • § 25137 If the allocation and apportionment provisions of this act do not fairly represent the extent of the taxpayer’s business activity in this state, the taxpayer…
       • § 25138 This act shall be so construed as to effectuate its general purpose to make uniform the law of those states which enact it. Enactment of Article IV of the…
       • § 25139 Sections 25120 to 25139, inclusive, may be cited as the Uniform Division of Income for Tax Purposes Act.
       • § 25140 Accounting procedures shall be adopted which will separately reflect the revenues attributable to dividends received by corporations having commercial…
       • § 25141 (a) For purposes of this section, the following definitions shall apply: (1) “Entity” means an individual, corporation, association, partnership, limited…