FTB warns against abusive tax shelters in California.

• Position: Warning

The FTB has become aware of transactions involving parent corporations that artificially increase their basis in the stock of their subsidiaries, without any outlay of cash or property, prior to the parent selling the stock of the subsidiary to an unrelated third party.

FTB Notice 2011-03, available at www.calcpa.org/taxshelters, alerts taxpayers and their representatives that these transactions are tax avoidance...