Rules changes: assessors treating property bequests differently.

• Author: Williams, Len
• Position: CA Tax

There nave been some changes in the application of the rules pertaining to reassessments in the instances of children acquiring realty from their late parents.

Last year the Board of Equalization issued a separate Assessors' Handbook 401 on changes in ownership, which can be viewed al www.boe.ca.gov/proptaxes/pdf/ah401.pdf. The guidance changes die way many assessors had been approaching non-pro rata distributions. According to the ROE, if one child gets a residence, and its value is more than the beneficiary's share, the excess will be subject to reassessment.

For example, if the beneficiary's share is 50 percent and she instead gets 60 percent of the estate -- regardless of how it's balanced the five-sixths of the house will be five-sixths of the old base year, and the other one-sixth will be reassessed to a base al market value. Value normally is established as of the date of death.

According to Page 89 of the handbook: "If the trustee docs not have the authority to make a non-pro rata distribution, or a particular non-pro rata distribution is in excess of the recipient beneficiary's share of the trust property the excess is considered to be a transfer between the beneficiaries rather than from the trust or to a beneficiary. Additionally, if real property is distributed to all of the beneficiaries, any subsequent transfer between the beneficiaries is a change in ownership, unless an exclusion applies."

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'No One Has a Good Enough Memory to be a Consistently Successful Liar'

This was printed on a sign where I worked from 1956-59 in the Employment Office at Northrop Aviation in Hawthorne (I've no idea if it's still there). An April 201 1 SBK appeal was a classic example of this rule.

An Arizona resident failed to meet the requirements to exclude $390,000 (under IRC Sec. 121) from the sale of California property in 2004, since he was unable to prove that the properly was his principal residence totaling two or more years of Elm live years immediately preceding the sale of the property

In fact, under the penalty of perjury he had stated on Form 3953R that in 2004 he was not a California resident and he owned his own business in Arizona. Based on this information alone, it's unlikely that die taxpayer's principal residence in 2004 could have been in California. In addition, the taxpayer could not proffer any documentation to show that the subject property was his residential address in 2004, or at any time during the last...