TaxTalk and beyond.

• Author: Williams, Leonard W.
• Position: Californiatax - Tax law, taxation news - Column

Propositions 60, 90 and 110 provide for transferring the Prop. 13 tax basis from one property to another under certain circumstances and for certain categories of taxpayers.

There is some confusion about the rules, but help is available. The Board of Equalization issued a letter Feb. 6 (2006/010) to county assessors dubbed "Revenue and Taxation Code Section 69.5; Propositions 60, 90 and 110."

The 28-page document can be obtained at www.boe.ca.gov/proptaxes/pdf/lta06010.pdf.

It begins with a two-page summary of Sec. 69.5 and is followed by Q & As in 12 categories. The material seems to cover virtually every possible combination of events, and anyone advising clients in this realm should get a copy of the document.

Continued: Nevada Corporations Promoted as 'Tax Shelters'

The November 2005 issue of this column discussed ads that tout alleged tax benefits of incorporating in Nevada or forming a Nevada LLC. The promoters continue to sell their ideas.

Just as with the limited partnership sales pitches prior to the Internal Revenue Code of 1986, promoters often have given clients voluminous material, but the client is reluctant to pay for the time required to read and evaluate those materials.

One fact that will answer many of the inquiries is that California Revenue and Taxation Code Sec. 24271 is virtually a carbon copy of IRC Sec. 61--a California resident is taxable on all income, from whatever source.

So, as long as someone is a California resident, dividends, interest and capital gains--regardless of where they're generated--are taxable to the individual.

Scams and Frauds in General

A great listing of current scams and frauds can be found at www.quatloos.com, a public education website maintained by Financial Tax Fraud Education Associates, Inc., a California-based nonprofit.

Update: Offers in Compromise Program Streamlined

California's three tax agencies announced they simplified the OIC process by making a single form--DE 999CA, Multi-Agency Form for Offer In Compromise--that individuals can use for any of the state's tax agencies.

The form, which is valid for the Board of Equalization, Employment Development Department and FTB--can be obtained at www.edd.ca.gov/taxrep/de999ca.pdf.

CA Tobacco Tax Returns

The State Board of Equalization is mailing cigarette and tobacco product excise tax and use tax returns to California taxpayers who have purchased untaxed tobacco products (including cigarettes) from out of state merchants, by either mail...