Changes to 2008 Forms
Updates to the Form 540/540A Instructions on 02/27/2013 –– Instructions for 540/540A Forms, California Resident Income Tax Returns
We replaced text on Page 13, Column 2, Box A, last bullet.
Excluded gain on the sale of qualified small business stock
Note: text deleted.
Reason for the changes
The Court of Appeal’s held in Cutler v. Franchise Tax Board (2012) 208 Cal. App. 4th 1247, that the qualified small business stock exclusion and deferral statutes under California Revenue and Taxation Code (R&TC) Sections 18152.5 and 18038.5 are unconstitutional. These sections are now invalid and unenforceable.
This revision increases the tax liability for taxpayers who reported a qualified small business stock exclusion or deferral for taxable years beginning on or after January 1, 2008.
Updates to the 2008 Form 540/540A Instructions -- California Resident Income Tax Return
The revised Internet version is available for download as of 01/16/2009.
Revision Details: This revision was made to correctly reflect the itemized deductions allowed on federal Schedule A (Form 1040), line 5.
- Page 12, column 1, box 2 (Form 540A - California Itemized Deductions Worksheet), line 2, bullet 1.
Line 5, state and local income tax:
Line 5, state and local income tax or general sales tax: