Changes to 2011 Forms
Updates to the Schedule CA (540NR) Instructions on 02/19/2013 –– Instructions for 540NR Schedule CA, California Adjustments - Nonresidents and Part-Year Residents
We replaced text on Page 3, Column 2, Line 13, Bullet 1.
Previous Version
Gain on the sale of qualified small business stock which qualifies for the gain exclusion under IRC Section 1202.
Revised Version
Gain on the sale of qualified small business stock under IRC Section 1045 and IRC Section 1202.
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.
Impact
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.
