17081. Part II of Subchapter B of Chapter 1 of Subtitle A of the
Internal Revenue Code, relating to items that are specifically
included in gross income, shall apply, except as otherwise provided.
17083. Section 85 of the Internal Revenue Code, relating to
unemployment compensation, shall not apply.
17085. Section 72 of the Internal Revenue Code, relating to
annuities; certain proceeds of endowment and life insurance
contracts, is modified as follows:
(a) The amendments and transitional rules made by Public Law
99-514 shall be applicable to this part for the same transactions and
the same years as they are applicable for federal purposes, except
that the repeal of Section 72(d) of the Internal Revenue Code,
relating to repeal of special rule for employees' annuities, shall
apply only to the following:
(1) Any individual whose annuity starting date is after December
31, 1986.
(2) At the election of the taxpayer, any individual whose annuity
starting date is after July 1, 1986, and before January 1, 1987.
(b) The amount of a distribution from an individual retirement
account or annuity or employee trust or employee annuity that is
includable in gross income for federal purposes shall be reduced for
purposes of this part by the lesser of either of the following:
(1) An amount equal to the amount includable in federal gross
income for the taxable year.
(2) An amount equal to the basis in the account or annuity allowed
by Section 17507 (relating to individual retirement accounts and
simplified employee pensions), the increased basis allowed by
Sections 17504 and 17506 (relating to plans of self-employed
individuals), the increased basis allowed by Section 17501, or the
increased basis allowed by Section 17551 that is remaining after
adjustment for reductions in gross income under this provision in
prior taxable years.
(c) (1) Except as provided in paragraph (2), the amount of the
penalty imposed under this part shall be computed in accordance with
Sections 72(m), (q), (t), and (v) of the Internal Revenue Code, as
applicable for federal income tax purposes for the same taxable year,
using a rate of 2 1/2 percent, in lieu of the rate provided in those
sections.
(2) In the case where Section 72(t)(6) of the Internal Revenue
Code, relating to special rules for simple retirement accounts, as
applicable for federal income tax purposes for the same taxable year,
applies, the rate in paragraph (1) shall be 6 percent in lieu of the
2 1/2 percent rate specified therein.
(d) Section 72(f)(2) of the Internal Revenue Code shall be
applicable without applying the exceptions which immediately follow
that paragraph.
(e) The amendments made by Section 844 of the Pension Protection
Act of 2006 (Public Law 109-280) to Section 72(e) of the Internal
Revenue Code, shall not apply.
17085.7. (a) In the case of any distribution made on account of a
notice to withhold (pursuant to Section 18670 or 18670.5) on a
qualified retirement plan, no additional tax shall be imposed in
accordance with Section 72(t) of the Internal Revenue Code.
(b) This section shall apply to distributions after December 31,
1999.
17086. (a) Noncash patronage allocations from farmers' cooperative
and mutual associations (whether paid in capital stock, revolving
fund certificates, retain certificates, certificates of indebtedness,
letters of advice or in some other manner that discloses the dollar
amount of those noncash patronage allocations) may, at the election
of the taxpayer, be considered as income and included in gross income
for the taxable year in which received.
(b) If a taxpayer exercises the election provided for in
subdivision (a), the amount included in gross income shall be the
face amount of those allocations.
(c) If a taxpayer elects to exclude noncash patronage allocations
from gross income for the taxable year in which received, those
allocations shall be included in gross income in the year that they
are redeemed or realized upon.
(d) If a taxpayer exercises the election provided for in
subdivision (c), the face amount of those noncash patronage
allocations shall be disclosed in the return made for the taxable
year in which those noncash patronage allocations were received.
(e) If a taxpayer exercises the election provided for in
subdivision (a) or (c) for any taxable year, then the method of
computing income so adopted shall be adhered to with respect to all
subsequent taxable years unless with the approval of the Franchise
Tax Board a change to a different method is authorized.
(f) If a taxpayer has made the election provided for in
subdivision (c), then (1) the statutory period for the assessment of
a deficiency for any taxable year in which the amount of any noncash
patronage allocations are realized shall not expire prior to the
expiration of four years from the date the Franchise Tax Board is
notified by the taxpayer (in the manner as the Franchise Tax Board
may by regulation prescribe) of the realization of gain on those
allocations; and (2) that deficiency may be assessed prior to the
expiration of that four-year period, notwithstanding the provisions
of Section 19057 or the provisions of any other law or rule of law
which would otherwise prevent that assessment.
17087. (a) Section 86 of the Internal Revenue Code, relating to
Social Security and Tier 1 Railroad Retirement Benefits, shall not
apply.
(b) Section 72(r) of the Internal Revenue Code, relating to Tier 2
Railroad Retirement Benefits, shall not apply.
(c) Section 105(h) of the Internal Revenue Code, relating to sick
pay under the Railroad Unemployment Insurance Act, shall not apply.
17087.5. Subchapter S of Chapter 1 of Subtitle A of the Internal
Revenue Code, relating to tax treatment of "S corporations" and their
shareholders, shall apply, except as otherwise provided under this
part or Part 11 (commencing with Section 23001).
17087.6. If a limited liability company is classified as a
partnership for California tax purposes, a person with a membership
or economic interest shall take into account amounts required to be
recognized under Chapter 10 (commencing with Section 17851).
17088. (a) Subchapter M of Chapter 1 of Subtitle A of the Internal
Revenue Code, relating to regulated investment companies, real estate
investment trusts, real estate mortgage investment conduits, and
financial asset securitization investment trusts, shall apply, except
as otherwise provided.
(b) Section 17145, relating to exempt interest dividends, shall
apply in lieu of Section 852(b)(5) of the Internal Revenue Code.
(c) Section 852(b)(3)(D) of the Internal Revenue Code, relating to
treatment by shareholders of undistributed capital gains, shall not
apply.
17088.3. (a) Section 7518 of the Internal Revenue Code, relating to
tax incentives relating to merchant marine capital construction
funds, shall apply, except as otherwise provided.
(b) Section 7518(d)(2)(C) of the Internal Revenue Code is modified
as follows:
(1) By substituting "70 percent" in lieu of the reference to "the
percentage applicable under Section 243(a)(1)."
(2) To refer to Section 24402 in lieu of Section 243 of the
Internal Revenue Code.
(c) Section 7518(d)(2)(D) of the Internal Revenue Code is modified
to refer to "interest income exempt from taxation under this part"
in lieu of "interest income exempt from taxation under Section 103."
(d) Section 7518(g)(3) of the Internal Revenue Code is modified as
follows:
(1) To refer to Article 6 (commencing with Section 19101) of
Chapter 4 of Part 10.2 in lieu of Section 6601 of the Internal
Revenue Code.
(2) To refer to Article 7 (commencing with Section 19131) of
Chapter 4 of Part 10.2 in lieu of Section 6651 of the Internal
Revenue Code.
(e) Section 7518(g)(6) of the Internal Revenue Code is modified as
follows:
(1) By substituting a reference to "this part" in lieu of "Chapter
1" in each place in which it appears.
(2) To refer to Section 17041 in lieu of Section 1 of the Internal
Revenue Code.
(3) The last sentence in Section 7518(g)(6)(A) of the Internal
Revenue Code shall not apply.
17090. Gross income includes cash allowances received by an
employee under a parking cash-out program, except any portion used
for a ridesharing purpose and excluded from gross income by Section
17149.
17081. Part II of Subchapter B of Chapter 1 of Subtitle A of the
Internal Revenue Code, relating to items that are specifically
included in gross income, shall apply, except as otherwise provided.
17083. Section 85 of the Internal Revenue Code, relating to
unemployment compensation, shall not apply.
17085. Section 72 of the Internal Revenue Code, relating to
annuities; certain proceeds of endowment and life insurance
contracts, is modified as follows:
(a) The amendments and transitional rules made by Public Law
99-514 shall be applicable to this part for the same transactions and
the same years as they are applicable for federal purposes, except
that the repeal of Section 72(d) of the Internal Revenue Code,
relating to repeal of special rule for employees' annuities, shall
apply only to the following:
(1) Any individual whose annuity starting date is after December
31, 1986.
(2) At the election of the taxpayer, any individual whose annuity
starting date is after July 1, 1986, and before January 1, 1987.
(b) The amount of a distribution from an individual retirement
account or annuity or employee trust or employee annuity that is
includable in gross income for federal purposes shall be reduced for
purposes of this part by the lesser of either of the following:
(1) An amount equal to the amount includable in federal gross
income for the taxable year.
(2) An amount equal to the basis in the account or annuity allowed
by Section 17507 (relating to individual retirement accounts and
simplified employee pensions), the increased basis allowed by
Sections 17504 and 17506 (relating to plans of self-employed
individuals), the increased basis allowed by Section 17501, or the
increased basis allowed by Section 17551 that is remaining after
adjustment for reductions in gross income under this provision in
prior taxable years.
(c) (1) Except as provided in paragraph (2), the amount of the
penalty imposed under this part shall be computed in accordance with
Sections 72(m), (q), (t), and (v) of the Internal Revenue Code, as
applicable for federal income tax purposes for the same taxable year,
using a rate of 2 1/2 percent, in lieu of the rate provided in those
sections.
(2) In the case where Section 72(t)(6) of the Internal Revenue
Code, relating to special rules for simple retirement accounts, as
applicable for federal income tax purposes for the same taxable year,
applies, the rate in paragraph (1) shall be 6 percent in lieu of the
2 1/2 percent rate specified therein.
(d) Section 72(f)(2) of the Internal Revenue Code shall be
applicable without applying the exceptions which immediately follow
that paragraph.
(e) The amendments made by Section 844 of the Pension Protection
Act of 2006 (Public Law 109-280) to Section 72(e) of the Internal
Revenue Code, shall not apply.
17085.7. (a) In the case of any distribution made on account of a
notice to withhold (pursuant to Section 18670 or 18670.5) on a
qualified retirement plan, no additional tax shall be imposed in
accordance with Section 72(t) of the Internal Revenue Code.
(b) This section shall apply to distributions after December 31,
1999.
17086. (a) Noncash patronage allocations from farmers' cooperative
and mutual associations (whether paid in capital stock, revolving
fund certificates, retain certificates, certificates of indebtedness,
letters of advice or in some other manner that discloses the dollar
amount of those noncash patronage allocations) may, at the election
of the taxpayer, be considered as income and included in gross income
for the taxable year in which received.
(b) If a taxpayer exercises the election provided for in
subdivision (a), the amount included in gross income shall be the
face amount of those allocations.
(c) If a taxpayer elects to exclude noncash patronage allocations
from gross income for the taxable year in which received, those
allocations shall be included in gross income in the year that they
are redeemed or realized upon.
(d) If a taxpayer exercises the election provided for in
subdivision (c), the face amount of those noncash patronage
allocations shall be disclosed in the return made for the taxable
year in which those noncash patronage allocations were received.
(e) If a taxpayer exercises the election provided for in
subdivision (a) or (c) for any taxable year, then the method of
computing income so adopted shall be adhered to with respect to all
subsequent taxable years unless with the approval of the Franchise
Tax Board a change to a different method is authorized.
(f) If a taxpayer has made the election provided for in
subdivision (c), then (1) the statutory period for the assessment of
a deficiency for any taxable year in which the amount of any noncash
patronage allocations are realized shall not expire prior to the
expiration of four years from the date the Franchise Tax Board is
notified by the taxpayer (in the manner as the Franchise Tax Board
may by regulation prescribe) of the realization of gain on those
allocations; and (2) that deficiency may be assessed prior to the
expiration of that four-year period, notwithstanding the provisions
of Section 19057 or the provisions of any other law or rule of law
which would otherwise prevent that assessment.
17087. (a) Section 86 of the Internal Revenue Code, relating to
Social Security and Tier 1 Railroad Retirement Benefits, shall not
apply.
(b) Section 72(r) of the Internal Revenue Code, relating to Tier 2
Railroad Retirement Benefits, shall not apply.
(c) Section 105(h) of the Internal Revenue Code, relating to sick
pay under the Railroad Unemployment Insurance Act, shall not apply.
17087.5. Subchapter S of Chapter 1 of Subtitle A of the Internal
Revenue Code, relating to tax treatment of "S corporations" and their
shareholders, shall apply, except as otherwise provided under this
part or Part 11 (commencing with Section 23001).
17087.6. If a limited liability company is classified as a
partnership for California tax purposes, a person with a membership
or economic interest shall take into account amounts required to be
recognized under Chapter 10 (commencing with Section 17851).
17088. (a) Subchapter M of Chapter 1 of Subtitle A of the Internal
Revenue Code, relating to regulated investment companies, real estate
investment trusts, real estate mortgage investment conduits, and
financial asset securitization investment trusts, shall apply, except
as otherwise provided.
(b) Section 17145, relating to exempt interest dividends, shall
apply in lieu of Section 852(b)(5) of the Internal Revenue Code.
(c) Section 852(b)(3)(D) of the Internal Revenue Code, relating to
treatment by shareholders of undistributed capital gains, shall not
apply.
17088.3. (a) Section 7518 of the Internal Revenue Code, relating to
tax incentives relating to merchant marine capital construction
funds, shall apply, except as otherwise provided.
(b) Section 7518(d)(2)(C) of the Internal Revenue Code is modified
as follows:
(1) By substituting "70 percent" in lieu of the reference to "the
percentage applicable under Section 243(a)(1)."
(2) To refer to Section 24402 in lieu of Section 243 of the
Internal Revenue Code.
(c) Section 7518(d)(2)(D) of the Internal Revenue Code is modified
to refer to "interest income exempt from taxation under this part"
in lieu of "interest income exempt from taxation under Section 103."
(d) Section 7518(g)(3) of the Internal Revenue Code is modified as
follows:
(1) To refer to Article 6 (commencing with Section 19101) of
Chapter 4 of Part 10.2 in lieu of Section 6601 of the Internal
Revenue Code.
(2) To refer to Article 7 (commencing with Section 19131) of
Chapter 4 of Part 10.2 in lieu of Section 6651 of the Internal
Revenue Code.
(e) Section 7518(g)(6) of the Internal Revenue Code is modified as
follows:
(1) By substituting a reference to "this part" in lieu of "Chapter
1" in each place in which it appears.
(2) To refer to Section 17041 in lieu of Section 1 of the Internal
Revenue Code.
(3) The last sentence in Section 7518(g)(6)(A) of the Internal
Revenue Code shall not apply.
17090. Gross income includes cash allowances received by an
employee under a parking cash-out program, except any portion used
for a ridesharing purpose and excluded from gross income by Section
17149.
17081. Part II of Subchapter B of Chapter 1 of Subtitle A of the
Internal Revenue Code, relating to items that are specifically
included in gross income, shall apply, except as otherwise provided.
17083. Section 85 of the Internal Revenue Code, relating to
unemployment compensation, shall not apply.
17085. Section 72 of the Internal Revenue Code, relating to
annuities; certain proceeds of endowment and life insurance
contracts, is modified as follows:
(a) The amendments and transitional rules made by Public Law
99-514 shall be applicable to this part for the same transactions and
the same years as they are applicable for federal purposes, except
that the repeal of Section 72(d) of the Internal Revenue Code,
relating to repeal of special rule for employees' annuities, shall
apply only to the following:
(1) Any individual whose annuity starting date is after December
31, 1986.
(2) At the election of the taxpayer, any individual whose annuity
starting date is after July 1, 1986, and before January 1, 1987.
(b) The amount of a distribution from an individual retirement
account or annuity or employee trust or employee annuity that is
includable in gross income for federal purposes shall be reduced for
purposes of this part by the lesser of either of the following:
(1) An amount equal to the amount includable in federal gross
income for the taxable year.
(2) An amount equal to the basis in the account or annuity allowed
by Section 17507 (relating to individual retirement accounts and
simplified employee pensions), the increased basis allowed by
Sections 17504 and 17506 (relating to plans of self-employed
individuals), the increased basis allowed by Section 17501, or the
increased basis allowed by Section 17551 that is remaining after
adjustment for reductions in gross income under this provision in
prior taxable years.
(c) (1) Except as provided in paragraph (2), the amount of the
penalty imposed under this part shall be computed in accordance with
Sections 72(m), (q), (t), and (v) of the Internal Revenue Code, as
applicable for federal income tax purposes for the same taxable year,
using a rate of 2 1/2 percent, in lieu of the rate provided in those
sections.
(2) In the case where Section 72(t)(6) of the Internal Revenue
Code, relating to special rules for simple retirement accounts, as
applicable for federal income tax purposes for the same taxable year,
applies, the rate in paragraph (1) shall be 6 percent in lieu of the
2 1/2 percent rate specified therein.
(d) Section 72(f)(2) of the Internal Revenue Code shall be
applicable without applying the exceptions which immediately follow
that paragraph.
(e) The amendments made by Section 844 of the Pension Protection
Act of 2006 (Public Law 109-280) to Section 72(e) of the Internal
Revenue Code, shall not apply.
17085.7. (a) In the case of any distribution made on account of a
notice to withhold (pursuant to Section 18670 or 18670.5) on a
qualified retirement plan, no additional tax shall be imposed in
accordance with Section 72(t) of the Internal Revenue Code.
(b) This section shall apply to distributions after December 31,
1999.
17086. (a) Noncash patronage allocations from farmers' cooperative
and mutual associations (whether paid in capital stock, revolving
fund certificates, retain certificates, certificates of indebtedness,
letters of advice or in some other manner that discloses the dollar
amount of those noncash patronage allocations) may, at the election
of the taxpayer, be considered as income and included in gross income
for the taxable year in which received.
(b) If a taxpayer exercises the election provided for in
subdivision (a), the amount included in gross income shall be the
face amount of those allocations.
(c) If a taxpayer elects to exclude noncash patronage allocations
from gross income for the taxable year in which received, those
allocations shall be included in gross income in the year that they
are redeemed or realized upon.
(d) If a taxpayer exercises the election provided for in
subdivision (c), the face amount of those noncash patronage
allocations shall be disclosed in the return made for the taxable
year in which those noncash patronage allocations were received.
(e) If a taxpayer exercises the election provided for in
subdivision (a) or (c) for any taxable year, then the method of
computing income so adopted shall be adhered to with respect to all
subsequent taxable years unless with the approval of the Franchise
Tax Board a change to a different method is authorized.
(f) If a taxpayer has made the election provided for in
subdivision (c), then (1) the statutory period for the assessment of
a deficiency for any taxable year in which the amount of any noncash
patronage allocations are realized shall not expire prior to the
expiration of four years from the date the Franchise Tax Board is
notified by the taxpayer (in the manner as the Franchise Tax Board
may by regulation prescribe) of the realization of gain on those
allocations; and (2) that deficiency may be assessed prior to the
expiration of that four-year period, notwithstanding the provisions
of Section 19057 or the provisions of any other law or rule of law
which would otherwise prevent that assessment.
17087. (a) Section 86 of the Internal Revenue Code, relating to
Social Security and Tier 1 Railroad Retirement Benefits, shall not
apply.
(b) Section 72(r) of the Internal Revenue Code, relating to Tier 2
Railroad Retirement Benefits, shall not apply.
(c) Section 105(h) of the Internal Revenue Code, relating to sick
pay under the Railroad Unemployment Insurance Act, shall not apply.
17087.5. Subchapter S of Chapter 1 of Subtitle A of the Internal
Revenue Code, relating to tax treatment of "S corporations" and their
shareholders, shall apply, except as otherwise provided under this
part or Part 11 (commencing with Section 23001).
17087.6. If a limited liability company is classified as a
partnership for California tax purposes, a person with a membership
or economic interest shall take into account amounts required to be
recognized under Chapter 10 (commencing with Section 17851).
17088. (a) Subchapter M of Chapter 1 of Subtitle A of the Internal
Revenue Code, relating to regulated investment companies, real estate
investment trusts, real estate mortgage investment conduits, and
financial asset securitization investment trusts, shall apply, except
as otherwise provided.
(b) Section 17145, relating to exempt interest dividends, shall
apply in lieu of Section 852(b)(5) of the Internal Revenue Code.
(c) Section 852(b)(3)(D) of the Internal Revenue Code, relating to
treatment by shareholders of undistributed capital gains, shall not
apply.
17088.3. (a) Section 7518 of the Internal Revenue Code, relating to
tax incentives relating to merchant marine capital construction
funds, shall apply, except as otherwise provided.
(b) Section 7518(d)(2)(C) of the Internal Revenue Code is modified
as follows:
(1) By substituting "70 percent" in lieu of the reference to "the
percentage applicable under Section 243(a)(1)."
(2) To refer to Section 24402 in lieu of Section 243 of the
Internal Revenue Code.
(c) Section 7518(d)(2)(D) of the Internal Revenue Code is modified
to refer to "interest income exempt from taxation under this part"
in lieu of "interest income exempt from taxation under Section 103."
(d) Section 7518(g)(3) of the Internal Revenue Code is modified as
follows:
(1) To refer to Article 6 (commencing with Section 19101) of
Chapter 4 of Part 10.2 in lieu of Section 6601 of the Internal
Revenue Code.
(2) To refer to Article 7 (commencing with Section 19131) of
Chapter 4 of Part 10.2 in lieu of Section 6651 of the Internal
Revenue Code.
(e) Section 7518(g)(6) of the Internal Revenue Code is modified as
follows:
(1) By substituting a reference to "this part" in lieu of "Chapter
1" in each place in which it appears.
(2) To refer to Section 17041 in lieu of Section 1 of the Internal
Revenue Code.
(3) The last sentence in Section 7518(g)(6)(A) of the Internal
Revenue Code shall not apply.
17090. Gross income includes cash allowances received by an
employee under a parking cash-out program, except any portion used
for a ridesharing purpose and excluded from gross income by Section
17149.
