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Changes to 2007 Form

Updates to 2007 Form 3726 and Instructions - Deferred Intercompany Stock Account (DISA) and Capital Gains Information

Revision Date: 01/18/2008

Revision Details: The cite listed in the title of Part III is incorrect. This part of the form details when there has been a triggering event and the amounts that would flow through as a capital gain to Schedule D.

  • Form 3726, Side 1, Part III, heading

Previously read:

Part III Current Year DISA Capital Gains Information (Cal. Code Regs., tit 18 section 25106.5-c(1)(b)).

Revised to:

Part III Current Year DISA Capital Gains Information (Cal. Code Regs., tit 18 section 25106.5-1(f)(1)(B)).

The cite being corrected would cause confusion requiring the taxpayer to do additional research or read the instructions where the cite is correct. The incorrect cite deals with apportionment and not with DISA or DISA related capital gains. This is an internet only form and only a few taxpayers will be using Form 3726. The taxpayer using this form would file a combined report. The incorrect cite would not be an obstacle to these taxpayers in correctly filing their California return.

The revised Internet version is available for download.


Updates to 2007 Form 3726 Instructions - Deferred Intercompany Stock Account (DISA) and Capital Gains Information

Revision Date: 01/03/2008

Revision Details: The current instructions for column (a) instructions are incorrect.

  • Page 1, Column 3, heading of paragraph: Column (a) - Post Event Percentage

Previously read:

If the ownership percentage in column (a) is less then 50% the recognition ratio is 1.

If the post-event ownership percentage of the distributor is 50% or less, the DISA balances...

Revised to:

If the ownership percentage in column (a) is less than 50% the recognition ratio is 1.

If the post-event ownership percentage of the distributor is less than 50%, the DISA balances...

The current instructions are incorrect and may cause the taxpayer to report an incorrect amount of tax liability. This revision will help taxpayers determine if a triggering event to fully recognize the DISA as a capital gain occurred.

The revised Internet version is available for download.

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