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Changes to 2011 Forms

Updates to the Form 3510 on 03/03/2014 –– Credit for Prior Year Alternative Minimum Tax - Individuals or Fiduciaries

We replaced text on Instructions, Page 1, Column 2, Section C - Exclusions and Deferral Preferences, Exclusions, after Bullet 2.

Previous Version

Exclusions are those adjustments and preference items that cause a permanent difference in the amount of tax you pay. The adjustments and preference items include all of the following:

  • The standard deduction or itemized deductions.
  • Depletion.
  • Note: new text added.

Revised Version

Exclusions are those adjustments and preference items that cause a permanent difference in the amount of tax you pay. The adjustments and preference items include all of the following:

  • The standard deduction or itemized deductions.
  • Depletion.
  • The exclusion for 50% of the gain on the sale of qualified small business stock described in California Revenue and Taxation Code (R&TC) Section 18152.5.

Reason for the changes

AB 1412 (Stats. 2013, ch. 546), signed by the Governor on October 4, 2013, retroactively allows the Qualified Small Business Stock (QSBS) deferral and 50 percent gain exclusion for tax years 2008 through 2012.

Impact

This revision may decrease the tax liability for taxpayers who did not report a QSBS exclusion or deferral for taxable years beginning on or after January 1, 2008.

Back to Tax Form Changes for 2011


Updates to the Form 3510 on 02/13/2013 –– Credit for Prior Year Alternative Minimum Tax - Individuals or Fiduciaries

We replaced text on the Instructions, Page 1, Column 2, Section C - Exclusions and Deferral Preferences, Exclusions, Bullet 3.

Previous Version

Exclusions are those adjustments and preference items that cause a permanent difference in the amount of tax you pay. The adjustments and preference items include all of the following:

  1. The standard deduction or itemized deductions.
  2. Depletion.
  3. The exclusion for 50% of the gain on the sale of qualified small business stock described in California Revenue and Taxation Code (R&TC) Section 18152.5.

Revised Version

Exclusions are those adjustments and preference items that cause a permanent difference in the amount of tax you pay. The adjustments and preference items include all of the following:

  1. The standard deduction or itemized deductions.
  2. Depletion.
  3. 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.

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.

Back to Tax Form Changes for 2011