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Changes to 2011 Forms

Updates to the 3809 Booklet on 02/26/2014 –– Targeted Tax Area Deduction and Credit Summary

We replaced text on Page 16, Worksheet IV, Section A, Line 6.

Previous Version

6. Enter the amount from form FTB 3805V, Part 1, Section A, Line 18

Revised Version

6. Enter the amount from form FTB 3805V, Part 1, Section A, Line 20

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. The FTB 3809 Booklet, Worksheet IV is indirectly affected by AB 1412 changes. Worksheet IV references form FTB 3805V which had line number changes due to AB 1412.

Impact

No tax impact.

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Updates to the 3809 Booklet on 02/14/2013 –– Targeted Tax Area Deduction and Credit Summary

We replaced text on Page 16, Worksheet IV, Section A, Line 6.

Previous Version

Enter the amount from form FTB 3805V, Part 1, Section A, Line 20

Revised Version

Enter the amount from form FTB 3805V, Part 1, Section A, Line 18

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

The 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.

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