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Changes to 2011 Forms

Updates to the Form 540NR (Long) Instructions on 02/19/2013 –– Instructions for 540NR Long Form, California Nonresident or Part-Year Resident Income Tax Return (Long)

We replaced text on Page 18, Column 1, Box A, last bullet.

Previous Version

Excluded gain on the sale of qualified small business stock

Revised Version

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.


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