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Any tax information or written tax advice contained herein (including any attachments) is not intended to be and cannot be used by any taxpayer for the purpose of avoiding tax penalties that may be imposed on the taxpayer. (The foregoing legend has been affixed pursuant to the U.S. Treasury Regulations governing tax practice.)
The matters highlighted on this website are presented in general terms and cannot be applied without consideration of all circumstances. NSBN will provide additional details upon request and will be pleased to discuss with our clients or their attorneys the possible effects of these matters in specific situations.
Email Alert
New Real Estate Change of Ownership Reporting Rules
January 25, 2010
In California whenever there is a change of ownership in real property, the transfer must be reported to the Board of Equalization/Tax Assessor. On such a transfer the county tax assessor may re-assess the property to current fair market value.
Many people were not aware that this rule also applied to situations where the property was owned by a legal entity (i.e. partnership, LLC, corporation) and there was a change of control (more than 50% ownership) of that entity. Under prior law, if no change of ownership report was filed, the Board of Equalization would usually send a letter requesting the report to be filed. If a timely response was made, the late filing penalties would be waived.
Under a new law effective as of January 1st, penalties will no longer be waived. If there is a change of entity control, a report must be filed with 45 days or a 10% (of the new tax) penalty will be imposed.
