Bill Text: CA AB2687 | 2011-2012 | Regular Session | Introduced

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Bill Title: Income taxes: charitable remainder trusts.

Spectrum: Partisan Bill (Democrat 6-0)

Status: (Engrossed - Dead) 2012-08-08 - In committee: Set, first hearing. Hearing canceled at the request of author. [AB2687 Detail]

Download: California-2011-AB2687-Introduced.html

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BILL NUMBER: AB 2687	INTRODUCED
	BILL TEXT


INTRODUCED BY   Committee on Revenue and Taxation (Perea (Chair),
Beall, Charles Calderon, Cedillo, Fuentes, and Gordon)

                        MARCH 12, 2012

   An act to repeal and add Section 17755 of the Revenue and Taxation
Code, relating to taxation, to take effect immediately, tax levy.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2687, as introduced, Committee on Revenue and Taxation. Income
taxes: charitable remainder trusts.
   The Personal Income Tax Law does not conform to the federal
Internal Revenue Code with regard to the taxation of specified
trusts. Existing law exempts any charitable remainder annuity trust
or charitable remainder unitrust from specified taxes unless that
trust has unrelated business taxable income, in which case that trust
shall be taxed, as provided.
   This bill would, for taxable years beginning on or after January
1, 2011, provide that a charitable remainder annuity trust and a
charitable remainder unitrust shall retain tax exempt status under
the federal Internal Revenue Code and would otherwise restate and
clarify the existing basis for tax liability on the part of those
trusts by reason of unrelated business taxable income.
   This bill would take effect immediately as a tax levy.
   Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  SECTION 1.  Section 17755 of the Revenue and Taxation Code is
repealed. 
   17755.  Section 664(c) of the Internal Revenue Code, relating to
the taxation of trusts, shall not apply and, in lieu thereof, a
charitable remainder annuity trust and a charitable remainder
unitrust shall, for any taxable year, not be subject to any tax
imposed under this part, unless that trust, for the taxable year, has
unrelated business taxable income, within the meaning of Section
23732, determined as if Chapter 4 (commencing with Section 23701) of
Part 11, applied to that trust. 
  SEC. 2.  Section 17755 is added to the Revenue and Taxation Code,
to read:
   17755.  For taxable years beginning on or after January 1, 2011,
Section 664(c)(2) of the Internal Revenue Code, relating to excise
tax, shall not apply and, in lieu thereof, the unrelated business
taxable income (as defined in Section 23732) of every charitable
remainder annuity trust or charitable remainder unitrust shall be
subject to tax under Section 17651.
  SEC. 3.  The Legislature hereby finds and declares that the
amendments made by this act to add Section 17755 to the Revenue and
Taxation Code serves a public purpose by preventing the loss of a tax
exemption for charitable remainder annuity trusts and charitable
remainder unitrusts.
  SEC. 4.  This act provides for a tax levy within the meaning of
Article IV of the Constitution and shall go into immediate effect.