New California Proposition 13 Reporting Requirements Effective January 1, 2010
Effective January 1, 2010, California has adopted a new reporting requirement for transfers of ownership interests in entities that own California real property.
Any transfer of an ownership interest in an entity that directly or indirectly owns (or, in some cases, leases) California real property that results in a “change in control” or a “change in ownership” of such entity must be reported by the acquiring person or legal entity to the California State Board of Equalization within 45 days of such transfer, even if an exemption from reassessment is available. Prior to this change in law, entities were required to report transfers of ownership interests only (a) in response to standardized questions on California tax returns (e.g., Forms 565 and 568) or (b) if and when requested by the State Board of Equalization.
Failure to file with the State Board of Equalization within the required 45-day period will result in an automatic penalty of: 10 percent of the taxes applicable to the new base year value of the real property reassessed if a change in control or change in ownership has occurred, or 10 percent of the value of all taxable real property for the current year’s taxes as of the date the 45-day period expired if an exemption from reassessment is available.
At this time, the State Board of Equalization is requiring transfers to be reported on form BOE-100-B, Statement of Change in Control and Ownership of Legal Entities (see http://www.boe.ca.gov/proptaxes/pdf/boe100b.pdf).
If, in 2010, you have acquired ownership interests in an entity that directly or indirectly owns California real property, you may have an obligation to report such transaction to the State Board of Equalization. February 14th is the 45th day of the 2010 calendar year, and is therefore the earliest date by which a taxpayer might be obligated to file form BOE-100-B.
If you have any questions concerning this Legal Update, please feel free to contact any member of our Tax Group in Los Angeles at:
Pircher, Nichols & Meeks
1925 Century Park East
Los Angeles, California 90067
The PN&M Legal Update is published as a service to our clients and friends. It is intended to provide general information and should not be acted upon without first obtaining professional advice appropriately tailored to your individual needs.