At its December 16 meeting, the FTB directed its staff to alter course on the controversial "Mechanics of Combined Reporting" regulations (proposed Regs. 25106.5 through 25106.5-11). Staff was directed to drop the main part of the regulation relating to the Joyce/Finnigan apportionment issue, and reverse the decision on the treatment of tax credits and the carryover of capital gains and losses.
Staff was directed to pursue regulatory action reversing their audit position which has denied taxpayers the ability to net capital gains and losses among members of a unitary group in the current year. Staff also was directed to work with industry representatives to begin drafting regulations dealing with the carryover of capital losses and the treatment of tax credits.
On January 25th, FTB staff met in Sacramento with interested parties to discuss issues relating to the proposed regulation, as well as to begin the dialogue on potential regulatory acts relating to the capital loss carryover and tax credits.
Read more in Caltaxletter.
If you would like more information, please send your name, company name, telephone and fax numbers, and any comments to Greg Turner.