Client is doing a 1031 exchange from property located in Calif, for property located in Az. He wants to do the 10031 for federal purposes, but opt out of it for Calif and just pay the tax on the gain and be done with it. Does anybody know if this is possible? Thank you.
Where in the CA tax code does it say that a 1031 exchange for US purposes can not be treated as a sale for CA purposes. Wouldn’t the FTB want the tax money now rather than waiting indefinitely or even never for the tax money. There are articles on the web talking about this issue but they don’t specify the legal process.
R&TC sec 17024.5 provides conformity to federal. The only nonconformity in 1031 we have is for some sales on tangible personal property nonconformity for taxpayers with less than $250k of federal AGI. We fully conform for real property