Ed Zollars, CPA" <ezollar[at]mindspring.com> wrote:
- quote -

Here's the quote from the CA Revenue and Taxation Code
17024.5(d):

(d) When applying the Internal Revenue Code for purposes of
this part, regulations promulgated in final form or issued
as temporary regulations by "the secretary" shall be
applicable as regulations under this part to the extent that
they do not conflict with this part or with regulations
issued by the Franchise Tax Board.

Alan
http://taxtopics.net

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Peter C. Gatto wrote:

- quote -

Structurally, as I understnd it, the FTB would have to take
the position that the IRS regulations are essentially an
erroneous interpretation of Section 121 (that they aren't
what Section 121 says) since California law references the
federal law, and the IRS is charged with administratively
interpreting that law. If the FTB were going to take that
position, I would expect the state to rather loudly make
that statement. As well, since real estate taxation is a
rather historically politically charged issue in California,
I'm not sure the FTB would want to stir up *that* hornets
nest <grin> .

However, someone with more California experience might want
to comment on this one.

--
Ed Zollars, CPA
Phoenix, Arizona

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