§ 18036. — 18036. (Amended by Stats. 2025, Ch. 231, Sec. 59.)

(a)
In addition to the adjustments to basis provided by Section 1016(a) of the Internal Revenue Code, a proper adjustment shall also be made for amounts allowed as deductions as deferred expenses under subdivision (b) of former Section 17689 or former Section 17689.5 (relating to certain exploration expenditures) and resulting in a reduction of the taxpayer’s taxes under this part, but not less than the amounts allowable under those sections for the taxable year and prior years. A proper adjustment shall also be made for amounts deducted under Section 17252.5, 17265, or 17266.
(b)
Notwithstanding the provisions of Sections 164(a) and 1016(a)
of the Internal Revenue Code, no adjustment to basis shall be made for any of the following:
(1)
Abandonment fees paid in respect of property on which the open-space easement is terminated under Section 51061 or 51093 of the Government Code.
(2)
Tax recoupment fees paid under Section 51142 of the Government Code.
(3)
Sales or use tax which is paid or incurred by the taxpayer in connection with the acquisition of property for which a tax credit is claimed pursuant to Section 17052.13.
(c)
The provisions of Section 1016(c) of the Internal Revenue Code, relating to increase in basis of property on which additional estate tax is imposed, shall be applicable.
(d)
The amendments made to Section 1016 of the Internal Revenue Code by Section 1913(a) of Public Law 102-486, relating to deduction for clean-fuel vehicles and certain refueling property, shall apply to property placed in service after June 30, 1993, without respect to taxable year.
(e)
The provisions of Section 1016(a)(38) of the Internal Revenue Code, relating to basis adjustments for capital gains invested in opportunity zones, shall not apply.

Legislative History

Amended by Stats. 2025, Ch. 231, Sec. 59. (SB 711) Effective October 1, 2025.