By Nail Kalin
The formula stated in the November 2020 e-News for parent-child or grandparent-grandchild transfers for a property whose new assessed value is more than $1,000,000 over the parents/grandparents taxable value was misstated. The correct way to calculate the new taxable value pursuant to Article XIIIA, Section 2.1(c)(1) in Proposition 19 is as follows: Parent/grandparent taxable value + new assessed value – (the sum of the parent/grandparent taxable value and $1,000,000). Stated differently, and easier, the new taxable value to child/grandchild = new assessed value – $1,000,000. On Monday January 25, at 12 noon the Business Law Section and Real Property Law Section will hold a joint webinar discussing Proposition 19 and its impact on residential replacement properties for seniors and others, red flags for investment clients under the intergenerational transfer portion of Proposition 19, and other property tax laws benefitting victims of wildfires.
The full text of Proposition 19 is available at https://vig.cdn.sos.ca.gov/2020/general/pdf/topl.pdf. Reader are advised to have their clients speak with a tax professional before making estate-planning or other decisions under Proposition 19.