Trusts and Estates

Prang v. Los Angeles County Assessment Appeals Board

Cite as 15 Cal.5th 1152
Filed May 30, 2024
California Supreme Court

By Golnaz Yazdchi
Sheppard Mullin Richter & Hampton LLP

Headnote:  Property Tax Reassessment

Summary:  Transferring real properties from a corporation to a revocable trust resulted in a reassessment of the properties because the trust and corporation did not have identical ownership.

Super A Foods, Inc. owned real properties that operated as two Los Angeles supermarkets.  Super A had two classes of stock, voting stock and non-voting stock.  The voting stock shareholders in Super A held all control rights for the corporation.  In December 2014, Super A transferred its properties to the Amen Family 1990 Revocable Trust.  The Trust owned 92.8% of Super A’s stock (which included 100% of the voting stock), and four other members of the Amen family and a long-time employee of Super A owned the remaining 5.2%.  The minority shareholders were not beneficiaries of the Trust.  The properties were reassessed for property tax purposes as a result of the transfer to the Trust because the proportional ownership interests in the properties were not the same before and after the transfer because of the interests of the minority, individual shareholders.  The Los Angeles County Assessment Appeals Board reversed the decision of the assessor.  The assessor filed a petition for writ of mandate with the superior court, which was granted, and the Appeals Board vacated its decision. The trustees of the Trust appealed and the Court of Appeal affirmed.

The Supreme Court affirmed.  The transfer from the corporation, Super A, to the Trust was a change in ownership resulting in a reassessment because it did not fall within any exclusion for transactions involving a legal entity because the proportional ownership interests in the property, measured by all of the stock, not just voting stock, was not identical before and after the transfer.

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