California Revenue and Taxation Code

§ 23040.1

RTC § 23040.1 Effective Jan 1, 2002Div. 2 · Part 11 · Ch. 1 · Art. 2

Statute text

(a)Notwithstanding Sections 23040 and 25101, income derived from or attributable to sources within this state shall not include:

(1)The distributive share of interest, dividends, and gains from the sale or exchange of qualifying investment securities derived by a corporation that is a partner in a partnership that qualifies as an investment partnership under Section 17955, whether or not the partnership has a usual place of business in this state, if the income from the partnership is the corporation’s only income derived from or attributable to sources within this state.

(2)Income, gain, or loss from stocks or securities received by an alien corporation whose sole activities in this state involve trading in those stocks or securities for the corporation’s own account within the meaning of Section 864(b)(2)(A)(ii) of the Internal Revenue Code, whether the trading is done by the corporation or its employees or through a resident broker, commission agent, custodian, or other agent, and whether or not any employee or agent has discretionary authority to make decisions in effecting the transactions. This paragraph does not apply to a dealer in stocks or securities.

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Legislative history

Amended by Stats. 2001, Ch. 543, Sec. 23. Effective January 1, 2002.