Income and corporation taxes: net capital gains: exclusion.

The Personal Income Tax Law and the Corporation Tax Law provide that gain or loss upon the disposition of a capital asset is determined by reference to the adjusted basis of that asset. This bill would, for taxable years beginning on or after January 1, 2012, and before January 1, 2015, provide that gross income does not include 50% of any net capital gain, as defined, from the sale or exchange of a capital asset, as defined, that is held for more than 3 years, as specified. The California Constitution authorizes the Governor to declare a fiscal emergency and to call the Legislature into special session for that purpose. The Governor issued a proclamation declaring a fiscal emergency, and calling a special session for this purpose, on January 8, 2010. This bill would state that it addresses the fiscal emergency declared by the Governor by proclamation issued on January 8, 2010, pursuant to the California Constitution. This bill would take effect immediately as a tax levy.