On August 16, 2022, Kevin Ghassomian, Walter Calvert, and Theresa Clardy published “Interests Beware: Franchise Tax Board Conflates Federal Gain Recharacterization Rules for Hot Assets with State Sourcing Rules” in the Daily Journal. The following is an excerpt:
Nonresidents of California generally are not taxed by California on gain resulting from the sale of partnership interests. Under new guidance issued by the California Franchise Tax Board ("FTB"), nonresidents can now expect to be subject to California tax on a portion of such gain with respect to any partnership that has been filing a tax return with California.