A TEMPORARY AND TRANSITORY VISIT

WITH CALIFORNIA RESIDENCY

Charles P. Rettig

Hochman, Salkin, Rettig, Toscher, and Perez, P.C.

Issues regarding residency are relevant in many different legal arenas, including probate proceedings, voter registration, marital dissolutions, education, property tax determinations, and income taxes. Many individuals believe they are not California residents for income tax purposes on the basis that they spend significant amounts of time or maintain homes in other states or countries. Unfortunately, these individuals are mistaken and may be surprised.

The theory behind California residency for tax purposes is to define the class of individuals who should contribute to the support of California because they are physically present in California and/or receive substantial benefits and protections from its laws and government.⁽¹⁾ On the other hand, individuals present in California for a mere "temporary or transitory purpose" do not generally avail themselves of the benefits of residency and should not be considered residents for income tax purposes. However, the line of demarcation is not clear and tax collectors rarely meet an individual they don't want to call neighbor.

Although Franchise Tax Board Auditors do not hang around the airports with their hands out, they have been known to canvass Beverly Hills, Palm Springs, and Lake Tahoe in an effort to identify potential (involuntary) donors to the California treasury. Determining whether an individual is a resident of California for income tax purposes is significant because California residents are taxable on their world-wide income, including income from sources outside California. Non-residents of California, are only taxed on income from California source, while part-year residents are taxable on their world-wide income while a resident of California, and only on income from California sources while a non-resident.⁽²⁾

For tax purposes, there are various rules for determining the source, allocation and apportionment of gross income.⁽³⁾ However, the following items are clearly from sources within California:

(1) Income and gains from real or tangible personal property located in California;

(2) Income from a business, trade, or profession entirely conducted within California;

(3) Compensation for personal services performed in California;

(4) Income from intangible personal property having a business or taxable situs in California; and

(5) Rents or royalties for the use of, or for the privilege of using patents, copyrights, secret processes, formulas, goodwill, etc. in California with a business or taxable situs in California.⁽⁴⁾

California will not be satisfied by merely taxing California-source income if the individual has substantial non-California-source income, e.g., interest or dividends from their investments or income from out-of-state business activities -- if the individual is enjoying the benefits of California. Accordingly, individuals present in California for any significant period of time must be careful not to become a "resident" for income tax purposes.

Resident. In California, the term "resident" was originally defined for income tax purposes in the Personal Income Tax Act of 1935 (effective June 13, 1935),⁽⁵⁾ which was the enabling legislation enacted pursuant to Constitutional authority⁽⁶⁾ that first established the California Personal Income Tax. Section 2(k) of the Personal Income Tax Act of 1935 defined a "resident" as follows:

"The word 'resident' includes every natural person domiciled in the State of California and every other natural person who maintains a permanent place of abode within this State or spends in the aggregate more than six months of the taxable year within this State."

Article 2(k)-2 of the Regulations (the California Administrative Code) promulgated by the Franchise Tax Board set forth a definition of "domicile" under the Personal Income Tax Act of 1935, as follows:

"Domicile has been defined as the place where an individual has his true, fixed, permanent home and principal establishment and to which place he has, whenever he is absent, the intention of returning. It is the place in which a man has voluntarily fixed the habitation of himself and his family, not for a mere special or temporary purpose, but with the present intention of making a permanent home, until some unexpected event shall occur to induce him to adopt some other permanent home . . ."

As initially enacted, the statutory concept of residency encompassed every individual having a physical residence in California or every individual physically present in California for more than six months during the taxable year. The purpose of an individual's presence in California was generally irrelevant.

Based on an increasingly mobile society, the definition of a "resident" for California income tax purposes was substantially modified in 1937 as an attempt to ensure that all persons who are in California, for other than a temporary or transitory purpose, contribute to the support of the State.⁽⁷⁾ As amended in 1937, Section 2(k) of the Personal Income Tax Act defined the term "resident" as follows:

"Every natural person who is in the State of California for other than a temporary or transitory purpose is a resident and every natural person domiciled within this State is a resident, unless he is a resident within the meaning of that term as herein defined of some other state, territory, or country. . . . Every natural person who spends in the aggregate more than nine months of the taxable year within this State or maintains a permanent place of abode within this State shall be presumed to be a resident. The presumption may be overcome by satisfactory evidence that such person is in the State for a temporary or transitory purpose. . . ."

Presently, the statutory concept of a "resident" includes any individual who is: (a) in California for other than a "temporary or transitory purpose," or (b) domiciled in California, but physically located outside California for a "temporary or transitory purpose."⁽⁸⁾ The meaning of "temporary or transitory purpose" depends upon the facts and circumstances of each particular case, although it generally encompasses individuals physically present within the State for a particular purpose of a specified duration.⁽⁹⁾ A "part-year resident" is any individual who is a California resident for part of the year and a non-resident for part of the year. The term "non-resident" includes every individual other than a resident.⁽¹⁰⁾ A California resident continues to be a resident even though absent from the State on a temporary or transitory basis.⁽¹¹⁾

The term "domicile" has remained substantially unchanged -- it is the place where an individual has their true, fixed, permanent home and principal establishment and to which they have the intention of returning whenever they are physically present elsewhere.⁽¹²⁾ The concept of domicile requires both physical presence in a particular place and the intention to make that place one's home. At birth, a child is assigned a domicile of origin,⁽¹³⁾ and they retain that domicile until they acquire one elsewhere.⁽¹⁴⁾ An individual can only have one domicile. Once a domicile is acquired, it is retained until another is thereafter acquired. A new domicile is acquired by an actual change of residence accompanied by the intention to either remain permanently or for an indefinite period of time without any fixed or certain purpose to return to the former place of abode and in determining the individual's intention, their acts and declarations must be considered.⁽¹⁵⁾ An individual's actions must clearly demonstrate a current intention to abandon an old domicile and establish a new one.⁽¹⁶⁾

The distinction between "domicile" and "residence" is important. An individual may be a resident, although not domiciled in California, and, conversely, may be domiciled in California without being a resident.⁽¹⁷⁾ For example, a Nevada domiciliary accepting a job assignment in California expected to last for a long, indefinite duration will be considered a California resident. Similarly, a California domiciliary accepting a job assignment in Nevada expected to last for a long, indefinite duration will not be considered a California resident because he is out of the state for other than a "temporary transitory" purpose.

Issues regarding domicile are often difficult to resolve since they involve a determination of an individual's subjective intent. As a result, most income tax disputes center around issues involving residency -- whether the individual is present within or absent from California for a "temporary or transitory purpose." Many residency disputes involve individuals claiming to be residents of states that do not have an income tax -- Nevada, Florida, Texas, Alaska, etc. -- even though there are limited contacts with the other state.

Residency Presumptions. There is a rebuttable presumption that individuals physically present within California for less than six months during the taxable year (who are domiciled outside California and maintain a personal residence outside California) will not be considered California residents provided they do not engage in any activity or conduct within California other than that of a seasonable visitor, tourist or guest.⁽¹⁸⁾ Similarly, there is a rebuttable presumption that individuals physically present within California for more than nine months during the taxable year are California residents.⁽¹⁹⁾

These presumptions are not conclusive and may be overcome by evidence that physical presence in California, even if for more than nine months during the taxable year, was merely for a temporary or transitory purpose. "The language of the statute establishes that the length of time a person is in California does not . . . compel a determination that he has acquired residence [in California]."⁽²⁰⁾ Clearly a person who stays for more than six months of the year, but less than nine months "may be considered as being in the State for a temporary or transitory purpose."⁽²¹⁾ Further, an individual may be deemed a seasonal visitor, tourist or guest even though they own or maintain a physical residence in California, join local social clubs, or have a bank account in California for the purpose of paying personal expenses.⁽²²⁾

Time spent in California is only one factor to be considered as an indication of the purpose of the visit.⁽²³⁾ For tax purposes, a residency determination depends upon an overall determination of the individual's "closest connections" during the taxable year.⁽²⁴⁾ The state with which an individual has the closest connections during the taxable year is typically their state of residence.⁽²⁵⁾ The contacts/connections which a taxpayer maintains in California and other states are important objective indications of whether presence in or absence from California is a for a "temporary or transitory purpose." Such connections are important both as a measure of the benefits and protections which the taxpayer received from the laws and government of California, and also as an objective indication of whether the taxpayer entered or left the State for temporary or transitory purposes.⁽²⁶⁾ It must be determined whether connections with a state were maintained in readiness for the taxpayer's return.⁽²⁷⁾ However, retention of certain contacts such as bank accounts, driver's licenses, professionals, etc. may only be a reflection of the taxpayer's past and may not be inconsistent with an absence for other than a temporary or transitory purpose.⁽²⁸⁾

If an individual is simply passing through California on their way to another state or country, or is in California for a brief rest or vacation, or to complete a particular transaction, or to perform a particular contract, or to fulfill a particular engagement, which will require their presence in the State for a brief period of limited duration, the individual is deemed to be present in California for a "temporary or transitory purpose" and will not be deemed a resident by virtue of their physical presence within the State of California.⁽²⁹⁾ However, individuals present in California for an indefinite duration, such as to improve their health, or for a business purpose requiring a long period to accomplish, or employed in a position that may last permanently or indefinitely, or individuals arriving in California with no definite intention of departing shortly thereafter, are deemed present in California for other than a temporary or transitory purpose, and will be deemed residents taxable upon their world-wide income, even though they may retain their domicile in some other state or country.⁽³⁰⁾

Limited Safe Harbor. Historically, employment related absences from California for as long as 12, 15, 19, or 22 months have been considered "temporary" absences of relatively short duration.⁽³¹⁾ Taxpayers have even been deemed California residents during overseas employment that lasted as long as three years.⁽³²⁾ Conversely, an individual was determined to be "temporarily" in California even though present for more than nine months during the year since they resided in a hotel on a weekly basis and their departure was delayed because of illness and a studio strike.⁽³³⁾

Where a California domiciliary is employed outside the State, they have generally been considered absent for other than a temporary or transitory purpose if the job position is expected to last for a long, permanent, or indefinite period of substantial duration.⁽³⁴⁾ The fact that a foreign assignment ended sooner than expected did not require a conclusion that the assignment was for a temporary or transitory purpose.⁽³⁵⁾ A permanent departure is not required. However, the individual had to demonstrate that they were absent for other than a "temporary or transitory purpose."⁽³⁶⁾

A degree of certainty was established by legislation enacted in 1994 providing that California domiciliaries absent from California for an uninterrupted period of at least 18 consecutive months (546 consecutive days) under an employment-related contract would be considered outside the State for a purpose that is not "temporary or transitory" (thereby resulting in the individual being a non-resident).⁽³⁷⁾ However, this "safe harbor" specifically excludes individuals (and their spouses) domiciled in the State of California required to relocate outside California as a result of obtaining certain federal government elective or appointed positions.⁽³⁸⁾ Under the "safe harbor," the individual is allowed to return to California for no more than 45 days during any taxable year. However, the "safe harbor" exception does not apply if the individual has income from intangibles (stocks, bonds, notes, etc.) in excess of $200,000 during the taxable year or if the principal reason for the absence from California is to avoid personal income tax.⁽³⁹⁾

Administrative Review. Since 1935, issues relating to residency and domicile have been extensively contested by taxpayers. The first appeal to the State Board of Equalization was heard in 1942 and pertained to tax year 1935.⁽⁴⁰⁾ Determinations by the Franchise Tax Board regarding a taxpayer's income tax liability are presumptively correct,⁽⁴¹⁾ and this presumption of correctness also attaches to a Franchise Tax Board determination of residency status.⁽⁴²⁾ As such, a taxpayer has the burden of proving the erroneous nature of the Franchise Tax Board's residency determination.⁽⁴³⁾ With respect to domicile, the burden of proof is on the party asserting a change of domicile.⁽⁴⁴⁾ The presumption of correctness is rebuttable and supports a finding only in the absence of sufficient evidence to the contrary.⁽⁴⁵⁾ Once evidence of residency that would support a contrary finding has been submitted, the presumption of correctness disappears.⁽⁴⁶⁾ The burden of proof will not generally be satisfied based on unsupported, arguably "self-serving," assertions.⁽⁴⁷⁾ Credible evidence substantiating the contentions must be presented.⁽⁴⁸⁾

When the issue of residency arises, the Franchise Tax Board will thoroughly review and evaluate what it perceives to be the relevant contacts with the State of California and other states. There will be a special emphasis on California contacts. It is not sufficient to merely balance contacts with the State of California and to aggregate contacts with states other than California. It must be demonstrated that an individual is a "resident" of some other state or country. It is not generally sufficient to demonstrate that the individual was not physically present in California for a specified period of time. In fact, minor contacts with California may become more significant if the individual is unable to demonstrate that there are more significant contacts with any other particular state or country.

The most significant contacts tend to include actual physical presence of the taxpayer during the taxable year, the location of the family home, the location of various business interests, and the location of the individual's family (although spouses need not have the same residency status). Even though an individual may not be a California resident, their spouse and minor children may be residents, if they are present in California for other than a temporary or transitory purpose. The Franchise Tax Board will review and determine the employment status of the individual, the location and activity in California bank and brokerage accounts, whether the individual's minor children attend school in California, whether older children are attending school in California universities on the basis of being deemed residents of the State of California, voter's registration certificates, whether the individual files resident or non-resident tax returns in another state or country, whether the individual claimed the California homeowner's property tax exemption or renter's credit with respect to a California residence, the location of medical, legal, and business professionals engaged on behalf of the individual, registration of vehicles, planes, or boats belonging to the individual, the state where the individual's driver's license is issued, the state where the individual's professional and business licenses are issued, the state where the individual belongs to social, athletic, or religious organizations, membership in labor unions within the state, a listing in a telephone directory within the state, the location of the individual's cemetery plot, and other relevant contacts. No single contact is determinative.

In any residency determination, it is particularly relevant to determine whether the individual substantially severed their contacts upon departure from a state and took steps to establish a significant connection with their new state of residency. It should be anticipated that the Franchise Tax Board will attempt to determine whether an individual arguably departing California maintained their California contacts with a view toward ultimately returning to the State -- a finding likely to lead to an administrative determination that the individual remained a California domiciliary, even though physically present outside the State of California for a significant period of time. However, the mere fact that an individual owns a home, maintains a bank account, or is a member in social clubs located in California should not automatically result in a determination of California residency.⁽⁴⁹⁾ All relevant contacts will be evaluated to determine the individual's actual domicile and residency status. Unfortunately, there are no clear guidelines for this determination.

Frequently, administrative determinations that a taxpayer is domiciled in California lead to the conclusion that their absence from the State is for a temporary or transitory purpose. Similarly, determinations that an individual is domiciled outside California frequently involve a conclusion that the individual's presence in the State of California is for other than a temporary or transitory purpose. Each conclusion leads to a determination that the individual is subject to taxation by the State of California on their world-wide income. These conclusions are often based on the fact that the absent party maintained contacts with California while away and that the party located in California arrived in California for an indefinite period of time.

To avoid a potentially adverse determination, individuals departing California should sever all connections with the State, physically leave the State, and clearly set forth their subjective intent to never return. Although it may be unreasonable to expect California domiciliaries to sever all of their California connections, failure to relinquish significant contacts with the State of California will increase the risk of being taxed as a resident during the period of their absence from California.

If an audit arises, it should be anticipated that the Franchise Tax Board will contact the individual's neighbors and business associates in an effort to determine the individual's physical presence within the State of California. Although mere time spent within the State of California is not determinative, the amount of time within California significantly influences the administrative determination of the individual's residency status. A significant amount of information regarding physical presence is often derived from interviews of neighbors and business associates, credit card receipts and canceled checks. The use of credit cards or checks within the State of California typically places an individual at a particular location at a particular point of time.

If an individual claims to have a residence or business located outside the State of California, it should be anticipated that the Franchise Tax Board will actually visit the out-of-state locations and contact neighbors and business associates in that location. There will also be a search of courthouse records for information or statements as to an individual's residency status set forth in any proceedings involving a marital dissolution, probate, or other litigation.

If the issue concerning a taxpayer's residency status is unclear, to avoid possible penalties, filing of a non-resident return reporting California-source income should be considered even though the taxpayer believes they are not a California resident.⁽⁵⁰⁾ Filing of a non-resident return will commence the applicable statute of limitations on assessment of a tax deficiency. If a return is not filed, the individual will remain exposed to the residency issue forever.⁽⁵¹⁾ The return might be accompanied by a statement setting forth the reasons why the taxpayer is not a resident and any evidence in support of the taxpayer's assertion of non-residency.

Residency disputes are often not administratively resolved for an extended period of time. Basic residency audits often take at least a year to conclude while information is being gathered and coordinated. If a dispute remains, the individual must then timely protest the Notice of Proposed Assessment and will request an informal hearing within the Franchise Tax Board. If the issue remains unresolved, the individual must timely file an appeal to the State Board of Equalization. Sometimes the administrative processes can be curtailed by submission of a settlement proposal to the Franchise Tax Board Settlement Bureau on the basis of the relative "hazards of litigation" involved.⁽⁵²⁾

Following the exhaustion of the foregoing administrative processes without a meaningful resolution, an individual may timely commence an action in the Superior Court of any county where the California Attorney General maintains an office -- Sacramento, Los Angeles, or San Francisco -- without first being required to satisfy the disputed liability.⁽⁵³⁾ No collection action may be taken while the suit is pending. This is a statutory exception to the general rule in other civil tax disputes, where the taxpayer must pay the tax liability at the conclusion of the administrative processes before commencing Superior Court litigation.

It is not unusual for the Franchise Tax Board to consider a jeopardy assessment if it is able to determine that an individual is removing assets from California in the face of a potential residency determination. The Franchise Tax Board is authorized to issue a jeopardy assessment and seek immediate collection of the amount in dispute if it determines that the assessment and collection of the tax may be jeopardized by delay.⁽⁵⁴⁾ A finding of jeopardy is presumptively correct in subsequent proceedings. If a jeopardy assessment is involved in a residency dispute, a tax practitioner should consider the motivations behind the jeopardy (was it improperly asserted to circumvent the taxpayer's ability to contest the residency determination without having to satisfy the tax liability?).

The determination of an individual's residency status (if domiciled outside California) or domicile (if physically present outside California) depends upon application of the phrase "temporary or transitory purpose". Unfortunately, as with other determinations based upon a factual analysis (independent contractor/employee, etc.), this phrase has often been interpreted in an inconsistent and arbitrary manner. Whether a taxpayer's purpose in entering or leaving California is temporary or transitory in character, is a question of fact to be determined by examining all of the circumstances of each particular case.⁽⁵⁵⁾ In situations where the taxpayer has significant contacts with more than one state, the state with the closest connections during the taxable year will be considered the state of their residence.⁽⁵⁶⁾ Individuals maintaining a significant personal and business presence in several states, including California, will remain exposed to a potentially arbitrary residency determination.

Tax practitioners cannot provide total comfort to their departing clients unless substantially every contact with the State of California has been relinquished. Similarly, snowbirds migrating to a warmer California climate must limit their time and California contacts. Merely balancing the relative contacts or the amount of time spent outside the State of California will not be determinative.⁽⁵⁷⁾ If an individual accepts out-of-state employment of a limited duration, the Franchise Tax Board will likely assert that the individual retained their status as a California domiciliary and was merely absent from the State on a temporary or transitory basis. Individuals intending to depart from California should do so under circumstances establishing that their departure is for a lengthy or indefinite duration. Individuals retaining any contacts or having any presence in California will be exposed to a potentially arbitrary residency determination. Unfortunately, after more than 60 years experience, residency determinations still remain unpredictable. Howdy neighbor.

1. Regulation § 17014(a); Whittell v. Franchise Tax Board, 231 Cal. App. 2d 278 (1964).

2. Revenue & Taxation Code §§ 17041, 17056, 17301-17303, and 17310; Cal. Admin. Code, Title 18, Regulations ("Regulations") §§ 17014 and 17951-1, et seq.

3. Revenue & Taxation Code § 17951, et seq.

4. Regulation §§ 17951 and 17952.

5. 1935 Cal. Stat. Ch. 329, § 1, at 329.

6. Cal. Const. art. XVIII, § 26(a). The Personal Income Tax Law is administered by the Franchise Tax Board which has broad powers to issue non-retroactive regulations prescribing the application of the Income Tax Law and is authorized to examine personal income tax returns and to determine the amount of tax due. The Franchise Tax Board is composed of the State Controller, the Director of the Department of Finance, and the Chairman of the State Board of Equalization. Cal. Gov't Code § 15700, et seq.

7. Traynor and Keesling, The Scope and Nature of the California Income Tax, 29 Cal. L. Rev. 706, 719.

8. Revenue & Taxation Code § 17014(a); Regulation § 17014.

9. Regulation § 17014(b).

10. Revenue & Taxation Code § 17015; Regulation § 17014.

11. Revenue & Taxation Code § 17014(c); Regulation § 17014(a).

12. Regulation § 17014(c).

13. Gates v. Commissioner, 199 F.2d 291, 294 (10th Cir. 1952).

14. In re Marriage of Leff, 25 Cal. App. 3d 630, 102 Cal. Rptr. 195 (1972).

15. Regulation § 17014(c); Estate of Phillips, 269 Cal. App. 2d 656, 659; 75 Cal. Rptr. 301 (1969).

16. Chapman v. Superior Court, 162 Cal. App. 2d 421, 426-427; 328 P.2d 23 (1958).

17. Appeal of Harrison, Cal. St. Bd. of Equal., 6/25/95.

18. Regulation § 17014(b).

19. Revenue & Taxation Code § 17016; Regulation § 17014(b).

20. Klemp v. Franchise Tax Board, 45 Cal. App. 3d 870, 119 Cal. Rptr. 821 (1975),

21. Klemp, supra.

22. Whittell v. Franchise Tax Board, 231 Cal. App. 2d 278, 41 Cal. Rptr. 673 (1964); Klemp, supra; Corbett v. Franchise Tax Board, _____________________________________.

23. Klemp, supra.

24. Regulation § 17014(b).

25. Appeal of Hardman, Cal. St. Bd. of Equal., 8/19/75.

26. Appeal of Zupanovich, Cal. St. Bd. of Equal., 1/6/76; Appeal of Broadhurst, Cal. St. Bd. of Equal., 4/4/76.

27. Appeal of Hardman, Cal. St. Bd. of Equal., 8/19/75.

28. Appeal of Hardman, supra.

29. Regulation § 17014(b).

30. Regulation § 17014(b).

31. Appeal of Tarring, 4 SBE 51 (11/18/87); Appeal of Hauber, Cal. St. Bd. of Equal., 11/6/85; Appeal of Harding, Cal. St. Bd. of Equal., 2/4/86; Appeal of Boehme, Cal. St. Bd. of Equal., 11/6/85.

32. Appeal of Huran, Cal. St. Bd. of Equal., 1/8/68; Appeal of Zupanovich, Cal. St. Bd. of Equal., 1/6/76.

33. Appeal of Woolley, Cal. St. Bd. of Equal., 7/19/51.

34. Appeal of Zupanovich, supra.

35. Appeal of Egeberg, Cal. St. Bd. of Equal., 7/30/85.

36. Appeal of Fox, Cal. St. Bd. of Equal., 4/9/86.

37. Revenue & Taxation Code § 17014(d).

38. Revenue & Taxation Code § 17014(b).

39. Revenue & Taxation Code § 17014(d).

40. Appeal of W.S. Charnley, Cal. St. Bd. of Equal., 12/2/42.

41. Todd v. McColgan, 89 Cal. App. 2d 509 (1949); Appeal of Morgan, Cal. St. Bd. of Equal., 7/30/85.

42. Appeal of Misskelley, Cal. St. Bd. of Equal., 5/8/84.

43. Appeal of Robert F. and Helen R. Adickes, 90-SBE-012, 11/17/90; Appeal of Robert J. Addington, Jr., Cal. St. Bd. of Equal., 1/5/82; Todd v. McColgan, 89 Cal. App. 2d 509; 201 P.2d 414 (1949).

44. Sheeham v. Scott, 145 Cal. 684, 79 P.350 (1905); Appeal of Terance and Brenda Harrison, Cal. St. Bd. of Equal., 6/25/85.

45. Appeal of Fox, Cal. St. Bd. of Equal., 4/9/86; Rockwell v. Commonwealth, 512 F.2d 882 (9th Cir. 1975).

46. Appeal of Misskelley, Cal. St. Bd of Equal., 5/8/84; Appeal of Webber, Cal. St. Bd. of Equal., 10/6/76.

47. Appeal of Gum, Cal. St. Bd. of Equal., 3/31/82.

48. Appeal of Seltzer, Cal. St. Bd. of Equal., 11/18/80.

49. Regulation § 17014(b).

50. Regulation § 17014(d)(2).

51. Revenue & Taxation Code § 19057.

52. Revenue & Taxation Code § 19442.

53. Revenue & Taxation Code § 19081; Cal. Code of Civ. Proc. § 1060.5.

54. Revenue & Taxation Code § 19081.

55. Appeal of Gabrik, Cal. St. Bd. of Equal., 2/4/86.

56. Regulation § 17014(b).

57. Appeal of Thomas, Cal. St. Bd. of Equal., 4/5/83; Appeal of Loebner, Cal. St. Bd. of Equal., 2/28/84; Appeal of Stefani, Cal. St. Bd. of Equal., 1984.