SENIOR ASSEMBLY PROPOSAL NO. 23

INTRODUCED BY SENIOR ASSEMBLY MEMBER LOPES

LEGISLATIVE COUNSEL'S DIGEST

AP 23: CAPITAL GAINS TAX REFORM

EXISTING LAW, 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 MEASURE WOULD MEMORIALIZE THE LEGISLATURE AND THE GOVERNOR TO ENACT LEGISLATION THAT WOULD PROVIDE THAT IF EITHER SPOUSE IS 60 YEARS OF AGE OR OLDER AT THE TIME OF THE DEATH OF ONE SPOUSE, THE FIVE HUNDRED THOUSAND DOLLAR ($500,000) CAPITAL GAIN INCOME EXCLUSION BE EXTENDED FOR TWO YEARS AFTER THE DEATH OF THE SPOUSE IN THE EVENT THE SURVIVING SPOUSE SELLS THE HOME WITHIN THIS TWO YEAR PERIOD.

VOTE: MAJORITY.

AP 23: RELATING TO TAXATION

WHEREAS, AFP-2 (2007, LOPES), “SURVIVING SPOUSE HOME SALE BENEFIT” WAS ONE OF THE TOP FOUR FEDERAL PROPOSALS ADOPTED DURING THE 2007 CALIFORNIA SENIOR LEGISLATURE CONVENTION; AND

WHEREAS, AFP-2 AUTHORIZED CERTAIN SURVIVING SPOUSES TO EXCLUDE FIVE HUNDRED THOUSAND DOLLARS ($500,000) OF HOME SALES CAPITAL GAIN; AND

WHEREAS, PUBLIC LAW 1100-142 “MORTGAGE FORGIVENESS DEBT RELIEF ACT OF 2007” AUTHORED BY CONGRESSMAN CHARLES B. RANGEL OF NEW YORK, TOOK EFFECT AFTER DECEMBER 20, 2007; AND

WHEREAS, THE SUBSTANCE OF AFP-2 WAS INCLUDED AS SECTION 7 IN PUBLIC LAW 110-142; AND

WHEREAS, CALIFORNIA DOES NOT CONFORM TO THE FEDERAL MORTGAGE RELIEF ACT THAT ALLOWS A SURVIVING SPOUSE TO EXCLUDE FIVE HUNDRED THOUSAND DOLLARS ($500,000) OF GAIN ON THE SALE OF A PERSONAL RESIDENCE WITHIN TWO YEARS OF A SPOUSE’S DEATH; AND WHEREAS,

THE CALIFORNIA MORTGAGE DEBT RELIEF LAW APPLIES ONLY TO THE YEARS OF 2007 AND 2008; NOW, THEREFORE, BE IT

RESOLVED, BY THE SENIOR ASSEMBLY AND THE SENIOR SENATE, JOINTLY, THAT THE SENIOR LEGISLATURE OF THE STATE OF CALIFORNIA AT ITS 2009 REGULAR SESSION, A MAJORITY OF THE MEMBERS VOTING THEREFOR, HEREBY PROPOSES THAT THE LEGISLATURE ADOPT LEGISLATION THAT WOULD PROVIDE THAT IF EITHER SPOUSE IS 60 YEARS OR OLDER AT THE TIME OF THE DEATH OF ONE SPOUSE, THE FIVE HUNDRED THOUSAND DOLLAR ($500,000) CAPITAL GAIN INCOME EXCLUSION BE EXTENDED FOR TWO YEARS AFTER THE DEATH OF THE SPOUSE IN THE EVENT THE SURVIVING SPOUSE SELLS THE HOME WITHIN THIS TWO YEAR PERIOD; AND BE IT FURTHER

RESOLVED, THAT THE SENIOR LEGISLATURE OF THE STATE OF CALIFORNIA RESPECTFULLY MEMORIALIZES THE LEGISLATURE AND THE GOVERNOR OF THE STATE OF CALIFORNIA TO ENACT APPROPRIATE LEGISLATION THAT WOULD ADDRESS THE CONCERNS SET FORTH IN THIS MEASURE; AND BE IT FURTHER

RESOLVED, THAT A COPY OF THIS MEASURE BE TRANSMITTED TO THE SPEAKER OF THE ASSEMBLY, THE PRESIDENT PRO TEMPORE OF THE SENATE, AND THE GOVERNOR OF THE STATE OF CALIFORNIA.

RN 09 16340

- 0 -