California Revenue and Taxation Code Section 17131.2

CA Rev & Tax Code § 17131.2 (2017)  

(a) Gross income does not include any excludable settlement payments received by an eligible individual (or the individual’s heirs or estate) and any excludable interest.

(b) For purposes of this section:

(1) The basis of any property received by an eligible individual (or the individual’s heirs or estate) as part of an excludable settlement payment shall be the fair market value of that property as of the time of the receipt.

(2) “Eligible individual” means a person who was persecuted on the basis of race or religion by the regime that was in control of the Ottoman Turkish Empire from 1915 through 1923.

(3) “Excludable settlement payment” means any payment or distribution to an individual (or the individual’s heirs or estate) that is any of the following:

(A) Is payable by reason of the individual’s status as an eligible individual, including any amount payable by any foreign or domestic entity or a fund established by any entity, any amount payable as a result of a final resolution of a legal action, and any amount payable under a law providing for payments or restitution of property.

(B) Constitutes compensation to the individual from 1915 until 1923, by reason of the individual’s status as an eligible individual, including any proceeds of insurance under policies issued on eligible individuals immediately before 1915 and during the time period from 1915 until 1923.

(C) Consists of interest that is payable as part of any payment or distribution described in subparagraph (A) or (B).

(4) “Excludable interest” means any interest earned by any of the following:

(A) A fund to benefit eligible individuals or their heirs created by an international commission or an international organization.

(B) A fund subject to the administration of the United States courts created to provide excludable settlement payments to eligible individuals (or eligible individuals’ heirs or estates).

(c) (1) This section applies to any amount received on or after January 1, 2005.

(2) This section may not be construed to create any inference with respect to the proper tax treatment of any amount received before January 1, 2005.

(Added by Stats. 2004, Ch. 402, Sec. 2. Effective January 1, 2005.)

Last modified: October 25, 2018