The topic for this installment is: California combination without unity of ownership? Under California law (Cal. Rev. & Tax. Cd. § 25105), entities must have unity of ownership, as measured by a bright-line test (ownership of more than 50 percent of voting stock), before they can be combined. Despite this prerequisite to combination, the Franchise Tax Board (FTB) is advancing an argument that under another statute (Cal. Rev. & Tax. Cd. § 25102) the FTB can force combination between entities that do not meet the bright-line test for unity of ownership and, indeed, may not have common ownership at all. This webinar will discuss the FTB’s evolving position in this regard and explore strategies for dealing with this issue.

• Background and history of the relevant statutes
• Analysis of the FTB’s position
• Strategies for dealing with audits and controversies