CA - American Jobs Act of 2004 Conformity

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California American Jobs Act of 2004

California does not conform to the American Jobs Act of 2004 that was signed into law on October 22, 2004. This legislation provides for various business tax and agricultural tax incentives, deduction of state and local general sales taxes and various other provisions. This includes the following provisions:

  • The exclusion of gain on sale of a principal residence does not apply if the principal residence was originally acquired in a like-kind exchange in which any gain was not recognized within the prior five years.
  • A tax deduction for charitable contributions of patents and similar intellectual properties is allowed on form 8283.
  • A taxpayer can expense up to $5,000 of business start-up costs under IRC §195(b) up to $5,000 of organizational costs under IRC §§248(a) and 709(b).
  • Individuals may elect to deduct state sales and use taxes rather than state and local income taxes on their federal returns on Schedule A, line 5b.

California allows the exclusion of the gain from the sale of a principal residence if the residence was acquired in a like-kind exchange. The gain is subtracted from California taxable income on Schedule CA or CA-NR, Line 13. California requires that any deduction recognized on the federal return for charitable contributions of patents be subtracted from CA itemized deductions on Schedule CA or CA-NR, Line 40. Start-up and organizational costs allowed on the federal return are added back to business income on Schedule CA or CA-NR. The deduction for state sales and use taxes allowed on Schedule A, Line 5b is added back to the CA itemized deductions on Schedule CA or CA-NR, Line 38.

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