Laws, Regulations & Annotations
Business Taxes Law Guide – Revision 2013
Sales and Use Tax Annotations
395.0000 OCCASIONAL SALES—SALE OF A BUSINESS—BUSINESS REORGANIZATION—Regulation 1595
(d) PART OWNERSHIP, SALE OF
395.0840 Undivided Interest. When A, an individual proprietor, sold an undivided one-half interest in his machinery and equipment to B for $20,000 cash and, on the same day and pursuant to the same agreement, A and B transferred their interests to a newly formed corporation for two promissory notes of $20,000 each and became equal owners of the capital stock, A is liable for tax on $40,000. The second transfer is not an exempt occasional sale as defined in section 6006.5 because, under the circumstances, B was a mere conduit of title. 7/17/64.