Laws, Regulations & Annotations
Property Taxes Law Guide – Revision 2016
Property Tax Annotations
200.0000 BASE YEAR VALUE TRANSFER
(b) BASE YEAR VALUE TRANSFER – GOVERNMENT ACQUISITION
200.0346 Ownership. A commercial strip center that was owned by a family trust was taken by eminent domain. A few months later, a limited liability company (LLC) that was owned 100 percent by the trust purchased a replacement property. A year later, the LLC transferred the replacement property to the trust.
Pursuant to Revenue and Taxation Code section 68 and Property Tax Rule 462.500(e), only the owner or owners of the property taken, whether one or more individuals, partnerships, corporations, other legal entities, or a combination thereof, can receive property tax relief. Since the family trust owned the original property, the trust must acquire the replacement property to obtain relief under section 68. Thus, the purchase of the property by the LLC will not qualify for relief. For property tax purposes, the separate identity of a legal entity is respected. Therefore, despite the fact that the trust owned 100 percent of the interests in the LLC, the acquisition of the replacement property by the LLC is not considered an acquisition by the trust. However, the subsequent transfer of the property from the LLC to the trust does qualify as an acquisition of property by a person displaced from property by eminent domain since the trust was displaced from the original property and also acquired the replacement property. C 7/27/2010.