FTB Releases Guidance on Reporting DISA Transactions


The California Franchise Tax Board (FTB) has issued FTB Notice 2009-01 (Feb. 20, 2009) (Notice) to “remind” taxpayers of their annual disclosure requirement regarding deferred intercompany stock account (DISA) transactions and the consequences of a failure to disclose. California Code of Regulations (CCR), title 18, section 25106.5-1 et seq., applicable for tax years beginning on or after January 1, 2001, requires a member of a California combined reporting group that is a distributee corporation to use a DISA mechanism to report and track non-dividend distributions in excess of its adjusted basis in the stock of the distributing subsidiary corporation, which is a member of the same combined reporting group, until the intercompany item is required to be taken into account.

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