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§ 13951.4. Listed Securities and Unlisted Securities Traded on Open Market.

18 CA ADC § 13951.4Barclays Official California Code of Regulations

Barclays California Code of Regulations
Title 18. Public Revenues
Division 2.5. State Controller (Refs & Annos)
Chapter 1. Inheritance Tax (Refs & Annos)
Article 6. Valuation
18 CCR § 13951.4
§ 13951.4. Listed Securities and Unlisted Securities Traded on Open Market.
Currentness
(a) Selling Prices.
In the case of stocks or bonds which have a market, on a stock exchange, in an over-the-counter market, or otherwise, the mean between the highest and lowest quoted selling prices on the date of the transferor's death will be deemed the market value per share or bond.
If there were no sales on the date of the transferor's death, but there were sales on dates within a reasonable period both before and after the date of death, the market value is determined:
(1) By taking the means between the highest and lowest quoted selling prices on the nearest date before and the nearest date after the date of death;
(2) By then prorating the difference between such mean prices to the date of death, considering only the respective numbers of trading days between the selling dates and the date of death in such proration; and
(3) By finally adding or subtracting, as the case may be, the prorated portion of the difference to or from the mean price on the nearest date before the date of death. For example, assume that the date of death is Friday, June 15, that sales of the stock nearest such date occurred two trading days before (Wednesday, June 13) and three trading days after (Wednesday, June 20), and that on these days the mean sale prices per share were $10 and $15, respectively. Dividing the difference between the mean sale prices ($5) by the number of trading days before and after the date of death (2 + 3) gives $1 per trading day. The portion of the difference attributable to the period from the nearest date before the date of death to the date of death (2 x $1) is $2. This amount added to the mean price on the nearest date before the date of death ($10) equals $12. Accordingly, $12 will be taken as representing the market value of a share of the stock on the date of death. If, instead, on June 13 and June 20 the mean sale prices per share were $15 and $10, respectively, $13 will be taken as representing the market value of a share of the stock on the date of death. As another example, assume that the transferor died on Sunday, October 7, and that Saturday and Sunday were not trading days. If sales of stock occurred one trading day before (Friday, October 5) at a mean sale price per share of $20 and one trading day after (Monday, October 8) at a mean sale price per share of $23, then the market value per share of stock as of the date of death is $21.50.
(b) Bid and Asked Prices.
If the provisions of subsection (a) of this regulation are inapplicable because actual sales are not available during a reasonable period beginning before and ending after the date of death, the market value may be determined by taking the mean between the bona fide bid and asked prices on the date of death, or if none:
(1) By taking the means between the bona fide bid and asked prices on the nearest date before and the nearest date after the date of death, if both such nearest dates are within a reasonable period of the date of death;
(2) By then prorating the difference between such mean prices to the date of death, considering only the respective numbers of trading days between such nearest dates and the date of death in such proration; and
(3) By finally adding or subtracting, as the case may be, the prorated portion of the difference to or from the mean price on the nearest date before the date of death.
(c) Incomplete Selling Prices or Bid and Asked Prices.
If the provisions of subdivisions (a) and (b) of this regulation are inapplicable because no actual sale prices or bona fide bid and asked prices are available on a date within a reasonable period before the date of death, but such prices are available on a date within a reasonable period after the date of death, or vice versa, then the mean between the highest and lowest of such sale prices or between such bid and asked prices may be taken as the market value.
(d) Securities Listed on More Than One Exchange.
If a stock or bond is listed on more than one exchange, the records of the exchange where the stock or bond is principally dealt in should be employed in ascertaining market value.
Note: Reference: Section 13951, Revenue and Taxation Code.
This database is current through 5/10/24 Register 2024, No. 19.
Cal. Admin. Code tit. 18, § 13951.4, 18 CA ADC § 13951.4
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