Proposition 13 (California Property Tax)
California's 1978 constitutional amendment capping property tax at 1% of assessed value with annual increases limited to 2%. Properties owned for decades may be assessed at a fraction of fair market value, creating enormous embedded tax savings. The catch: 'change in ownership' triggers reassessment to current market value. For businesses, transferring real estate to a new entity, selling a corporation that owns real estate, or transferring partnership interests above 50% can all trigger reassessment — potentially increasing property taxes 5-20x overnight.
Where This Matters
Everything business owners need to know about selling, exiting, or transitioning out of their company — from valuation to tax strategy to deal structure.
Passing a business to the next generation — family dynamics, valuation for transfer, gift/estate tax strategy, and management transition.
Legal strategies to reduce business and personal tax burden — entity optimization, deferred compensation, retirement planning, California-specific tactics.
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