Change of Ownership Statement must be filed with BOE

A taxpayer was liable for over $1.6 million in escaped property tax assessments for failure to timely file a legal entity Change of Ownership Statement with the State Board of Equalization (BOE).1 A California court of appeal held that under California law, a taxpayer’s failure to comply with this BOE filing requirement means a taxpayer may be on the hook for unlimited retroactive property tax assessments.

In Prang, the taxpayer merged with another entity in 2006 and recorded a Certificate of Merger with the Los Angeles County Recorder’s Office at that time. The certificate was silent as to whether either entity had held real property in the county. The taxpayer did not file a Change of Ownership Statement with the BOE until 2013, and in 2015 the Los Angeles County Assessor assessed escape assessments against the taxpayer back to the 2007–2008 fiscal year.

The court held that even if the taxpayer had filed a proper statement with the county in 2006 and indicated that one of the entities held property in the county, the failure of a legal entity to file a Change of Ownership Statement with the BOE itself opens up the statute of limitations period indefinitely.
What this means

The decision in Prang is extremely broad. Failure to file a Change of Ownership Statement with the BOE within 90 days opens up the possibility for assessors to assess escape assessments indefinitely. It does not appear that the holding is limited to assessments that are attributable to the change of ownership. It also means that filing the following statements will not limit this open-ended statute of limitations:

  • Filing a statement with the county assessor or recorder’s office; or
  • Checking a box on an FTB tax return or information return.

The court’s ruling is very clear: File a property statement with the BOE, or else.

Form BOE-100-B
The BOE has provided Form BOE-100-B, Statement of Change in Control and Ownership of Legal Entities, for taxpayers to use to report a legal entity’s change of ownership or change of control. However, the court ruled that this specific form does not have to be filed, as long as the requisite information outlined in R&TC §§480.1 and/or 480.2 is provided in writing to the BOE.
What is a reportable change of ownership/control?

A change in ownership of the real property owned by the legal entity that must be reported to the BOE occurs upon either of these two transfer events:

If a person or legal entity acquires more than 50% of the ownership interest in a legal entity, there is a change in ownership of the real property owned by the acquired legal entity. This type of transfer is referred to as a change in control; and
A transfer of ownership interest in a legal entity that results in a cumulative transfer of more than 50% of original co-owner interests in that entity is a change in ownership of the real property owned by the entity. This type of transfer is referred to as a change in ownership.

Note: A transfer of interest in real property to and by a legal entity does not have to be reported to the BOE, only to the local county assessor’s office. This involves a transfer of an interest in real property between a corporation, partnership, LLC, or other entity and a shareholder, partner, or any other person (including another entity) that results in a change in ownership of the real property transferred.2

  1. Prang v. Los Angeles County Assessment Appeals Board No. 2 (August 27, 2020) Cal. Ct. of App., Second App. Dist., Case No. B301194
  2. BOE’s Legal Entity Ownership Program (LEOP) Frequently Asked Questions (FAQs) available at:

About the Author
D. Steven Yahnian has been a member of the California Bar and a practicing Attorney since 1980. He has also been a California CPA since 1984. Mr. Yahnian also holds the CFP® designation.

Mr. Yahnian practices in the following areas of law through YAHNIAN LAW CORPORATION:

  • Tax Planning, Tax Debt Resolution and Tax Litigation
  • Business & Corporate Law & Planning
  • Estate Planning & Administration
  • Real Property Law & Planning
  • Asset Protection Planning

As a CPA/CFP, Mr. Yahnian also has a separate accounting and tax return preparation practice called DSA ACCOUNTING.

Mr. Yahnian is a California State Bar Certified Specialist in the following
• Taxation Law and
• Estate Planning, Trust & Probate Law.

Mr. Yahnian received a B.S. degree in Accounting from USC, a J.D. from Loyola University of Los Angeles School of Law and an LL.M. in Taxation from New York University Law School. He also has a Certificate in Taxation from UCLA (with distinction).

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