California Tax Appeals Office Partially Reverses FTB on Taxpayer’s Roth IRA Distribution

The California Office of Tax Appeals (OTA) issued a decision partially reversing an action by the Franchise Tax Board (FTB) proposing additional taxes and applicable interest against the taxpayer for the 2018 taxable year. The dispute centered around unreported income distributed to the taxpayer by two different companies. The taxpayer argued that the distribution from one of the companies was a nontaxable distribution from a Roth IRA account. However, FTB treated it as taxable income based on a federal determination. The OTA found that the distribution was likely a qualified, nontaxable distribution from a Roth IRA to the taxpayer as ...