1042 Election and California Taxes

[Guest svatty]

I have a question I was hoping someone might be able to help me with.

If I elect a Code section 1042 deferral of gain on a sale of employer securities to an ESOP does such an election also operate as a deferral of gain on the sale under California tax law, such that I will not be responsible for California state taxes until I sell such replacement securities?

Thanks!

[RLL]

The California tax law was conformed to include IRC Section 1042 tax-deferred treatment. But you may be required to file a separate election with the California income tax return.