California water's edge election

Technical topics regarding tax preparation.
#1
Keyad22  
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1209
Joined:
13-Jun-2016 9:51am
Location:
Bay Area, California
Hi Pros,

How to define the term "foreign corporation" under Ca code section § 25113. Water's-Edge Election?

A foreign corporation means a corporation incorporated outside the United States, such as Japan, UK.

Or

A foreign corporation means a corporation incorporated outside California, such as DE, NV, WA.

Which is correct? If a DE corporation filing as foreign company doing business in CA, with location, expense, employees are all sourced or located in CA, should it file 100W and make a WE election?
 

#2
Nilodop  
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18761
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Location:
Pennsylvania
It means formed in any jurisdiction outside of California, so both.
 

#3
Keyad22  
Posts:
1209
Joined:
13-Jun-2016 9:51am
Location:
Bay Area, California
Here is a start-up company. It incorporated in DE, operates partly in CA and partly in MA, generated no income and won't have any income in several years in the future, only has payroll expense,rental expense, machine and other supplies, etc. Should the company file a water's edge election?

Another start-up. It incorporated in DE, operates only in CA, generated no income and won't have any income in several years in the future, only has payroll expense,rental expense, machine and other supplies, etc. Should the company file a water's edge election?
 


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