Pass-through entities include partnerships, S corporations and limited liability companies that elect to be treated as partnerships.

Always a Non-resident - The taxpayer’s basis in a pass-through entity for California purposes is equal to their contributions to capital, adjusted by California sourced items only.

Change of Residency to California – A taxpayer’s basis in a pass-through entity needs to be restated under California law as if they had been a California resident for all prior years. Basis is adjusted for their share of flow-through items, regardless of source, during their period of non residency.

Change of Residency from California - If the taxpayer becomes a non-resident of California, their basis in a passthrough entity needs to be restated as if they had been a non-resident of California for all prior years.