2026 Billionaire Tax Act — Case Projection Tool

Amounts accept shorthand: 1.5b = $1.5 billion, 300m = $300 million, 50k = $50,000. A married couple is treated as one taxpayer (§ 50301(a)) — enter combined worldwide figures for both spouses.

Threshold mechanics: status as a taxable person is fixed on the tax obligation date (Jan 1, 2026); the amount taxed is net worth on the valuation date (Dec 31, 2026). Tax is 5% of entire net worth (not just the excess over $1B), with a phase-in between $1.0B and $1.1B.

1 · Taxpayer status §§ 50301, 50308(a)

California resident on January 1, 2026?Residency per R&TC §§ 17014 / 17015.5. Non-residents on that date are outside the tax.

2 · Publicly traded assets § 50303(c)(1)

Total market value on Dec 31, 2026 includedStock, bonds, ETFs, crypto on exchanges — anything with a readily ascertainable market price. Also determines ODA eligibility.

3 · Private business interests § 50303(c)(3)

Default valuation is the statutory formula: (GAAP book value + 7.5 × average book profits over 3 years, floored at zero) × ownership %. Either side may substitute a certified appraisal on clear-and-convincing evidence (§ 50303(c)(3)(F)). A funding round within 2 years of Dec 31, 2026 sets a valuation floor (§ 50303(c)(10)).

4 · Trusts & attributed assets § 50303(c)(6), (11), (12)

Assets in grantor trusts 100%Grantor-trust assets are fully included in the grantor's net worth.

Transfers to non-grantor trusts during 2026 100%Fully counted back to the transferor.

Transfers to non-grantor trusts during 2025 75%Counted at 75% of value — the look-back rule.

Below-market gifts/transfers >$1M after Oct 15, 2025 clawed backBelow-FMV transfers (outside trusts) over $1M are added back to the transferor (§ 50303(c)(11)).

Dependents' total assets excess >$50kA dependent's aggregate assets above $50,000 are deemed yours (§ 50303(c)(12)).

5 · Retirement & other assets § 50303(c)(7), (9)

Roth IRA / Roth-type accounts, total value excess >$10MExempt up to $10M aggregate; only the excess counts.

Qualified pensions / traditional IRAs exemptFully exempt from tax and reporting (§ 50303(c)(7)(A)). Entered for completeness only — never counted.

Art, collectibles, non-public instruments, IP, vehicles less $5MCatch-all category; the first $5M combined is excluded (§ 50303(c)(9)). Insured value is a floor (§ 50303(c)(10)).

Directly-held real property (incl. via revocable trust) excludedExcluded from net worth entirely (§ 50303(c)(4)) — a deliberate Prop 13 carve-out. Real estate held through entities is captured via the entity's book value instead.

Tangible personal property outside CA ≥270 days in 2026 excludedExcluded unless relocated temporarily with a substantial tax-avoidance purpose (§ 50303(c)(5)).

6 · Debts & liabilities § 50302

Recourse debt (fully personally liable) full deductionCounts in full (§ 50302(a)).

Non-recourse debt cappedDeductible only up to the value of collateral that is itself included in your net worth (§ 50302(b)).

Value of collateral securing that non-recourse debt (and included in net worth above)Used to cap the non-recourse deduction.

Related-party, contingent, or non-arm's-length debt disregardedNo reduction for debts owed to related persons, contingent debts, non-arm's-length debts, or guarantees (§ 50302(d)–(e)).

7 · Apportionment & credits §§ 50306, 50307

Apportionment to CaliforniaDefault is 100% for any resident on Jan 1, 2026, regardless of residency history. Alternative apportionment requires clear-and-convincing proof the wealth was neither accumulated nor sustained in CA — generally floored at 25%.

Net-wealth tax paid to another state in 2026Creditable pro rata by days resident there (§ 50307(a)). Real-property taxes never qualify.

Days resident in that other state during 2026Credit = tax paid × days ÷ 365.

Projected 2026 tax

Payment options § 50301(c)

Optional Deferral Account check § 50304

Compliance notes

Everyone files. Every CA resident filing a 2026 return must either declare net assets ≤ $1B or file the billionaire-tax forms with appraisals (§ 50301(d)).

Appraisals. Each non-public asset (or group of interchangeable assets) worth over $1M in the catch-all category needs a certified appraisal (§ 50303(c)(9)).

Penalties. 20% of the understatement if it exceeds the greater of $1M or 20% of reported tax; 40% for gross understatements (greater of $10M or 40%) (§ 50312).

Audit window. Ten years for the 2026 year, versus the usual four (§ 50309(b)(3)). A six-month filing extension is automatic for 2026 (§ 50312(i)).