(a) For purposes of this part, âqualified entityâ means an entity that meets both of the following requirements for the taxable year: (1) The entity is taxed as a partnership or âSâ corporation. (2) The entityâs partners, shareholders, or members in that taxable year are exclusively corporations, as defined in Section 23038, or taxpayers as defined in Section 17004. (b) âQualified entityâ shall not include any of the following: (1) Publicly traded partnerships, as defined in Section 7704 of the Internal Revenue Code, as it read on January 1, 2021, as modified by Section 17008.5. (2) An entity that is permitted or required to be in a combined reporting group, as defined in paragraph (3) of subdivision (b) of Section 25106.5 of Title 18 of the California Code of Regulations.
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