Questions and Answers
FPPC Form 700 (2015/2016)
FPPC Toll-Free Helpline: 1 (866) ASK-FPPC - (866) 275-3772
Instructions - Page 4-6
Q. What is the reporting period for disclosing interests on an assuming office statement or a candidate statement?
A. On an assuming office statement, disclose all reportable investments, interests in real property, and business positions held on the date you assumed office. In addition, you must disclose income (including loans, gifts and travel payments) received during the 12 months prior to the date you assumed office.
On a candidate statement, disclose all reportable investments, interests in real property, and business positions held on the date you file your declaration of candidacy. You must also disclose income (including loans, gifts and travel payments) received during the 12 months prior to the date you file your declaration of candidacy.
Q. I hold two other board positions in addition to my position with the county. Must I file three statements of economic interests?
A. Yes, three are required. However, you may complete one statement listing the county and the two boards on the Cover Page or an attachment as the agencies for which you will be filing. Report your economic interests using the largest jurisdiction and highest disclosure requirements assigned to you by the three agencies. Make two copies of the entire statement before signing it, sign each copy with an original signature, and distribute one original to the county and to each of the two boards. Remember to complete separate statements for positions that you leave or assume during the year.
Q. I am a department head who recently began acting as city manager. Should I file as the city manager?
A. Yes. File an assuming office statement as city manager. Persons serving as "acting," "interim," or "alternate" must file as if they hold the position because they are or may be performing the duties of the position.
Q. As a designated employee, I left one state agency to work for another state agency. Must I file a leaving office statement?
A. Yes. You may also need to file an assuming office statement for the new agency.
Q. My spouse and I are currently separated and in the process of obtaining a divorce. Must I still report my spoouse's income, investments, and interest in real property?
A. Yes. A public official must contniue to report a spouse's economic interests until such time as dissolution of marriage proceedings is final. However, if a separate property agreement has been reached prior to that time, your estranged spouse's income may not have to be reported. Contact the FPPC for more information.
Q. I have an investment interest in shares of stock in a company that does not have an office in my jurisdiction. Must I still disclose my investment interest in this company?
A. Probably. The definition of "doing business in the jurisdiction" is not limited to whether the business has an office or physical location in your jurisdiction. See Reference Pamphlet, page 13.
Q. My spouse and I have a living trust. The trust holds rental property in my jurisdiction, our primary residence, and investments in diversified mutual funds. I have full disclosure. How is this trust disclosed?
A. Disclose the name of the trust, the rental property and its income on Schedule A-2. Your primary residence and investments in diversified mutual funds registered with the SEC are not reportable.
Q. I am required to report all investments. I have an IRA that contains stocks through an account managed by a brokerage firm. Must I disclose these stocks even though they are held in an IRA and I did not decide which stocks to purchase?
A. Yes. Disclose on Schedule A-1 or A-2 any stock worth $2,000 or more in a business entity located in or doing business in your jurisdiction.
Q. I am the sole owner of my business, an S-Corporation. I believe that the nature of the business is such that it cannot be said to have any "fair market value" because it has no assets. I operate the corporation under an agreement with a large insurance company. My contract does not have resale value because of its nature as a personal services contract. Must I report the fair market value for my business on Schedule A-2 of the Form 700?
A. Yes. Even if there are no tangible assets, intangible assets, such as relationships with companies and clients are commonly sold to qualified professionals. The "fair market value" is often quantified for other purposed, such as marital dissolutions or estate planning. In addition, the IRS presumes that "personal services corporations" have a fair market value. A professional "book of business" and the associated goodwill that generates income are not without a determinable value. The Form 700 does not require a precise fair market value; it is only necessary to check a box indicating the broad range within which the value falls.
Q. I own stock in IBM and must report this investment on Schedule A-1. I initially purchased this stock in the early 1990s; however, I am constantly buying and selling shares. Must I note these dates in the "Acquired" and "Disposed" fields?
A. No. You must only report dates in the "Acquired" or "Disposed" fields when, during the reporting period, you initially purchase a reportable investment worth $2,000 or more or when you dispose of the entire investment. You are not required to track the partial trading of an investment.
Q. On last year's filing I reported stock in Encoe valued at $2,000 - $10,000. Late last year the value of this stock fell below and remains at less than $2,000. How should this be reported on this year's statement?
A. You are not required to report an investment if the value was less than $2,000 during the entire reporting period. However, because a disposed date is not required for stocks that fall below $2,000, you may want to report the stock and note in the "comments" section that the value fell below $2,000. This would be for informational purposes only; it is not a requirement.
Q. We have a Section 529 account set up to save money for our son's college education. Is this reportable?
A. If the Section 529 account contains reportable interests (e.g., common stock valued at $2,000 or more), those interests are reportable (not the actual Section 529 account). If the account contains solely mutual funds, then nothing is reported.
Q. I reported a business entity on Schedule A-2. Clients of my business are located in several states. Must I report all clients from whom my pro rata share of income is $10,000 or more on Schedule A-2, Part 3?
A. No, only the clients doing business on a regular basis in your jurisdiction must be disclosed.
Q. I believe I am not required to disclose the names of clients from whom my pro rata share of income is $10,000 or more on Schedule A-2 because of their right to privacy. Is there an exception for reporting clients' names?
A. Regulation 18740 provides a procedure for requesting an exemption to allow a client's name not to be disclosed if disclosure of the name would violate a legally recognized privilege under California or Federal law. This regulation may be obtained from our website at www.fppc.ca.gov. See Reference Pamphlet, page 14.
Q. I am sole owner of a private law practice that is not reportable based on my limited disclosure category. However, some of the sources of income to my law practice are from reportable sources. Do I have to disclose this income?
A. Yes, even though the law practice is not reportable, reportable sources of income to the law practice of $10,000 or more must be disclosed. This information would be disclosed on Schedule C with a note in the "comments" section indicating that the business entity is not a reportable investment. The note would be for informational purposes only; it is not a requirement.
Q. I am the sole owner of my business. Where do I disclose my income - on Schedule A-2 or Schedule C?
A. Sources of income to a business in which you have an ownership interest of 10% or greater are disclosed on Schedule A-2. See Reference Pamphlet, page 8, for the definition of "business entity."
Q. My husband is a partner in a four-person firm where all of his business is based on his own billings and collections from various clients. How do I report my community property interest in this business and the income generated in this manner?
A. If your husband's investment in the firm is 10% or greater, disclose 100% of his share of the business on Schedule A-2, Part 1 and 50% of his income on Schedule A-2, Parts 2 and 3. For example, a client of your husband's must be a source of at least $20,000 during the reporting period before the client's name is reported.
Q. How do I disclose my spouse's or registered domestic partner's salary?
A. Report the name of the employer as a source of income on Schedule C.
Q. I am a doctor. For purposes of reporting $10,000 sources of income on Schedule A-2, Part 3, are the patients or their insurance carriers considered sources of income?
A. If your patients exercise sufficient control by selecting you instead of other doctors, then your patients, rather than their insurance carriers, are sources of income to you. See Reference Pamphlet, page 14, for additional information.
Q. I received a loan from my grandfather to purchase my home. Is this loan reportable?
A. No. Loans received from family members are not reportable.
Q. I am running for re-election to city council and made a personal loan to my campaign committee. Is this reportable on my Form 700?
A. No, the loan is not reportable on Form 700; however, loan repayments from a campaign committee are reported on Schedule C as income.
Q. Many years ago, I loaned my parents several thousand dollars, which they paid back this year. Do I need to report this loan repayment on my Form 700?
A. No. Payments received on a loan made to a family member are not reportable.
Real Property Disclosure
Q. During this reporting period we switched our principal place of residence into a rental. I have full disclosure and the property is located in my agency's jurisdiction, so it is now reportable. Because I have not reported this property before, do I need to show an "acquired" date?
A. No, you are not required to show an "acquired" date because you previously owned the property. However, you may want to note in the "comments" section that the property was not previously reported because it was used exclusively as your residence. This would be for informational purposes only; it is not a requirement.
Q. My daughter is buying her first home and I am the co-signer on the loan. I won't occupy the home, but my daughter will. The home is located in my agency's jurisdiction. Must I report this property?
A. No. Property occupied by a family member is not reportable as long as you are not receiving rental income or using the property for business purposes.
Q. If I received a reportable gift of two tickets to a concert valued at $100 each, but gave the tickets to a friend because I could not attend the concert, do I have any reporting obligations?
A. Yes. Since you accepted the gift and exercised discretion and control of the use of the tickets, you must disclose the gift on Schedule D.
Q. Mary and Joe Benson, a married couple, want to give a piece of artwork to a county supervisor. Is each spouse considered a separate source for purposes of the gift limit and disclosure?
A. Yes, each spouse may make a gift valued at the gift limit during a calendar year. For example, during 2015 the gift limit was $460, so the Bensons may have given the supervisor artwork valued at no more than $920. The supervisor must identify Joe and Mary Benson as the sources of the gift.
Q. I am a Form 700 filer with full disclosure. Our agency holds a holiday raffle to raise funds for a local charity. I bought $10 worth of raffle tickets and won a gift basket valued at $120. The gift basket was donated by Doug Brewer, a citizen in our city. At the same event, I bought raffle tickets for, and won a quilt valued at $70. The quilt was donated by a coworker. Are these reportable gifts?
A. Because the gift basket was donated by an outside source (not an agency employee), you have received a reportable gift valued at $110 (the value of the basket less the consideration paid). The source of the gift is Doug Brewer and the agency is disclosed as the intermediary. Because the quilt was donated by an employee of your agency, it is not a reportable gift.
Q. My agency is responsible for disbursing grants. An applicant (501(c)(3) organization) met with agency employees to present its application. At this meeting, the applicant provided food and beverages. Would the food and beverages be considered gifts to the employees? These employees are designated in our agency's conflict of interest code and the applicant is a reportable source of income under the code.
A. Yes. If the value of the food and beverages consumed by any one filer, plus any other gifts received from the same source during the reporting period total $50 or more, the food and beverages would be reported using the fair market value and would be subject to the gift limit.
Q. I received free admission to an educational conference related to my official duties. Part of the conference fees included a round of golf. Is the value of the golf considered informational material?
A. No. The value of personal benefits, such as golf, attendance at a concert, or sporting event, are gifts subject to reporting and limits.
[End of ANSWERING YOUR QUESTIONS - Instructions - Page 4-6]