Cal. Rev. & Tax. Code § 24901

(a) The gain from the sale or other disposition of property shall be the excess of the amount realized therefrom over the adjusted basis provided in Section 24911 for determining gain, and the loss shall be the excess of the adjusted basis provided in that section for determining loss over the amount realized.
(b) The amount realized from the sale or other disposition of property shall be the sum of any money received plus the fair market value of the property (other than money) received. In determining the amount realized—
1. (1) There shall not be taken into account any amount received as reimbursement for real property taxes which are treated under Section 24346 as imposed on the purchaser, and
2. (2) There shall be taken into account amounts representing real property taxes which are treated under Section 24346 as imposed on the corporation if those taxes are to be paid by the purchaser.
(c) In the case of a sale or exchange of property, the extent to which the gain or loss determined under this section shall be recognized for purposes of this part shall be determined under Section 24902.
(d) Nothing in this section shall be construed to prevent (in the case of property sold under contract providing for payment in installments) the taxation of that portion of any installment payment representing gain or profit in the year in which that payment is received.
(e)
1. (1) In determining gain or loss from the sale or other disposition of a term interest in property, that portion of the adjusted basis of that interest which is determined pursuant to Sections 24914 and 24915 (to the extent that the adjusted basis is a portion of the entire adjusted basis of the property) shall be disregarded.
2. (2) For purposes of paragraph (1), the term “term interest in property” means—
  1. (A) A life interest in property,
  2. (B) An interest in property for a term of years, or
  3. (C) An income interest in a trust.
3. (3) Paragraph (1) shall not apply to a sale or other disposition which is a part of a transaction in which the entire interest in property is transferred to any person or persons.