California Code of Regulations
Title 10 - Investment
Chapter 3 - Commissioner of Financial Protection and Innovation
Subchapter 2 - Corporate Securities
Article 4 - Standards for the Exercise of the Commissioner's Authority
Subarticle 10 - Real Estate Programs
Miscellaneous Provisions
Section 260.140.118.3 - Reinvestment of Cash Available for Distribution from Operations and Proceeds on Disposition of Property

(a) Reinvestment of cash available for distribution from operations or proceeds from a disposition or refinancing of property is allowed so long as sufficient cash will be distributed to investors to pay any resulting state or federal income tax. The amount to be distributed may be determined upon an assumption that all investors are in a specified tax bracket.

(b) Reinvestment does not include placements of funds held as reserves or short-term deposits (90 days or less) to fund distributions to investors.