In the case Phelps v. Orange County Assessment Appeals Board No. 1, a leased shopping center was held in trust, with Phelps as the income beneficiary of the trust. On Phelps’ death, his interest as the income beneficiary of the trust passed to his four children. On this transfer, the Orange County Tax Assessor reassessed the value of the property and increased the property taxes. The trust appealed the property’s reassessment to the Assessment Appeals Board, but the appeal was denied.

At trial, the court denied the children’s petition to overturn the board’s ruling, on grounds that the transfer of the income beneficiary interest did qualify as a "change in ownership" under Revenue and Taxation Code section 60, thus warranting reassessment.

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