2006 Instructions For Schedule D (568) (Page 2 of 2) in pdf

basis as of January 1, 1994, must be amortized over the remaining

Assets with a Federal Basis Different from California Basis

federal amortization period.

Some assets placed in service on or after January 1, 1987, will have

a different adjusted basis for California purposes due to the credits

• Qualified Indian Reservation Property: California has not conformed

claimed or accelerated write-offs of the assets. Review the list of

to the accelerated recovery periods available under the Alternative

depreciation and amortization items in the instructions for

Depreciation System (ADS) for such property.

Schedule CA (540), California Adjustments — Residents, and

• Grapevines subject to Phylloxera or Pierce’s Disease: For California

Schedule CA (540NR), California Adjustments — Nonresidents or

purposes, replacement grapevines may be depreciated using a

Part-Year Residents. If the LLC has any other adjustments to make, get

recovery period of five years instead of ten years.

FTB Pub. 1001, Supplemental Guidelines to California Adjustments, for

Note: This list is not intended to be all-inclusive of the federal and state

more information.

differences. For additional information, please refer to California’s R&TC.

Line 6 – Total Depreciation and Amortization

Specific Line Instructions

Add line 3 and line 5. Enter the total on line 6 and on Form 568,

Schedule B, line 17a.

Line 1 – California depreciation for assets placed in service

If depreciation or amortization is from more than one trade or business

after December 31, 2005, and amortization for intangibles

activity, or from more than one rental real estate activity, the LLC

placed in service after December 31, 2005

should separately compute depreciation for each activity. Use the

Complete column (a) through column (i) for each asset or group of

depreciation computed on this form to identify the net income for each

assets or property placed in service after December 31, 2005. Enter the

activity. Report the net income from each activity on an attachment to

column (f) totals on line 1(f). Enter the column (i) totals on line 1(i).

Schedule K-1 (568), Member’s Share of Income, Deductions, Credits,

etc., for purposes of passive activity reporting requirements. Use

Line 2 – California depreciation for assets placed in service

California amounts to determine the depreciation amount to enter on

before January 1, 2006

line 14 of federal Form 8825, Rental Real Estate Income and Expenses of

Enter total California depreciation for assets placed in service prior to

Partnership or an S Corporation.

January 1, 2006, taking into account any differences in asset basis or

Line 7 –

Enter the Internal Revenue Code (IRC) Section 179 expense

differences in California and federal tax law.

election amount from line 12 of the following worksheet.

Line 4 – California amortization for intangibles placed in

These limitations apply to the LLC and each member.

service before January 1, 2006

Enter total California amortization for intangibles placed in service prior

to January 1, 2006, taking into account any differences in asset basis or

differences in California and federal tax law.

Election to Expense Certain Tangible Property (IRC Section 179) Worksheet

Note: Follow the instructions on federal Form 4562 for listed property.

$ 25,000

1 Maximum dollar limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1 __________________

2 Total cost of IRC Section 179 property placed in service during the taxable year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 __________________

$200,000

3 Threshold cost of IRC Section 179 property placed in service during the taxable year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 __________________

4 Reduction in limitation. Subtract line 3 from line 2. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 __________________

5 Dollar limitation for taxable year. Subtract line 4 from line 1. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 __________________

(a)

(b)

(c)

Description of property

Cost

Elected cost

7 Listed property. Use federal Form 4562, Part V, line 29. Make any adjustments for California law and basis differences . . . . . . . . . 7 __________________

8 Total elected cost of IRC Section 179 property. Add amounts in column (c), line 6 and line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 __________________

9 Tentative deduction. Enter the smaller of line 5 or line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 __________________

10 Carryover of disallowed deduction from 2005. See instructions for line 10 through line 13 on federal Form 4562 . . . . . . . . . . . . . 10 __________________

11 Income limitation. Enter the smaller of line 5 or the aggregate of the LLC’s items of income and expense described in

IRC Section 702(a) from any business actively conducted by the LLC, other than credits, tax-exempt IRC Section 179

expense deduction, and guaranteed payments under IRC Section 707(c) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11 __________________

12 IRC Section 179 expense deduction. Add line 9 and line 10, but do not enter more than line 11. Enter on

Schedule K (568), line 9 and on form FTB 3885L, line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 __________________

13 Carryover of disallowed deduction to 2007. Add line 9 and line 10 and subtract line 12. Enter here and on line 8

of form FTB 3885L . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 __________________

Page 36 Schedule D (568)/FTB 3885L Instructions 2006

2006 Instructions For Schedule D (568) Page 2

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