California Form 3885l - Depreciation And Amortization - 2016 Page 2

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Additional differences may occur for the following:

Line 4 – California amortization for intangibles placed in service

beginning before the 2016 taxable year.

y Luxury Automobile Depreciation: California generally conforms to

the federal 2003 increase (IRC Section 280F) for the limitation on

Enter total California amortization for intangibles placed in service

luxury automobile depreciation. In addition, SUVs and minivans built

beginning before the 2016 taxable year, taking into account any

on a truck chassis are included in the definition of trucks and vans

differences in asset basis or differences in California and federal tax law.

when applying the 6,000 pound gross weight limit.

Assets with a Federal Basis Different from California Basis

y Amortization of Certain Intangibles (IRC Section 197): Property

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

classified as Section 197 property under federal law is also

have a different adjusted basis for California purposes due to the

Section 197 property for California purposes. There is no separate

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

California election required or allowed. However, for Section 197

the list of depreciation and amortization items in the instructions

property acquired before January 1, 1994, the California adjusted

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

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

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

federal amortization period.

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

y Qualified Indian Reservation Property: California has not conformed

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

to the accelerated recovery periods available under the Alternative

more information.

Depreciation System (ADS) for such property.

Line 6 – Total Depreciation and Amortization

y Grapevines Subject to Phylloxera or Pierce’s Disease: For

California purposes, replacement grapevines may be depreciated

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

using a recovery period of five years instead of ten years.

Schedule B, line 17a.

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

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

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

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

should separately compute depreciation for each activity. Use the

Specific Line Instructions

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

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

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

Line 1 – California depreciation for assets and amortization for

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

intangibles placed in service during the 2016 taxable year.

California amounts to determine the depreciation amount to enter on

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

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

assets or property placed in service during the 2016 taxable year. Enter

a Partnership or an S Corporation.

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

Line 7

Line 2 – California depreciation for assets placed in service beginning

Enter the IRC Section 179 expense deduction amount from line 12 of the

before the 2016 taxable year.

following worksheet.

Enter total California depreciation for assets placed in service beginning

These limitations apply to the LLC and each member.

before the 2016 taxable year, 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

Follow the instructions on federal Form 4562, Depreciation and Amortization, for listed property.

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

$ 25,000

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

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

$200,000

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 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 2015. 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 12 and on form FTB 3885L, line 7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12

13 Carryover of disallowed deduction to 2017. Add line 9 and line 10 and subtract line 12. Enter here and on line 8

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

Page 2 FTB 3885L Instructions 2016