Instructions For Schedule D (100s) - 2016

ADVERTISEMENT

2016 Instructions for Schedule D (100S)
S Corporation Capital Gains and Losses and Built-In Gains
References in these instructions are to the Internal Revenue Code (IRC) as of January 1, 2015, and to the California Revenue and Taxation Code (R&TC).
Important Information
Specific Line Instructions
Line 10
See form FTB 3805Q, Net Operating Loss
The alternative withholding rates for the
SECTION A – 8.84% Tax on Built‑In Gains
(NOL) Computation and NOL and Disaster Loss
sale of California real property is 13.8%
Limitations — Corporations, in the Form 100S
Part I – Short‑Term Capital Gains and
for S corporations or 15.8% for financial
Booklet, for more information.
Losses ‑ Assets Held One Year or Less
S corporations.
SECTION B – 1.5% Tax on Capital Gains
and Part II – Long‑Term Capital Gains
Buyers are required to withhold on each
Use Section B, Part I and Part II to report the
and Losses ‑ Assets Held More Than One
installment sale payment if the sale of California
sale or disposition of all capital assets acquired
Year
real property is structured as an installment sale.
as an S corporation or which are not reported
Use Part I and Part II to report and summarize
When determining the built-in gains tax,
in Section A. For more information, get the
gains and losses attributable to: (1) sale or
C corporations that were required to convert
instructions for federal Schedule D (Form 1120S).
exchange of capital assets; and (2) gains on
to S corporations for California purposes are
Property Subject to IRC Section 179 Recapture:
distributions to shareholders of appreciated
deemed to have elected S corporation status
Gain on property subject to the IRC Section 179
assets that are capital assets. Be sure to use the
on the effective date of their federal election
expense deduction recapture must be included
California basis for all assets when computing
regardless of the effective date for state purposes.
in the taxable income of the S corporation.
the gain or loss. Get the instructions for federal
To accomplish this, the S corporation should
Schedule D (Form 1120S), Capital Gains and
General Information
complete two sets of Schedule D-1, Sales of
Losses and Built-In Gains, for more information.
In general, for taxable years beginning on or
Business Property, and Schedule D (100S). One
Line 1 and Line 4
after January 1, 2015, California law conforms
set of Schedule D-1 and Schedule D (100S)
Report short-term or long-term capital gains or
to the Internal Revenue Code (IRC) as of
will include the gain or loss from the sale or
losses from form FTB 3725, Assets Transferred
January 1, 2015. However, there are continuing
disposition of IRC Section 179 assets as well as
from Corporation to Insurance Company, on
differences between California and federal law.
gain or loss from non-IRC Section 179 business
Schedule D (100S). Make sure to enter on
When California conforms to federal tax law
assets, and will be reported on the Form 100S.
Schedule D (100S), line 1 and/or line 4, under
changes, we do not always adopt all of the
Indicate at the top of this Schedule D-1
column (a) Description of property: “FTB 3725.”
changes made at the federal level. For more
and Schedule D (100S) “IRC Section 179
Enter the amount of short-term or long-term
information, go to ftb.ca.gov and search for
and Business Assets.” When completing
capital gains (losses) from form FTB 3725, on
conformity. Additional information can be found
Schedule D-1 and Schedule D (100S) for the
Schedule D (100S), line 1, column (f), and/or
in FTB Pub. 1001, Supplemental Guidelines
Form 100S, skip any instructions to report
line 4, column (f).
to California Adjustments, the instructions for
the gain or loss on Form 100S, Schedule K,
California Schedule CA (540 or 540NR), and the
S Corporation Shareholder’s Shares of Income,
Line 2 and Line 5
Business Entity tax booklets.
Deductions, Credits, etc. or Schedule K-1 (100S),
Use California amounts when figuring the amount
Shareholder’s Share of Income, Deductions,
to enter for short or long-term capital gains or
The instructions provided with California tax
Credits, etc. Transfer the gain amount to
losses from like-kind exchanges from federal
forms are a summary of California tax law and are
Form 100S, Side 1, line 4.
Form 8824.
only intended to aid taxpayers in preparing their
state income tax returns. We include information
The second set of Schedule D-1 and
Part III – Tax on Built‑In Gains
that is most useful to the greatest number of
Schedule D (100S) is to report the gain or loss on
The recognition period for built-in gains under
taxpayers in the limited space available. It is
non-IRC Section 179 business assets for use on
California law is 10 years.
not possible to include all requirements of the
the Schedule K and Schedule K-1. To accomplish
Line 7
California Revenue and Taxation Code (R&TC) in
this, the S corporation should complete a
To determine if the S corporation is subject to
the instructions. Taxpayers should not consider
Schedule D-1 and Schedule D (100S) with the
the instructions as authoritative law.
tax on built-in gains, see General Information J,
gain or loss for the non-IRC Section 179 business
Built-In Gains, in the Form 100S Booklet, and
assets only. The amounts from this Schedule D-1
Purpose
get the instructions for federal Schedule D
and Schedule D (100S) will be reported on
(Form 1120S).
the Schedule K and Schedule K-1 (100S).
Schedule D (100S), S Corporation Capital Gains
Indicate at the top of this Schedule D-1 and
Apportioning Corporations Only:
and Losses and Built-In Gains, is divided into
Schedule D (100S) set “Non-IRC Section 179
All recognized built-in gains and all recognized
Section A and Section B. Use Section A to
Business Assets Only.”
built-in losses must be apportioned and allocated
report all built-in gains subject to the 8.84%
to California according to the current year’s
Part I – Short‑Term Capital Gains and
tax rate (10.84% for financial S corporations).
Schedule R and included on line 7.
Losses – Assets Held One Year or Less
Use Section B to report all other capital gains
subject to the 1.5% tax rate (3.5% for financial
Line 9
Line 1
S corporations). For more information, see
Compute the California net unrealized built-in gain
Enter short-term capital gains or losses
General Information J, Built-In Gains, in the
reduced by the California net recognized built-in
from form FTB 3725 on Schedule D (100S),
Form 100S, S Corporation Tax Booklet.
gain from prior years if the S corporation:
line 1, column (f). Make sure to enter on
Complete federal Form 8824, Like-Kind
• Filed its election to be an S corporation after
Schedule D (100S), line 1, under column (a)
Exchanges, using California amounts when
1986.
Description of property: “FTB 3725.”
computing gain from like-kind exchanges.
• Was a C corporation before it elected to be
Part II – Long‑Term Capital Gains and
an S corporation, or acquired an asset with a
Losses – Assets Held More Than One
basis determined by reference to its basis (or
Year
the basis of any other property) in the hands
of a C corporation.
Line 4
• Had a California net unrealized built-in gain as
Enter long-term capital gains or losses
defined in IRC Section 1374(d)(1), that was in
from form FTB 3725 on Schedule D (100S),
excess of the California net recognized built-in
line 4, column (f). Make sure to enter on
gain from prior years.
Schedule D (100S), line 4, under column (a)
On line 9, enter the smaller of line 7, line 8, or the
Description of property: “FTB 3725.”
amount computed above.
Schedule D (100S) Instructions 2016 Page 1

ADVERTISEMENT

00 votes

Related Articles

Related forms

Related Categories

Parent category:
Go