Instructions For Form Ftb 3885p printable pdf download

Instructions for Form FTB 3885P

Depreciation and Amortization

General Information

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

state differences. For additional information, please refer to California’s

In general, California tax law conforms to the Internal Revenue Code

Revenue and Taxation Code.

(IRC) as of January 1, 1998. However, there are continuing differences

between California and federal tax law. California has not conformed to

Specific Line Instructions

most of the changes made to the IRC by the federal Internal Revenue

Service Restructuring and Reform Act of 1998 (Public Law 105-206)

Line 1 – California depreciation for assets placed in service

and has not conformed to any changes made by the Tax and Trade

after December 31, 1999 and amortization for intangibles

Relief Extension Act of 1998 (Public Law 105-277), the Miscellaneous

placed in service after December 31, 1999.

Trade and Technical Corrections Act of 1999 (Public Law 106-36), and

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

the Ticket to Work and Work Incentives Improvement Act of 1999

assets or property placed in service after December 31, 1999. Enter the

(Public Law 106-170).

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

A Purpose

Line 2 – California depreciation for assets placed in service

Use form FTB 3885P, Depreciation and Amortization, to compute

before January 1, 2000

depreciation and amortization allowed as a deduction on Form 565,

Enter total California depreciation for assets placed in service prior to

Partnership Return of Income. Attach form FTB 3885P to Form 565.

January 1, 2000, taking into account any differences in asset basis or

Depreciation is the annual deduction allowed to recover the cost or

differences in California and federal tax law.

other basis of business or income producing property with a determin-

Line 4 – California amortization for intangibles placed in

able useful life of more than one year. Land is not depreciable.

service before January 1, 2000

Amortization is an amount deducted to recover the cost of certain

Enter total California amortization for intangibles placed in service

capital expenses over a fixed period.

prior to January 1, 2000, taking into account any differences in asset

In general, California conforms to federal law for assets placed in

basis or differences in California and federal tax law.

service on or after January 1, 1987. See California Revenue and Taxation

Code (R&TC) Section 17250.

Assets with a Federal Basis Different from California Basis

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

B Federal/State Calculation Differences

different adjusted basis for California purposes due to the credits

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

California law has not always conformed to federal law with regard to

depreciation and amortization items in the instructions for

depreciation methods, special credits, or accelerated write-offs.

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

Consequently, the recovery periods and the basis on which the

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

depreciation is calculated may be different from the amounts used for

Part-Year Residents. If the partnership has any other adjustments to

federal purposes. Reportable differences may occur if all or part of

make, get FTB Pub. 1001, Supplemental Guidelines to California

your assets were placed in service:

Adjustments, for more information.

• Before January 1, 1987: California did not allow depreciation

under the federal Accelerated Cost Recovery System (ACRS).

Line 6 – Total Depreciation and Amortization

California depreciation is calculated in the same manner as in prior

Add line 3 and line 5. Enter the total on line 6 and on Form 565,

years for those assets.

Schedule B, line 16a.

• On or after January 1, 1987: California provides special credits and

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

accelerated write-offs that affect the California basis for qualifying

activity, or from more than one rental real estate activity, the partner-

assets. California does not conform to all the changes to federal law

ship should separately compute depreciation for each activity. Use the

enacted in 1993. Therefore, the California basis or recovery periods

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

may be different for some assets.

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

Additional differences may occur for the following:

Schedule K-1 (565), Partner’s Share of Income, Deductions, Credits,

• Amortization of certain intangibles (IRC Section 197): Property

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

classified as Section 197 property under federal law is also Section

California amounts to determine the depreciation amount to enter on

197 property for California purposes. There is no separate

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

California election required or allowed. However, for Section 197

of Partnership or an S Corporation.

property acquired before January 1, 1994, the California adjusted

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

federal amortization period.

• Qualified Indian reservation property: California has not con-

formed to the accelerated recovery periods available under the

Alternative Depreciation System (ADS) for such property.

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

California purposes, replacement grapevines may be depreciated

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

FTB 3885P/Schedule D (565) Instructions 2000 Page 1

Instructions For Form Ftb 3885p

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