Instructions For Schedule D-1 - Sales Of Business Property

Line 21 – Compare your federal amount entered

Line 29a – Enter the additional depreciation for

Column (b) – Enter the recovery deductions

on line 19 with your California amount entered

the period after December 31, 1976. For IRC

allowable on the property in prior tax years. Any

on line 20. If the amount on line 19 is more than

Section 1250 property held more than one year,

deduction allowable under IRC Section 179 on

the amount on line 20, enter the difference on

additional depreciation is the excess of actual

that property is treated as if that deduction was a

line 21(a) and on Schedule CA (540 or 540NR),

depreciation over depreciation figured using

recovery deduction under IRC Section 168.

line 14, column B. If the amount on line 20 is

the straight-line method. For IRC Section 1250

Line 37, Column (a) – Enter the depreciation

more than the amount on line 19, enter the

property held one year or less, all depreciation is

allowable on the IRC Section 179 amount from

difference on line 21(b) and on Schedule CA (540

additional depreciation.

the time it was placed in service (on or after

or 540NR), line 14, column C.

Line 29b – Use 100% as the percentage for this

January 1, 1987) to the current year.

line unless you have low-income rental property

Part III

Column (b) – Enter the recovery deductions that

described in IRC Section 1250(a)(1)(B).

would have been allowed if the property had not

Generally, do not complete Part III for property

Line 29d – Enter the additional depreciation after

been predominantly used in a qualified business.

held one year or less; use Part II instead.

December 31, 1970 and before January 1, 1977.

Figure the deductions from the year it was placed

Use Part III to compute recapture of depreciation

If the straight-line depreciation is more than the

in service to the current year.

and certain other items that must be reported as

additional depreciation after December 31, 1970

Line 38 – If the recapture amount on your federal

ordinary income upon the disposition of property.

and before January 1, 1977, reduce line 29a by the

Form 4797, line 35, is different from the recapture

Complete line 22 through line 27 to determine

excess amount, but not below zero.

amount on Schedule D-1, line 38, an adjustment

the gain on the disposition of the property. If

Line 29f – Refer to the instructions for

is required on your California tax return as

you have more than 4 transactions to report, use

federal Form 4797, line 26f. California law

follows:

additional forms.

generally follows IRC Section 291 except IRC

Individuals: Figure the difference between

For examples of IRC Sections 1245, 1250, 1252,

Sections 291(a)(3) and 291(b)(1) have been

the federal amount and the California amount,

1254, and 1255 property, see instructions for

modified. Enter the ordinary income amount

and enter on the line for reporting the type of

federal Form 4797.

computed according to the federal instructions

business income that resulted in the recapture on

Line 25 – Taxpayers other than partnerships,

using California figures.

Schedule CA (540 or 540NR) as follows:

LLCs, or S corporations, complete the following

IRC Section 1252 Property

• If the federal amount is more than the

steps to figure the amount to enter on line 25.

California amount, enter the difference on

Partnerships, skip line 30a through line 30c.

• Add depreciation or depletion allowed or

Schedule CA, column B.

Partners should enter on the applicable lines of

allowable, amortization or Accelerated Cost

• If the California amount is more than the

Part III amounts subject to IRC Section 1252

Recovery System (ACRS) deductions if it is

f ederal amount, enter the difference on

according to instructions from the partnership.

recovery property.

Schedule CA, column C.

• Add the IRC Section 179 expense deducted.

You may have ordinary income on the disposition

Corporations: Form 100 or Form 100W, line 8,

• Subtract any IRC Sections 179 and 280F(b)(2)

of certain farm land held more than one year but

other additions; or line 15, other deductions for

recapture amount included in gross income in

less than 10 years.

the difference between California and federal

a prior taxable year because the business use

Gain from disposition of certain farm land is

recapture amounts.

of the property dropped to 50% or less.

subject to ordinary income rules under IRC

S corporations: Form 100S, line 7, other

Use the amount claimed on your California tax

Section 1252 before being considered under IRC

additions; or line 12, other deductions for

return under R&TC Section 17201 when adding

Section 1231 (Part I).

the difference between California and federal

or subtracting IRC Section 179 expense.

Line 30b – Enter 100% of line 30a on line 30b if

recapture amounts. Also, Schedules K (100S) and

You may have to include depreciation allowed

your property was held for 10 years or longer. If

K-1 (100S), line 10b or line 12e.

or allowable on another asset (and recompute

your property was held for less than 10 years, use

Partnerships or Limited Liability Companies:

the basis amount for line 24) if you use its

the same percentage required by federal law.

Schedules K (565 or 568) and K-1 (565 or 568),

adjusted basis in determining the adjusted

Part IV

lines 11b and 11c or line 13e.

basis of the property described on line 22. An

example is property acquired by a trade-in. (See

Complete column (a) of line 36 through line 38

Section 1.1245-2(a)(4) of the federal regulations.)

of Part IV to figure the amount to be recaptured if

all of the following apply:

Partnerships, LLCs, and S corporations that sell,

exchange, or otherwise dispose of property for

• You took a deduction under IRC Section 179

which an IRC Section 179 expense deduction

for property placed in service on or after

was previously passed through to the partners,

January 1, 1987 [other than listed property, as

members, or S corporation shareholders, see

defined in IRC Section 280F(d)(4)].

the instructions under General Information B,

• The property was not used predominantly in

Special Rules.

your trade or business at any time.

• That property ceased to be qualified property

In all other cases, partnerships and LLCs should

before the close of the second taxable year

enter the depreciation or depletion allowed or

after it was placed in service.

allowable or amortization on line 25. Enter any

IRC Section 179 expenses on Schedule K-1 (565

IRC Section 280F(b)(2) Property. If you have

or 568), line 12.

listed property that you placed in service in a prior

year and the business use dropped to 50% or

In all other cases, S corporations should enter the

less this year, figure the amount to be recaptured.

depreciation or depletion allowed or allowable,

Complete column (b), line 36 through line 38, of

amortization, ACRS or Modified Accelerated

Part IV.

Cost Recovery System (MACRS) deductions on

line 25. Enter any IRC Section 179 expenses on

If you have more than one property subject to the

Schedule K-1 (100S), line 11.

recapture rules, use separate statements to figure

the recapture amounts for each property and

IRC Section 1245 Property

attach the statements to your tax return.

California law generally is the same as federal

Line 36, Column (a) – Enter the IRC Section 179

law. See federal Form 4797 for examples of IRC

expense claimed on your California tax return

Section 1245 property.

under R&TC Section 17201 that was deducted

IRC Section 1250 Property

when the property was placed in service.

California law generally is the same as federal

law except for certain modifications to IRC

Section 1250(b). See R&TC Section 18171.

Schedule D-1 Instructions 2016 Page 3

Instructions For Schedule D-1 - Sales Of Business Property - 2016 Page 3

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