Looking for a California Franchise Tax Board Forms And Templates? Download it for free!

California election required or allowed. However, for Section 197

Assets with a Federal Basis Different from California Basis

property acquired before January 1, 1994, the California adjusted

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

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

different adjusted basis for California purposes due to the credits

federal amortization period.

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

depreciation and amortization items in the instructions for Schedule CA

• Qualified Indian Reservation Property: California has not conformed

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

to the accelerated recovery periods available under the Alternative

California Adjustments — Nonresidents or Part-Year Residents. If the

Depreciation System (ADS) for such property.

Limited Liability Company (LLC) has any other adjustments to make, get

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

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

purposes, replacement grapevines may be depreciated using a

more information.

recovery period of five years instead of ten years.

Line 6 – Total Depreciation and Amortization

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

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

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

Schedule B, line 17a.

Specific Line Instructions

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

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

Line 1 – California depreciation for assets placed in service

separately compute depreciation for each activity. Use the depreciation

after December 31, 2004 and amortization for intangibles

computed on this form to identify the net income for each activity.

placed in service after December 31, 2004

Report the net income from each activity on an attachment to

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

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

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

assets or property placed in service after December 31, 2004. Enter the

California amounts to determine the depreciation amount to enter on

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

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

Line 2 – California depreciation for assets placed in service

Partnership or an S Corporation.

before January 1, 2005

Line 7 –

Enter the Internal Revenue Code (IRC) Section 179 expense

Enter total California depreciation for assets placed in service prior to

election amount from line 12 of the following worksheet.

January 1, 2005, taking into account any differences in asset basis or

These limitations apply to the Limited Liability Company (LLC) and each

differences in California and federal tax law.

member.

Line 4 – California amortization for intangibles placed in

service before January 1, 2005

Enter total California amortization for intangibles placed in service prior

to January 1, 2005, 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)

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 2004. 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 2006. Add line 9 and line 10 and subtract line 12. Enter here and on line 8

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

Page 32 Schedule D (568)/FTB 3885L Instructions 2005