Instructions For Form 568 - Limited Liability Company Return Of Income

Form 568 Instructions

taxable year, enter the total assets as of the beginning of the

Question P – R&TC Section 18662 and Section 18666 require taxes to be

taxable year.

withheld from certain payments or allocations of income and

remitted to the FTB. If upon examination FTB determines that

Question J – Enter the maximum number of members in the LLC at any time

tax withholding was required, the LLC may be liable for the tax

during the taxable year. The number of Schedule K-1 (568)

along with penalties on the amount.

attached to the Form 568 must equal the number of members

The reference to Form 592, Form 592-A and Form 592-B

entered on Question J. Do not use abbreviations or terms such

relates to LLC withholding. If you need additional information

as ‘‘Various’’.

concerning LLC withholding, please see General Information

Section M and Section T in this booklet.

Question K

through

Question R – If Question 5a through Question 5c on federal Form 1065,

Question V – Check the ‘‘Yes’’ or ‘‘No’’ box.

Schedule B, are all answered ‘‘Yes’’, also answer ‘‘Yes’’ to

Question R on Form 568, Side 1.

Question K – An ‘‘investment partnership’’ is a partnership that meets both of

If Question R is answered ‘‘Yes’’, the LLC is not required to

the following criteria:

complete Schedules L, M-1 and M-2 or Item F on Side 1 of

1. No less than 90% of the cost of the partnership’s total

Form 568 or Item I on Schedule K-1 (568).

assets consist of:

•

Qualifying investment securities;

Question V – Federal Form 8271, Investor Reporting of Tax Shelter

•

Deposits at banks or other financial institutions; and

Registration Number, is required to be attached to any return on

•

Office equipment and office space reasonably necessary

which a deduction, loss, credit or any other tax benefit is

to carry on the activities of an investment partnership.

claimed or reported, or any income reported, from an interest in

a registration-required tax shelter. If you were required to file

2. No less than 90% of the partnership’s gross income is from

this form with your federal return, attach a copy to your

interest, dividends and gains from the sale or exchange of

Form 568. Do not attach copies of federal Schedule K-1 (1065)

qualifying investment securities.

you may have received from a registration-required tax shelter.

‘‘Qualifying investment securities,’’ include:

•

Common and preferred stock, as well as debt securities

Specific Line Instructions

convertible into common stock;

•

Bonds, debentures and other debt securities;

•

Form 568, Side 1

Foreign and domestic currency deposits or equivalents and

securities convertible into foreign securities;

•

Line 1 – Total income from LLC fee worksheet

Mortgage- or asset-backed securities secured by

The amount of LLC fee is determined by taking into account

governmental agencies;

•

‘‘Total income from all sources reportable to California.’’ This

Repurchase agreements and loan participations;

•

means income from all sources before taking into account

Foreign currency exchange contracts and forward and

apportionment and allocation. Use the LLC Income Worksheet

futures contracts on foreign currencies;

•

(included in this booklet) to determine the total income that is

Stock and bond index securities and futures contracts, and

the basis of the LLC fee.

other similar securities;

•

Regulated futures contracts; and

If the entity is a SMLLC that is a disregarded entity computing

•

Options to purchase or sell any of the preceding qualified

the gross receipts fee on this worksheet, enter your amounts for

investment securities, except regulated futures contracts.

the fee computation using the applicable disregarded entity lines

on the form and any other applicable line amounts. Ignore the

‘‘Qualifying investment securities’’ do not include an interest in a

line items addressing Schedule B.

partnership, unless the partnership qualifies as an ‘‘investment

partnership.’’

If the entity is an LLC that owns a disregarded entity, include

items of income and deduction from the disregarded entity on

See R&TC Section 17955 and Section 23040.1 and General

Schedule B. Do not enter any amounts on lines addressing

Information Q for more information.

disregarded entities in the LLC fee worksheet.

Question M – If Question M is answered ‘‘Yes’’ see the federal partnership

If the entity is an LLC that has an ownership interest in a

instructions concerning an election to adjust the basis of the

pass-through entity, contact the pass-through entity in most

LLC’s assets under IRC Section 754.

instances to get the information for line 3, line 9c, line 10c,

line 13b, line 14b, line 15b, line 16b, line 17b and line 18d.

Question O – All LLCs must answer Question O. If the answer is ‘‘Yes’’, a

BOE-100-B, Statement of Change in Control and Ownership of

Line 2 – Limited Liability Company Fee

Legal Entities, must be filed with the State Board of Equalization

Enter the amount of the LLC fee. See General Information H,

(BOE), or substantial penalties may result. Forms and

Limited Liability Company Tax and Fee.

information may be obtained from the BOE at (916) 323-5685.

Line 3 – 1998 Limited Liability Company Tax

Answer ‘‘Yes’’ to Question O if:

Enter the $800 annual LLC tax that was due the 15th day of the

Under R&TC Section 64(c):

4th month (or April 15, 1998 for calendar year filers) after the

•

The percentage of membership interests, including interests

beginning of the LLC’s 1998 tax year and paid with 1998 form

in both the capital and profits, of this company or in any of

FTB 3522.

its subsidiary(ies) owned by one person or one entity

Line 4 – Nonconsenting Nonresident Members’ Tax Liability

cumulatively surpassed 50% during this year;

•

Enter the total tax computed on Schedule T. The LLC is

The total membership interests, including capital and profits

responsible for paying the tax of nonconsenting nonresident

interests, transferred to one irrevocable trust cumulatively

members and nonconsenting owners of disregarded entities.

surpassed 50% during this year;

•

Treat a nonconsenting owner of a disregarded entity in the

One or more members transferred the control of, or the

same manner as a nonconsenting nonresident member. See the

interests in, more than 50% of the total membership

Specific Line Instructions for Schedule T.

interests, including capital and profits interests, to one

person or one entity during this year;

•

Line 13 – Penalties and Interest

This company’s cumulative ownership or control of the

Enter penalties and interest. See General Information I,

membership interests, including capital and profits interests,

Penalties and Interest.

voting stock or other ownership interests in any other legal

entity surpassed 50% during this year; or

Single Member LLC Information and Consent

Under R&TC Section 64(d):

Please complete all requested information. If the owner has

•

both a federal taxpayer identification number (TIN) and a

Cumulatively more than 50% of the total membership

California SOS file number, enter both. Provide the identification

interests, including capital and profits interests, in this

numbers of the entity that will report the items of income,

company have been transferred this year in one or more

deductions, credits, etc., of the disregarded entity and the type

transactions that have occurred since March 1, 1975.

Page 8

Form 568 Booklet 1998

Instructions For Form 568 - Limited Liability Company Return Of Income - 1998 Page 7

Related Articles

Related forms

Related Categories