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can be separately accounted for, only the

In column (d), the amounts entered are the

An estate or trust cannot pass through the

income from within California must be

result of combining column (b) and column (c).

alternative minimum taxable income (AMTI)

included in California source income.

exclusion to the beneficiary. The fiduciaries for

In column (e), the amounts entered are used

• If the trade or business carried on within

the estate or trust must recalculate Schedule P

to report California source income and credits.

California is an integral part of a unitary

(541), by leaving Part I, line 7b blank. This will

Line and Line – Enter in column (b), the

business carried on outside of California,

eliminate the effect of the AMTI exclusion but

amounts from federal Schedule K-1 (1041),

the entire net income must be reported and

allow other items of adjustment or tax preference

and in column (c) any adjustments resulting

apportioned or allocated in accordance with

to be passed through to the beneficiary. The

from differences between California and federal

the provisions of the Uniform Division of

recalculated amount on Schedule P (541), Part I,

law for each specific line item.

Income for Tax Purposes Act as contained

line 10, must be entered on Schedule K-1 (541),

Line 3 – Enter the combined amount from

in R&TC Sections 25120 through 25139.

line 12a, column (d).

federal Schedule K-1 (1041), line 3 and line 4a.

Partnership, limited liability company, and

Line b through Line e – Enter the

Gains or losses from the complete or partial

S corporation income (loss), is apportioned

amounts from Schedule P (541), line 4. Get the

disposition of a rental real estate or trade or

or allocated in the same manner as any other

instructions for federal Schedule K-1 (1041)

business activity that is a passive activity must

business. If the estate or trust is a partner,

for more information.

be shown on an attachment to Schedule K-1

member, or S corporation shareholder in a

Line 3 and Line 4 – Enter the beneficiary’s

(541).

business entity, income sourced to California

trust payments, withholding, taxes paid to

Line 5 – Enter on line 5 the benefiary’s share

is generally included in column (e) of

other states, and/or other credits. Attach

Schedules K-1 (565, 568, or 100S). For more

of annuities, royalties, or any other income

a separate sheet for each item reported

(before directly allocable deductions) that

information, see Cal. Code Regs., tit. 18,

on line 13a-d and line 14a showing the

is not subject to any passive activity loss

section 17951.4 and related tax codes.

computation. Items that must be reported on

limitation rules at the beneficiary level.

See Cal. Code Regs., tit. 18 sections 17951-1(c),

this line include the allocable share, if any, of

Line 6 through Line 8 – Enter the beneficiary’s

17951-2, and 17953 regarding taxability of

items listed on line 13a through line 14a.

share of trade or business, rental real estate, and

distributions to nonresident beneficiaries.

Line 3a – Enter the beneficiary’s share of

other rental income, minus allocable deductions

If California source income is being

estimated payment credited.

(other than directly apportionable deductions). To

distributed to a nonresident beneficiary, see

Form 541-T, Allocation of Estimated Tax

assist the beneficiary in figuring any applicable

instructions regarding withholding in General

Payments to Beneficiaries, must be submitted

passive activity loss limitations, also attach a

Information Q, Miscellaneous Items, of the

in order for the beneficiary to receive credit for

separate schedule showing the beneficiary’s share

Form 541 instructions.

the payments.

of income derived from each trade or business,

If the beneficiary of an estate or trust was a

rental real estate, and other rental activity.

Line 3b – If taxes were withheld by

resident of California for the estate’s or trust’s

the fiduciary, or there is a pass-through

Line 9a through line 9c – Enter the

entire taxable year, the beneficiary’s share of

withholding credit from another entity,

beneficiary’s share of the depreciation and

the estate’s or trust’s income or loss for the

the fiduciary must provide each affected

depletion deductions directly apportioned

taxable year is taxable to California.

beneficiary (including California residents),

to each activity reported on line 5 though

a completed Form 592-B. The fiduciary and

line 8. Itemize the beneficiary’s share of the

Internet

beneficiaries must attach Form 592-B to the

amortization deductions directly apportioned to

You can download, view, and print California

front of their California tax return to claim the

each activity on line 5 through line 8. For more

tax forms and publications from our website at

withholding amounts. Schedule K-1 (541) may

information, see the federal instructions for

ftb.ca.gov.

not be used to claim the withholding credit.

Schedule K-1 (1041).

Line 3c – Enter taxes paid to other states

Specific Line Instructions

Line a through Line d – If this is the final

reported on Schedule S, Other State Tax Credit.

return, enter on line 11 the beneficiary’s share

When completing the California Schedule K-1

of any of the following:

Attach a copy of the return filed with the other

(541) refer to the Federal/State Line References

state, evidence of payment, and a copy of

• Excess deductions on termination (follow

chart on page 3 that shows the specific line

Schedule S to verify the amount of tax paid.

the instructions for federal Form 1041)

instructions between the federal Schedule K-1

• Capital loss carryover

Line 3d – Enter on an attached schedule each

(541) and the California Schedule K-1 (541).

• Unused net operating loss (NOL) carryover

beneficiary’s allocable share of any credit or

The estate or trust is required to request and

for both regular and alternative minimum

credit information that is related to a trade or

provide a proper identification number for each

tax, if the NOL carryover would be allowed

business activity.

beneficiary. Enter the beneficiary’s number on

to the estate or trust in a later year but for

Line 4a – Enter tax-exempt interest received

the respective Schedule K-1 (541) when the

termination

by the estate or trust (including exempt-interest

estate or trust files Form 541.

Note: No deduction is allowed for estate taxes.

dividends received as a shareholder in a mutual

Individuals and business beneficiaries are

fund or other regulated investment company).

Net Operating Loss (NOL)

responsible for giving the estate or trust their

For more information, get form FTB 3805V, Net

Line 4d – Enter any other item that is not

social security number or Individual Taxpayer

Operating Loss (NOL) Computation and NOL

included:

Identification Number (ITIN), California

and Disaster Loss Limitations – Individuals,

corporation number, Secretary of State (SOS)

The estate or trust may need to report

Estates, and Trusts.

file number, or federal employer identification

supplemental information that is not

number (FEIN) upon request.

Line a – Enter the beneficiaries share of

specifically requested on the Schedule K-1

the adjustment for minimum tax purposes.

(541) separately to each beneficiary.

The estate or trust may use federal Form W-9,

To figure the adjustment, subtract the

Request for Taxpayer Identification Number

If the estate or trust is claiming tax benefits

beneficiary’s share of the income distribution

and Certificate, to request the beneficiary’s

from an Enterprise Zone (EZ), Los Angeles

deduction figured on Form 541, Schedule B,

identifying number.

Revitalization Zone (LARZ), Local Agency

line 15, from the beneficiary’s share of the

Military Base Recovery Area (LAMBRA),

Columns (b), (c), (d), and (e)

income distribution deduction on an alternative

Manufacturing Enhancement Area (MEA), or

In column (b), the amounts entered are from

minimum tax basis figured on Schedule P

Targeted Tax Area (TTA), it should give the

your federal Schedule K-1 (1041).

(541), Alternative Minimum Tax and Credit

beneficiaries their distributive share of the

Limitations – Fiduciaries, Part II, line 15. The

In column (c), the amounts entered are

business income and business capital gain or

difference is the beneficiary’s share of the

the adjustments resulting from differences

loss apportioned to the EZ, LARZ, LAMBRA,

adjustment for minimum tax purposes.

between California and federal law for each

MEA, or TTA on this line.

specific line item.

Page Schedule K-1 (541) 2008

Instructions For Schedule K-1 (541) Draft - Beneficiary'S Share Of Income, Deductions, Credits, Etc. - 2008 Page 2

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