Instructions For Form Ftb 3834 - Interest Computation Under The Look-Back Method For Completed Long-Term Contracts - 2016 Page 3

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Net Adjustment
Contracts Completed in Taxable Years Ending
Line 9 and Line 10 – Individuals, estates, or
California law requires taxpayers to make
Before January 1, 2016
trusts, sign Side 2 and file form FTB 3834 as a
an adjustment to income upon completion
For contracts completed in taxable years
separate return. Do not attach it to Form 540,
of a contract to correct any underreporting
ending before January 1, 2016, the interest
Long Form 540NR, or Form 541. Mail form
or overreporting of income resulting from
rates to be compounded daily are:
FTB 3834 in an envelope separate from that of
differences between state and federal law for
your California tax return.
Period
Rate
the taxable year in which the contract began.
If you have a refund (line 9), mail form
July 1, 1989, through December 31, 1989 . . . . 12%
This adjustment may be necessary:
FTB 3834 to:
January 1, 1990, through June 30, 1991 . . . . . 11%
For a contract
During a
July 1, 1991, through June 30, 1992 . . . . . . . . 10%
FRANCHISE TAX BOARD
entered
taxable year
July 1, 1992, through December 31, 1992 . . . . . 9%
PO BOX 942840
into after:
beginning before:
January 1, 1993, through June 30, 1993 . . . . . . 8%
SACRAMENTO CA 94240-0001
February 28, 1986
January 1, 1987
July 1, 1993, through December 31, 1994 . . . . . 7%
If you owe interest (line 10) and are not paying
October 13, 1987
January 1, 1990
January 1, 1995, through June 30, 1995 . . . . . . 8%
electronically, make a check or money order,
June 20, 1988
January 1, 1990
July 1, 1995, through December 31, 1998 . . . . . 9%
using black or blue ink, payable to “Franchise
July 10, 1989
January 1, 1990
January 1, 1999, through June 30, 1999 . . . . . . 8%
Tax Board” for the full amount. Write your
For purposes of the look-back method, include
July 1, 1999, through December 31, 1999 . . . . . 7%
social security number or individual taxpayer
this adjustment amount in the amount entered
January 1, 2000, through December 31, 2000 . . 8%
identification number, the taxable year, and
on line 2 for the taxable year from which the
January 1, 2001, through December 31, 2001 . . 9%
“FTB 3834” on the check or money order.
adjustment arose. Attach a schedule showing
January 1, 2002, through June 30, 2002 . . . . . . 7%
Enclose, but do not staple, payment with form
your computation.
July 1, 2002, through June 30, 2003 . . . . . . . . . 6%
FTB 3834 and mail to:
July 1, 2003, through June 30, 2004 . . . . . . . . . 5%
Prepare the schedule in columns for the
July 1, 2004, through June 30, 2005 . . . . . . . . . 4%
FRANCHISE TAX BOARD
affected years so that the net adjustment
July 1, 2005, through December 31, 2005 . . . . . 5%
PO BOX 942867
shown in each column on the attached
January 1, 2006, through June 30, 2006 . . . . . . 6%
SACRAMENTO CA 94267-0001
schedule agrees with the amounts shown on
July 1, 2006, through December 31, 2006 . . . . . 7%
line 2.
Corporations, S corporations, exempt
January 1, 2007, through June 30, 2008 . . . . . . 8%
organizations, partnerships, and LLCs are not
Line 4 and Line 5 – Reduce the tax on line 4
July 1, 2008, through December 31, 2008 . . . . . 7%
required to sign form FTB 3834.
and line 5 (but not below the minimum
January 1, 2009, through June 30, 2009 . . . . . . 5%
franchise tax) by allowable credits (other than
Corporations (other than S corporations) may
July 1, 2009, through December 31, 2009 . . . . . 5%
refundable credits). Include any taxes (such as
deduct this amount as an interest expense for
January 1, 2010, through June 30, 2010 . . . . . . 4%
AMT) required to be taken into account in the
the taxable year in which it is paid or incurred.
July 1, 2010, through December 31, 2010 . . . . . 4%
computation of your tax liability determined as
This interest is not deductible for individuals
January 1, 2011, through June 30, 2011 . . . . . . 4%
of the latest of the following:
and other noncorporate taxpayers.
July 1, 2011, through December 31, 2011 . . . . . 3%
y The original due date.
January 1, 2012, through June 30, 2012 . . . . . . 4%
Corporations, S corporations, partnerships,
y The date of an amended or adjusted return.
July 1, 2012 to present . . . . . . . . . . . . . . . . . . . 3%
LLCs, and exempt organizations with unrelated
y The last previous application of the look-
business income, attach form FTB 3834 to
Corporate Overpayment Rates
back method.
their California tax return. Enter the amount
Use the chart below to compute corporate
due or the amount to be refunded on their tax
See Treas. Reg. Section 1.460-6(c)(3)(iii) for
overpayments. Beginning July 1, 2002, the
return as follows:
exceptions and further explanation.
interest allowed on corporate overpayments
differs from personal income tax
y Corporations, enter the amount due or
Line 7 and Line 8 – For an increase (or
overpayments.
the amount to be refunded on Form 100,
decrease) in tax for each prior year, interest
Schedule J or Form 100W, Schedule J.
due or to be refunded must be compounded on
Period
Corporate overpayment rate
y S corporations, enter the amount due or
a daily basis from the due date (not including
July 1, 2002, through June 30, 2003 . . . . . . . . . 2%
the amount to be refunded on Form 100S,
extensions) of the return for the prior year until
July 1, 2003, through June 30, 2005 . . . . . . . . . 1%
Schedule J.
the earlier of the following:
July 1, 2005, through December 31, 2005 . . . . . 2%
January 1, 2006, through June 30, 2006 . . . . . . 3%
y Partnerships, enter the amount due or
y The due date (not including extensions) of
July 1, 2006, through December 31, 2006 . . . . . 4%
the amount to be refunded on Form 565,
the return for the contract completion year.
January 1, 2007, through June 30, 2008 . . . . . . 5%
line 31 or line 32.
y The date the return for the contract
July 1, 2008, through December 31, 2008 . . . . . 3%
y LLCs, enter the amount due or the amount
completion year is filed and any tax due for
January 1, 2009, through June 30, 2009 . . . . . . 2%
to be refunded on Form 568, line 13 or
that year has been fully paid.
July 1, 2009, through December 31, 2011 . . . . . 0%
line 14.
January 1, 2012 to present . . . . . . . . . . . . . . . . . 0%
y Exempt corporations or other organizations
Contracts Completed in Taxable Years
with unrelated business income, enter the
Beginning On or After January 1, 2016
amount due or the amount to be refunded
For contracts completed in taxable years
on Form 109, Schedule K.
beginning on or after January 1, 2016, the
interest rate is determined for each interest
accrual period. The interest accrual period
starts on the day after the return due date (not
including extensions) for each prior taxable
year and ends on the return due date for the
following taxable year. Using the charts above,
the interest rate in effect for the entire interest
accrual period is the rate for the period in
which the interest accrual period begins.
FTB 3834 Instructions 2016 Page 3

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