Instructions For Schedule P (Form 541) - Alternative Minimum Tax And Credit Limitations - Fiduciaries - 2013


Instructions for Schedule P (541)
Alternative Minimum Tax and Credit Limitations – Fiduciaries
References in these instructions are to the Internal Revenue Code (IRC) as of January 1, 2009, and to the California Revenue and Taxation Code (R&TC).
What’s New
Any credits not used in the taxable year may be carried forward up to
eight years. For more information go to and search for new
Net Operating Loss (NOL) Carryback – NOLs incurred in taxable years
jobs or get form FTB 3527, New Jobs Credit.
beginning on or after January 1, 2013, shall be carried back to each of
the preceding two taxable years.
A Purpose
The allowable NOL carryback percentage varies. For an NOL incurred in
California tax law gives special treatment to some items of income
a taxable year beginning on or after:
and allows special deductions and credits for some items of expense.
• January 1, 2013, and before January 1, 2014, the carryback amount
Many taxpayers who benefit from these provisions must pay at least
shall not exceed 50% of the NOL.
a minimum amount of tax, the alternative minimum tax (AMT), and/or
• January 1, 2014, and before January 1, 2015, the carryback amount
limit the amount of their credits.
shall not exceed 75% of the NOL.
B Who Must File
• January 1, 2015, the carryback amount shall be 100% of the NOL.
Individuals, Estates, and Trusts compute the NOL carryback in Part IV of
Fiduciaries must use Schedule P (541), Alternative Minimum Tax and
form FTB 3805V, Net Operating Loss (NOL) Computation and NOL and
Credit Limitations – Fiduciaries, to figure the following:
Disaster Loss Limitations – Individuals, Estates, and Trusts. For more
• Income distribution deduction on an AMT basis
information, get form FTB 3805V.
• Estate’s or trust’s alternative minimum taxable income (AMTI)
Election to Waive Carryback – Any taxpayer entitled to a carryback period
• Estate’s or trust’s AMT
pursuant to Internal Revenue Code (IRC) Section 172(b)(3) may elect
Fiduciaries must also use Schedule P (541) if any of the following apply:
to relinquish/waive the entire carryback period with respect to an NOL
• Figure credits that must be limited by the tentative minimum tax
incurred in the 2013 taxable year. By making the election, the taxpayer
(TMT) (Part III, line 8)
is electing to carry an NOL forward instead of carrying it back in the
• Figure credits that may reduce the AMT (Part III, line 10)
previous two years.
• Claim more than one credit
To make the election, check the box in Part I under Section C - Election to
Every estate or trust that takes an income distribution deduction under
Waive Carryback, of form FTB 3805V, and attach form FTB 3805V to the
IRC Section 651 or Section 661 must complete Schedule P (541), Part I,
tax return. For more information, get form FTB 3805V.
to figure its AMTI, and Part II to figure the income distribution deduction
on an AMT basis. Part III should be completed only if the estate or trust
General Information
is liable for AMT (Part I, line 10 is more than $42,319) or is claiming
credits. In all instances, attach Schedule P (541) to Form 541, California
In general, for taxable years beginning on or after January 1, 2010,
Fiduciary Income Tax Return.
California law conforms to the Internal Revenue Code (IRC) as of
January 1, 2009. However, there are continuing differences between
C Recordkeeping
California and federal law. When California conforms to federal tax law
changes, we do not always adopt all of the changes made at the federal
For the AMT, certain items of income, deductions, etc., receive different
level. For more information, go to and search for conformity.
tax treatment than for the regular tax. Therefore, you need to refigure
Additional information can be found in FTB Pub. 1001, Supplemental
items for the AMT that you figured for the regular tax. In some cases,
Guidelines to California Adjustments, the instructions for California
you may wish to do this by completing the applicable tax form a second
Schedule CA (540 or 540NR), and the Business Entity tax booklets.
time. If you do complete another form, do not attach it to your tax
return, but keep it for your records.
The instructions provided with California tax forms are a summary of
California tax law and are only intended to aid taxpayers in preparing
For regular tax, some deductions may result in carryovers to future
their state income tax returns. We include information that is most
taxable years. Examples are investment interest expense, net operating
useful to the greatest number of taxpayers in the limited space available.
loss (NOL), and capital loss. Because you may have to refigure these
It is not possible to include all requirements of the California Revenue
items to determine AMT for the estate or trust, the carryover amount
and Taxation Code (R&TC) in the tax booklets. Taxpayers should not
may be different for AMT than for regular tax. Although the carryovers
consider the tax booklets as authoritative law.
that you figure for AMT do not affect the carryovers for regular tax,
you must keep track of the AMT carryovers in order to complete your
California Motion Picture and Television Production Credit – For
Schedule P (541) in future years.
taxable years beginning on or after January 1, 2011, a California motion
picture and television production credit is allowed to a qualified taxpayer.
D Partnerships, S Corporations, or Limited
The credit is allocated and certified by the California Film Commission
Liability Companies (LLCs)
(CFC). The qualified taxpayer can:
• Offset the credit against income tax liability.
If the estate or trust is a partner in a partnership, a shareholder of an
• Sell the credit to an unrelated party (independent films only).
S corporation, or a member of an LLC, you must take into account
• Assign the credit to an affiliated corporation.
the estate’s or trust’s distributive share of income and deductions that
• Apply the credit against qualified sales and use taxes.
enter into the computation of the estate’s or trust’s adjustments and tax
For more information, get form FTB 3541, California Motion Picture and
Television Production Credit, form FTB 3551, Sale of Credit Attributable to
If the estate or trust is a beneficiary of another estate or trust, you
an Independent Film, or go to and search for motion picture.
must include the adjustment for AMT shown on Schedule K-1 (541),
Beneficiary’s Share of Income, Deductions, Credits, etc., line 12a.
New Jobs Credit – For taxable years beginning on or after
January 1, 2009, and before January 1, 2014, a new jobs credit against
E Allocation of Deductions to Beneficiaries
the net tax is allowed for a qualified employer in the amount of $3,000
for each qualified full-time employee hired during the taxable year
The distributable net AMTI of the estate or trust does not include
that increases the employer’s number of full-time employees over the
amounts of depreciation, depletion, or amortization that are allocated
previous year. This is determined on an annual full-time equivalent basis.
to the beneficiaries, just as the distributable net income of the estate or
trust does not include these items for regular tax.
Schedule P (541) Instructions 2013 Page 1


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