Instructions For Form 541 - California Fiduciary Income Tax Return - 2013


2013 Instructions for Form 541
California Fiduciary Income Tax Return
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
General Information
statute of limitations is four years from the
due date of the return or from the date filed,
whichever, is later. However, the statute is
e-filing – The Franchise Tax Board (FTB) offers
A Important Information
extended in situations in which an individual or a
e-filing for fiduciaries filing Form 541, California
business entity is under examination by the IRS.
Fiduciary Income Tax Return, for taxable years
In general, for taxable years beginning on or after
beginning on or after January 1, 2013. Check
January 1, 2010, California law conforms to the
The FTB recommends keeping copies of returns
with the software provider to see if they support
Internal Revenue Code (IRC) as of January 1,
and records that verify income, deductions,
fiduciary (estate or trust) e-filing.
2009. However, there are continuing differences
adjustments, or credits reported, for at least
between California and federal law. When
the minimum time required under the statute of
New Voluntary Contributions – You may
California conforms to federal tax law changes,
limitations. However, some records should be
contribute to the following new funds:
we do not always adopt all of the changes
kept much longer.
• Protect Our Coast and Oceans Fund
made at the federal level. For more information,
Fiduciaries may be required to produce
• Keep Arts in Schools Fund
go to and search for conformity.
• American Red Cross, California Chapters Fund
documentation substantiating the claimed basis
Additional information can be found in FTB
of any assets sold, exchanged, transferred, or
Net Operating Loss (NOL) Carryback – NOLs
Pub. 1001, Supplemental Guidelines to California
distributed regardless of the original acquisition
incurred in taxable years beginning on or after
Adjustments, the instructions for California
January 1, 2013, shall be carried back to each of
Schedule CA (540 or 540NR), and the Business
Tax Shelter
the preceding two taxable years.
Entity tax booklets.
If the fiduciary was involved in a reportable
The allowable NOL carryback percentage varies.
For updates regarding federal acts go to ftb.
transaction, including a listed transaction, the
For an NOL incurred in a taxable year beginning and search for conformity.
fiduciary may have a disclosure requirement.
on or after:
The instructions provided with California tax
Attach the federal Form 8886, Reportable
• January 1, 2013, and before January 1, 2014,
forms are a summary of California tax law and are
Transaction Disclosure Statement, to the back
the carryback amount shall not exceed 50% of
only intended to aid taxpayers in preparing their
of the California return along with any other
the NOL.
state income tax returns. We include information
supporting schedules. If this is the first time
• January 1, 2014, and before January 1, 2015,
that is most useful to the greatest number of
the reportable transaction is disclosed on the
the carryback amount shall not exceed 75% of
taxpayers in the limited space available. It is
tax return, send a duplicate copy of the federal
the NOL.
not possible to include all requirements of the
Form 8886 to the address below. The FTB may
• January 1, 2015, the carryback amount shall
California Revenue and Taxation Code (R&TC) in
impose penalties if the trust fails to file federal
be 100% of the NOL.
the tax booklets. Taxpayers should not consider
Form 8886, or any other required information.
the tax booklets as authoritative law.
Individuals, Estates, and Trusts compute the
NOL carryback in Part IV of form FTB 3805V, Net
Backup Withholding – With certain limited
ATSU 398 MS F385
Operating Loss (NOL) Computation and NOL and
exceptions, payers that are required to withhold
Disaster Loss Limitations — Individuals, Estates,
and remit backup withholding to the Internal
PO BOX 1673
and Trusts. For more information, get form
Revenue Service (IRS) are also required to
SACRAMENTO CA 95812-9900
FTB 3805V.
withhold and remit to the FTB on income sourced
For more information, go to and
to California. If the estate or trust (payee) has
Election to Waive Carryback – Any taxpayer
search for tax shelter.
backup withholding, the estate or trust (payee)
entitled to a carryback period pursuant to Internal
Claim of Right
must contact the FTB to provide a valid taxpayer
Revenue Code (IRC) Section 172(b)(3) may elect
If the fiduciary had to repay an amount that was
identification number, before filing the tax return.
to relinquish/waive the entire carryback period
included in income in an earlier year, under a
Failure to provide a valid taxpayer identification
with respect to an NOL incurred in the 2013
claim of right, the fiduciary may be able to deduct
number may result in a denial of the backup
taxable year. By making the election, the taxpayer
the amount repaid from its income for the year in
withholding credit. For more information, go to
is electing to carry an NOL forward instead of
which it was repaid. Or, if the amount the fiduciary and search for backup withholding.
carrying it back in the previous two years.
repaid is more than $3,000, the fiduciary may be
To make the election, check the box in Part I
Nonresident Group Tax Returns
able to take a credit against its tax for the year in
under Section C – Election to Waive Carryback,
A corporation may file a group nonresident tax
which it was repaid. For more information, see the
of form FTB 3805V, and attach form FTB 3805V
return on behalf of certain electing nonresident
Repayments section of federal Publication 525,
to the tax return. For more information, get form
individuals who receive wages, salaries, fees,
Taxable and Nontaxable Income.
FTB 3805V.
or other compensation from that corporation
Punitive Damage Awards
for director services performed in California,
Elimination of Tax Clearance Requirement –
For court actions filed after August 16, 2004,
including attendance of board of directors’
Effective on or after January 1, 2014, California
and the final determination rendered by
meetings in California. Get FTB Pub. 1067,
no longer requires any estate to obtain a Tax
June 30, 2006, the tax treatment of punitive
Guidelines for Filing a Group Form 540NR, for
Clearance Certificate.
damages differs between federal and state. For
more information.
Single-Sales Factor Formula – For taxable years
California purposes, the amount of punitive
Access by Internet
beginning on or after January 1, 2013, Revenue
damages paid to the director of the Department
You can download, view, and print California tax
and Taxation Code (R&TC) Section 25128.7
of Finance shall be excluded from income and the
forms and publications at
requires all business income of an apportioning
attorney fees associated with the amount paid are
trade or business, other than an apportioning
not deductible.
California Tax Service Center
trade or business under R&TC Section 25128(b),
For additional business tax information, go to
B Purpose
to apportion its business income to California This website is sponsored by the
using the single sales factor formula. For more
Board of Equalization (BOE), the Employment
Use Form 541, California Fiduciary Income Tax
information, get Schedule R, Apportionment and
Development Department (EDD), the FTB, and
Return, if any of the following apply to report:
Allocation of Income, or go to and
the IRS.
search for law changes.
• Income received by an estate or trust
State Agencies Websites
• Income that is accumulated or currently
Market Assignment – For taxable years beginning
Access other California state agency websites
distributed to the beneficiaries
on or after January 1, 2013, R&TC Section 25136
• An applicable tax liability of the estate or trust
requires all taxpayers to assign sales, other than
• File an amended tax return for the estate or
Providing California and Federal Returns
sales of tangible personal property, using market
The FTB may request a copy of California or
assignment. For more information, get Schedule R
federal returns that are subject to or related to
or go to and search for law changes.
a federal examination. Generally, the California
Page 2 Form 541 Booklet 2013


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