Form 3526 - California Investment Interest Expense Deduction - 2015

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TAXABLE YEAR
CALIFORNIA FORM
Investment Interest Expense Deduction
3526
2015
Attach to Form 540, Long Form 540NR, or Form 541.
Name(s) as shown on tax return
SSN, ITIN, or FEIN
00
1
Investment interest expense paid or accrued in 2015. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1
00
2
Disallowed investment interest expense from 2014 form FTB 3526, line 7. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . .
2
00
3
Total investment interest expense. Add line 1 and line 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
4a Gross income from property held for investment (excluding any net gain from the disposition of property held for
00
investment). See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4a
00
4b Net gain from the disposition of property held for investment. See instructions . . . . . . . . . . .4b
00
4c Net capital gain from the disposition of property held for investment. See instructions. . . . . .4c
00
4d Subtract line 4c from line 4b. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4d
4e Enter all or part of the amount on line 4c that you elect to include in investment income. Do not include more
00
than the amount on line 4b. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4e
00
4f Investment income. Add line 4a, line 4d, and line 4e . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .4f
00
5
Investment expenses. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
00
6
Net investment income. Subtract line 5 from line 4f. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
7
Disallowed investment interest expense to be carried forward to 2016. Subtract line 6 from line 3.
00
If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
7
8
Investment interest expense deduction. Enter the smaller of line 3 or line 6. Form 541 filers, stop here and
00
see instructions. All other filers, go to line 9 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
8
00
9
Enter the amount from federal Form 4952, line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
. . .
. 9
10
California investment interest expense deduction adjustment. Enter the difference between line 8 and line 9.
00
See instructions.. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
10
General Information
Specific Line Instructions
Net capital gain from the disposition of property
held for investment is excluded from investment
In general, for taxable years beginning on or
Generally, California law for the investment
income when figuring the investment interest
after January 1, 2015, California law conforms
interest expense deduction follows federal law. Get
limitation. However, taxpayers may elect to
to the Internal Revenue Code (IRC) as of
the instructions for federal Form 4952, Investment
include in their investment income as much of
January 1, 2015. However, there are continuing
Interest Expense Deduction, for more information.
their net capital gain investment income as they
differences between California and federal law.
Get federal Publication 550, Investment Income
choose, if they also reduce the amount of net
When California conforms to federal tax law
and Expenses, to determine your investment
capital gain eligible for the special federal capital
changes, we do not always adopt all of the
interest expense deduction if you have interest
gain tax rate.
changes made at the federal level. For more
income or expense attributable to a working
This form allows you to make a separate
information, go to ftb.ca.gov and search for
interest in oil or gas property or if you paid or
California election to include net capital gain
conformity. Additional information can be found
accrued interest on a loan and you used the
investment income in the calculation of the
in FTB Pub. 1001, Supplemental Guidelines
proceeds of the loan for more than one purpose.
investment interest limitation. However, California
to California Adjustments, the instructions for
Line 1 – Investment Interest Expense
taxes all income at the same rate. Consider the
California Schedule CA (540 or 540NR), California
effect on your California tax before making a
Enter the investment interest paid or accrued
Adjustments, and the Business Entity tax
separate California election or applying the federal
during the taxable year, regardless of when you
booklets.
election for California purposes.
incurred the indebtedness. Investment interest
The instructions provided with California tax
expense is interest paid or accrued on a loan (or
B Who Must File
forms are a summary of California tax law and are
part of a loan) that is allocable to property held for
only intended to aid taxpayers in preparing their
investment.
If you are an individual, estate, or trust and you
state income tax returns. We include information
Include investment interest expense reported to
claim a deduction for investment interest expense,
that is most useful to the greatest number of
you on Schedules K-1 (100S, 541, 565, or 568),
you must complete and attach form FTB 3526 to
taxpayers in the limited space available. It is
your tax return.
Share of Income, Deductions, Credits, etc. Include
not possible to include all requirements of the
amortization of bond premiums on taxable bonds
California Revenue and Taxation Code (R&TC) in
Exception: You do not have to file form FTB 3526
purchased after October 22, 1986, but before
the tax booklets. Taxpayers should not consider
if all of the following apply:
January 1, 1988, unless you elected to offset
the tax booklets as authoritative law.
• Your only investment income was from
amortizable bond premiums against the interest
interest or dividends.
A Purpose
payments on the bond. A taxable bond is a bond on
• You have no other deductible expenses
which the interest is includible in gross income.
connected with the production of interest or
Use form FTB 3526, Investment Interest Expense
dividends.
Investment interest expense does not include:
Deduction, to figure the amount of investment
• Qualified residence interest.
• Your investment interest expense is not more
interest expense deductible for the current year
• Interest expense that is properly allocable to a
than your investment income.
and the amount, if any, to carry forward to future
• You have no disallowed investment interest
passive activity. See “Passive Activities.”
years. Interest expense paid by an individual,
• Interest expense that is capitalized, such
expense from 2014.
estate, or trust on a loan allocable to property
as construction interest subject to IRC
held for investment may not be fully deductible in
Section 263A.
the current year.
FTB 3526 2015
7321153
For Privacy Notice, get FTB 1131 ENG/SP.

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