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Refigure the depreciation as follows:

between the gain or loss reported for regular

Refigure all gains and losses reported for regular

tax and the recomputed gain or loss. If the

tax purposes from tax shelter farm activities using

• For property other than real property and

recomputed gain is less, or the loss is more, enter

the AMT adjustments and tax preference items.

property on which the straight‑line method

the difference as a negative amount. Otherwise,

was used, use the 150% declining balance

Figure the tax shelter farm activity gain or loss for

enter a positive amount.

method, switching to straight‑line for the first

AMT using the same rules the corporation used

taxable year in which that method will give a

Line 2e – Long-term contracts entered into after

for regular tax except:

higher depreciation deduction. Use the same

February 28, 1986

• Do not take any refigured loss unless

life classes as used on the federal Form 4626,

If the corporation entered into a long‑term

the corporation is insolvent. For more

Alternative Minimum Tax — Corporations.

contract after February 28, 1986, determine

information, see IRC Section 58(c)(1).

• For personal property having no asset

the taxable income from the contract under the

• Do not offset gains from other tax shelter

depreciation range (ADR) class life, use

percentage of completion method of accounting

activities with any refigured loss.

12 years.

as modified by IRC Section 460(b) and R&TC

Instead, suspend and carry over the loss to future

• For residential rental and nonresidential real

Section 24673.2 using AMT adjustments and tax

taxable years until one of the following applies:

property, use the straight‑line method over

preference items.

• The corporation has a gain in a future taxable

40 years.

Determine the difference between that result and

year from that same tax shelter farm activity.

Determine the depreciation adjustment by

the amount determined for the contract in figuring

• The corporation disposes of the activity.

subtracting the recomputed depreciation from

the regular tax and enter the difference on this

Enter on this line the difference between the

the California depreciation on form FTB 3885,

line. If the refigured taxable income is less than

Corporation Depreciation and Amortization. Enter

the result when determining the regular tax, enter

AMT tax shelter farm activity gain or loss and the

regular tax shelter farm activity gain or loss.

the difference on this line.

the difference as a negative amount.

Line 2h – Passive activities (closely held

If the corporation elected to depreciate a

California conforms to IRC Section 460(b)(2).

corporations and personal service corporations

grapevine that was replanted in a vineyard as a

This section requires the taxpayer to “look‑back”

only)

result of phylloxera or Pierce’s disease infestation

to previous years during which the contract

over five years instead of 20 years for regular tax,

work for certain contracts were in progress. The

Caution: To avoid duplication, if the corporation

it must depreciate the grapevine over ten years

taxpayer must compute interest on the difference

included AMT adjustments or tax preference

for AMT.

between the tax that was actually paid and the

items on this line, do not include them on any

tax that would have been paid if the taxpayer had

other line of this schedule.

Depreciation that is capitalized to inventory under

known the actual contract prices and costs that

the uniform capitalization rules must be refigured

For AMT purposes, complete a second form

would finally result.

using the rules described above.

FTB 3802, Corporate Passive Activity Loss and

Get form FTB 3834, Interest Computation Under

Credit Limitations, to figure the adjustments.

Include on line 2a any differences between regular

the Look‑Back Method for Completed Long‑Term

Corporations may enter two kinds of adjustments

and AMT depreciation (e.g., IRC Section 179

Contracts, to figure the interest due or to be

on this line:

depreciation differences).

refunded under the “look‑back method.”

Line 2b – Amortization of certified pollution

Regular Passive Activities. Refigure passive

Line 2f – Installment sales of certain property

activity gains and losses for AMT by taking into

control facilities placed in service after 1986

For regular tax purposes, corporations may

account all AMT adjustments, tax preference

For any certified pollution control facility placed

use the installment method of accounting for

items and AMT prior year unallowed losses that

in service in California after 1986 and before

sales of certain property. For AMT, corporations

apply to the passive activity.

1999, the five‑year depreciation method available

may not determine income from dispositions

for such facilities for regular tax purposes must

Tax Shelter Farm Activities That Are Passive

of inventory or other property described in IRC

be replaced for AMT purposes by the alternative

Activities. Refigure any gain or loss from a tax

Section 1221(a)(1) using the installment method,

depreciation system (ADS) specified under IRC

shelter farm activity that is a passive activity by

except for certain dispositions of timeshares or

Section 168(g) (straight‑line method, without

taking into account all AMT adjustments, tax

residential lots, if the corporation elected to pay

regard to salvage value). A facility placed in

preference items, and AMT prior year unallowed

interest under IRC Section 453(l)(2)(B) (R&TC

service after December 31, 1998 is depreciated

losses. If the amount is a gain, it may be included

Section 24667).

using the IRC Section 168 straight‑line method.

on form FTB 3802 and it may be used to offset

For more information, see IRC Section 56(a)(5).

If the corporation used the installment method for

AMT losses from other passive activities.

regular tax purposes, but was required for AMT

However, if it is a loss, it must be suspended and

Line 2c – Amortization of mining exploration

purposes to report the entire gain in the year of

carried forward indefinitely until the corporation

and development costs incurred after 1987

disposition, the corporation may have adjustments

If the corporation elected the optional ten‑year

has a gain in a subsequent year from that same

with respect to those dispositions. Enter on this

activity or it disposes of the activity. The AMT loss

write‑off under IRC Section 59(e) for all assets in

line as a negative amount the current year income

carryover is the refigured AMT loss.

this category, skip this line.

the corporation reported for regular tax.

If, at the end of the taxable year, the corporation’s

With respect to each mine or other natural

Farmers that received payments for a taxable

liabilities exceed the fair market value of the

deposit, (other than an oil, gas, or geothermal

year beginning on or after January 1, 1997, for

corporation’s assets (insolvency), increase the

well) refigure the expenses before the 30%

qualified installment sales made in taxable years

passive activity loss allowed by that excess

reduction under IRC Section 291(b) by

beginning on or after January 1, 1988, do not

amortizing them over ten years beginning with

(but not more than the total loss). For more

need to make an adjustment on this line.

information, see IRC Section 58(c)(1).

the year in which the expenses were paid or

incurred. Figure the adjustment by subtracting

Line 2g – Tax shelter farm activities (personal

Line 2i – Certain loss limitations

service corporations only)

the refigured amount from the deduction taken

Refigure the allowable losses from at‑risk activities

under IRC Section 616(a) or 617(a) after the 30%

and basis limitations applicable to partnerships,

Caution: To avoid duplication, if the corporation

reduction. Enter the amount on this line. If a loss

included AMT adjustments or tax preference

taking into account the AMT adjustments and tax

resulted with respect to those expenses, see IRC

preference items. See IRC Sections 59(h), 465,

items on this line, do not include them on any

Section 56(a)(2)(B), for more information.

and 704(d). If the refigured loss is more than the

other line of this schedule.

loss reported for purposes of the regular tax, enter

Line 2d – Basis adjustments in determining gain

Complete this line only if the corporation has a gain

on this line as a negative amount the difference

or loss from sale or exchange of property

or loss from a tax shelter farm activity, as defined in

If the corporation disposed of property during

between the loss reported on the tax return for

IRC Section 58(a)(2), that is not a passive activity.

purposes of the regular tax and the refigured loss.

the year, refigure the gain or loss from such

If the tax shelter farm activity is a passive activity,

sale taking into account the AMT adjustments

the corporation must include the gain or loss with

on line 2a through line 2c. Enter the difference

its other passive activities on line 2h.

Page 32 Form 100W Booklet 2013

Instructions For Schedule P (100w) - Alternative Minimum Tax And Credit Limitations-Water'S-Edge Filers - 2013 Page 2

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