Form 3885p - Depreciation And Amortization - 2011 Page 2

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• The additional first-year depreciation of certain qualified property placed

Line 4 – California amortization for intangibles placed in service before

in service after October 3, 2008, and the election to claim additional

January 1, 2011

research and minimum tax credits in lieu of claiming the bonus

Enter total California amortization for intangibles placed in service prior

depreciation.

to January 1, 2011, taking into account any differences in asset basis or

differences in California and federal tax law.

Additional differences may occur for the following:

Assets with a Federal Basis Different from California Basis

• Luxury Automobile Depreciation: California generally conforms to the

federal 2003 increase (IRC Section 280F) for the limitation on luxury

Some assets placed in service on or after January 1, 1987, will have a

automobile depreciation. In addition, SUVs and minivans built on a truck

different adjusted basis for California purposes due to the credits claimed

chassis are included in the definition of trucks and vans when applying

or accelerated write-offs of the assets. Review the list of depreciation and

the 6,000 pound gross weight limit.

amortization items in the instructions for Schedule CA (540), California

Adjustments — Residents, and Schedule CA (540NR), California

• Amortization of Certain Intangibles (IRC Section 197): Property

Adjustments — Nonresidents or Part-Year Residents. If the partnership has

classified as Section 197 property under federal law is also Section 197

any other adjustments to make, get FTB Pub. 1001, Supplemental Guidelines

property for California purposes. There is no separate California election

to California Adjustments, for more information.

required or allowed. However, for Section 197 property acquired before

January 1, 1994, the California adjusted basis as of January 1, 1994,

Line 6 – Total Depreciation and Amortization

must be amortized over the remaining federal amortization period.

Add line 3 and line 5. Enter the total on line 6 and on Form 565, Side 1,

• Qualified Indian reservation property: California has not conformed

line 17a.

to the accelerated recovery periods available under the Alternative

If depreciation or amortization is from more than one trade or business

Depreciation System (ADS) for such property.

activity, or from more than one rental real estate activity, the partnership

• Grapevines subject to Phylloxera or Pierce’s Disease: For California

should separately compute depreciation for each activity. Use the

purposes, replacement grapevines may be depreciated using a recovery

depreciation computed on this form to identify the net income for each

period of five years instead of ten years.

activity. Report the net income from each activity on an attachment to

Schedule K-1 (565), Partner’s Share of Income, Deductions, Credits, etc.,

This list is not intended to be all-inclusive of the federal and state differences.

for purposes of passive activity reporting requirements. Use California

For additional information, please refer to California’s R&TC.

amounts to determine the depreciation amount to enter on line 14 of federal

Specific Line Instructions

Form 8825, Rental Real Estate Income and Expenses of a Partnership or an

S Corporation.

Line 1 – California depreciation for assets and amortization for intangibles

Line 7

placed in service during the current taxable year.

Enter the IRC Section 179 expense election amount from line 12 of the

Complete column (a) through column (i) for each asset or group of assets or

following worksheet.

property placed in service during the current taxable year. Enter the column

(f) totals on line 1(f). Enter the column (i) totals on line 1(i).

These limitations apply to the partnership and each partner.

Line 2 – California depreciation for assets placed in service before

January 1, 2011

Enter total California depreciation for assets placed in service prior to

January 1, 2011, taking into account any differences in asset basis or

differences in California and federal tax law.

Election to Expense Certain Tangible Property (IRC Section 179) Worksheet

Follow the instructions on federal Form 4562, Depreciation and Amortization, for listed property.

$ 25,000

1 Maximum dollar limitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

2 Total cost of IRC Section 179 property placed in service during the taxable year. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 __________________

$200,000

3 Threshold cost of IRC Section 179 property placed in service during the taxable year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3

4 Reduction in limitation. Subtract line 3 from line 2. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4 __________________

5 Dollar limitation for taxable year. Subtract line 4 from line 1. If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 __________________

(a)

(b)

(c)

Description of property

Cost

Elected cost

7 Listed property. Use federal Form 4562, Part V, line 29. Make any adjustments for California law and basis differences . . . . . . . . 7 __________________

8 Total elected cost of IRC Section 179 property. Add amounts in column (c), line 6 and line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 __________________

9 Tentative deduction. Enter the smaller of line 5 or line 8 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 __________________

10 Carryover of disallowed deduction from 2010. See instructions for line 10 through line 13 on federal Form 4562 . . . . . . . . . . . . . 10 __________________

11 Income limitation. Enter the smaller of line 5 or the aggregate of the partnership’s items of income and expense

described in IRC Section 702(a) from any business actively conducted by the partnership, other than credits,

tax-exempt IRC Section 179 expense deduction, and guaranteed payments under IRC Section 707(c). . . . . . . . . . . . . . . . . . . . . . 11 __________________

12 IRC Section 179 expense deduction. Add line 9 and line 10, but do not enter more than line 11. Enter on

Schedule K (565), line 12 and on form FTB 3885P, line 7. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12 __________________

13 Carryover of disallowed deduction to 2012. Add line 9 and line 10 and subtract line 12. Enter here and on line 8

of form FTB 3885P . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13 __________________

Page 2 FTB 3885P Instructions 2011