Instructions For Schedule D-1 - Sales Of Business Property

• Add depreciation or depletion allowed or

Line 29f – Refer to the instructions for

Column (b) – Enter the recovery deductions that

allowable, amortization or Accelerated Cost

federal Form 4797, line 26f. California law

would have been allowed if the property had not

Recovery System (ACRS) deductions if it is

generally follows IRC Section 291 except IRC

been predominantly used in a qualified business.

recovery property.

Sections 291(a)(3) and 291(b)(1) have been

Figure the deductions from the year it was placed

• Add the IRC Section 179 expense and R&TC

modified. Enter the ordinary income amount

in service to the current year.

Sections 17267.2, 17267.6, 17268, 24356.6,

computed according to the federal instructions

Line 38 – If the recapture amount on your federal

24356.7, and 24356.8 expenses deducted.

using California figures.

Form 4797, Part IV, line 35, is different from the

• Subtract any IRC Sections 179 and 280F

recapture amount on Schedule D-1, line 38, an

IRC Section 1252 Property

recapture amount included in gross income

adjustment is required on your California tax

in a prior taxable year because the business

Partnerships, skip line 30a through line 30c.

return as follows:

use of the property dropped to 50% or less.

Partners should enter on the applicable lines of

Individuals: Figure the difference between

Also, subtract any R&TC Sections 17267.2,

Part III amounts subject to IRC Section 1252

the federal amount and the California amount,

17267.6, 17268, 24356.6, 24356.7, and

according to instructions from the partnership.

and enter on the line for reporting the type of

24356.8 recapture amount included in gross

You may have ordinary income on the disposition

business income that resulted in the recapture on

income in a prior taxable year because the

of certain farm land held more than one year but

Schedule CA (540 or 540NR) as follows:

property ceased to be qualified property.

less than 10 years.

• If the federal amount is more than the

Use the amount claimed on your California tax

Gain from disposition of certain farm land is

California amount, enter the difference on

return under R&TC Section 17201 when adding

subject to ordinary income rules under IRC

Schedule CA, column B.

or subtracting IRC Section 179 expense.

Section 1252 before being considered under IRC

• If the California amount is more than the

You may have to include depreciation allowed

Section 1231 (Part I).

f ederal amount, enter the difference on

or allowable on another asset (and recompute

Line 30b – Enter 100% of line 30a on line 30b if

Schedule CA, column C.

the basis amount for line 24) if you use its

your property was held for 10 years or longer. If

Corporations: Form 100 or Form 100W, line 8,

adjusted basis in determining the adjusted

your property was held for less than 10 years, use

other additions; or line 16, other deductions for

basis of the property described on line 22. An

the same percentage required by federal law.

the difference between California and federal

example is property acquired by a trade-in. (See

recapture amounts.

Part IV

Section 1.1245-2(a)(4) of the federal regulations.)

S corporations: Form 100S, line 7, other

Complete column (a) of line 36 through line 38

Partnerships, LLCs, and S corporations that sell,

additions; or line 13, other deductions for

of Part IV to figure the amount to be recaptured if

exchange, or otherwise dispose of property for

the difference between California and federal

the following apply:

which an IRC Section 179 expense deduction

recapture amounts. Also, Schedules K (100S) and

was previously passed through to the partners,

• You took a deduction under IRC Section 179

K-1 (100S), line 10b or line 12e.

members, or S corporation shareholders, see the

for property placed in service on or after

instructions under General Information B, Special

Partnerships or Limited Liability Companies:

January 1, 1987 [other than listed property, as

Rules.

Schedules K (565 or 568) and K-1 (565 or 568),

defined in IRC Section 280F (d)(4)]; and

lines 11b and 11c or line 13e.

• The property was not used predominantly in

In all other cases, partnerships and LLCs should

your trade or business at any time; or

enter the depreciation or depletion allowed or

• You took a deduction under R&TC

allowable or amortization on line 25. Enter any

Section 17267.2, 17267.6, 17268, 24356.6,

IRC Section 179 and R&TC Sections 17267.2,

24356.7, or 24356.8; and

17267.6, and 17268 expenses on Schedule K-1

• That property ceased to be qualified property

(565 or 568), line 12.

before the close of the second taxable year

In all other cases, S corporations should enter the

after it was placed in service.

depreciation or depletion allowed or allowable,

IRC Section 280F Property. If you have listed

amortization, ACRS or Modified Accelerated

property that you placed in service in a prior year

Cost Recovery System (MACRS) deductions on

and the business use dropped to 50% or less

line 25. Enter any IRC Section 179 and R&TC

this year, figure the amount to be recaptured.

Sections 17267.2, 17267.6, and 17268 expenses

Complete column (b), line 36 through line 38, of

on Schedule K-1 (100S), line 11.

Part IV.

IRC Section 1245 Property

If you have more than one property subject to the

California law generally is the same as federal

recapture rules, use separate statements to figure

law. See federal Form 4797 for examples of IRC

the recapture amounts for each property and

Section 1245 property.

attach the statements to your tax return.

IRC Section 1250 Property

Line 36, Column (a) – Enter the IRC Section 179

California law generally is the same as federal

expense claimed on your California tax return

law except for certain modifications to IRC

under R&TC Section 17201, and R&TC

Section 1250(b). See R&TC Section 18171.

Sections 17267.2, 17267.6, 17268, 24356.6,

24356.7, and 24356.8 expenses that were

Line 29a – Enter the additional depreciation for

deducted when the property was placed in

the period after December 31, 1976. For IRC

service.

Section 1250 property held more than one year,

additional depreciation is the excess of actual

Column (b) – Enter the recovery deductions

depreciation over depreciation figured using

allowable on the property in prior tax years. Any

the straight-line method. For IRC Section 1250

deduction allowable under IRC Section 179 on

property held one year or less, all depreciation is

that property is treated as if that deduction was a

additional depreciation.

recovery deduction under IRC Section 168.

Line 29b – Use 100% as the percentage for this

Line 37, Column (a) – Enter the depreciation

line unless you have low-income rental property

allowable on the IRC Section 179 amount

described in IRC Section 1250(a)(1)(B).

from the time it was placed in service (on

or after January 1, 1987), or under R&TC

Line 29d – Enter the additional depreciation after

Sections 17267.2, 17267.6, 17268, 24356.6,

December 31, 1970 and before January 1, 1977.

24356.7, and 24356.8 from the time the property

If the straight-line depreciation is more than the

was placed in service to the current year.

additional depreciation after December 31, 1970

and before January 1, 1977, reduce line 29a by the

excess amount, but not below zero.

Schedule D-1 Instructions 2013 Page 3

Instructions For Schedule D-1 - Sales Of Business Property - 2013 Page 3

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