California Form 3580 - Application And Election To Amortize Certified Pollution Control Facility - 2016 Page 2
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22016 Instructions for Form FTB 3580
Application and Election to Amortize Certified Pollution Control Facility
References in these instructions are to the Internal Revenue Code (IRC) as of January 1, 2015, and to the California Revenue and Taxation Code (R&TC).
General Information
1. You must have completed construction, reconstruction, or erection
of the property after December 31, 1968. However, if the treatment
A
Purpose
facility is used in connection with any plant or other property not
in operation before January 1, 1969, you must have completed the
Use form FTB 3580, Application and Election to Amortize Certified
construction, reconstruction, or erection of the treatment facility
Pollution Control Facility, to request certification of a pollution control
property after December 31, 1975.
facility placed in service in California, and to elect to amortize the
2. You must have acquired the property after December 31, 1968, if the
basis over a period of 60 months. This election follows the provisions
original use of the property begins with you after this date.
of the Internal Revenue Code (IRC) Section 169 and the California
Original use – means the first use to which the property is put, whether
Revenue and Taxation Code (R&TC) Sections 17250(b) and 24372.3,
or not the use corresponds to your current use of the property.
which are subject to the rules relating to corporate preferences of
IRC Sections 291(a)(4) and 1363(b)(4), and R&TC Sections 24449
C
Amortization Period
and 23800. The amortizable basis for this purpose may be limited. See
At your election, the 60-month amortization period begins with the
definition of amortizable basis below.
month following the date in which you completed or acquired the facility.
The certified pollution control facility amortization deduction is in lieu of
For C corporations that elect to amortize during the first three taxable
otherwise allowable depreciation.
years following the conversion of a C corporation to an S corporation,
B
Definitions
only 80% of the adjusted basis of the certified pollution control facilities
may be amortized over 60 months. Accordingly, for corporations the
Adjusted basis – includes the cost of purchase and installation or, if the
amortizable basis of certified pollution control facilities for which a
facility is fabricated by you, the cost of labor and materials.
rapid amortization election is made must be reduced by 20% (see
If the useful life of the facility is more than 15 years, you must reduce
IRC Sections 291(a)(4) and 1363(b)(4), and R&TC Sections 24449
the adjusted basis of the facility to an amount that is in the same ratio
and 23800 ).
as 15 years is to the facility’s total years of useful life.
D
Election and Certification
For example: If the adjusted basis of the facility is $500,000 and its
useful life is 20 years, then compute the amortizable basis as follows:
Make the election to amortize the amortizable basis of a certified
pollution control facility by completing Part I and Part II of
$500,000 x 15 = $375,000
form FTB 3580. Then apply for certification as follows:
20
Air pollution. If this election applies to air pollution, apply for
certification from the State Air Resources Board. Mail the original and
The $375,000, if elected, will be amortized over 60 months. The
two copies of the completed form FTB 3580 to:
remaining adjusted basis of $125,000 ($500,000 less $375,000) may be
depreciated over 20 years, the useful life of the facility.
STATIONARY SOURCE DIVISION
ATTN: DIVISION CHIEF
You may not increase the basis elected to be amortized by the cost of
STATE AIR RESOURCES BOARD
additions or improvements after the amortization period begins.
PO BOX 2815
Amortizable basis – the portion of the adjusted basis that may be
SACRAMENTO CA 95812-2815
amortized, for determining gain, of a certified pollution control facility.
Telephone: 916.322.6026
Certified pollution control facility – a new identifiable treatment
The State Air Resources Board will add its certification to Part III if the
facility located in California and used, in connection with a plant
facility meets the law requirements. They will return the original and one
or other property in operation before January 1, 1976, to abate or
copy of form FTB 3580 to you. Attach the original to the first tax return
control water or atmospheric pollution or contamination by removing,
you file with the Franchise Tax Board (FTB) on which you deduct the
altering, disposing, storing, or preventing the creation or emission of
amortization. Keep the copy for your records.
pollutants, contaminants, wastes, or heat.
Water pollution. If this election applies to water pollution, apply for
The facility must not significantly:
certification from the State Water Resources Control Board. Mail the
y Increase the output or capacity, extend the useful life, or reduce the
original and two copies of the completed form FTB 3580 to:
total operating costs of such plant or other property.
DIVISION OF WATER QUALITY
y Alter the nature of the manufacturing or production process, or
ATTN: DEPUTY DIRECTOR
facility.
STATE WATER RESOURCES CONTROL BOARD
The State Air Resources Board (air pollution) or the State Water
PO BOX 100
Resources Control Board (water pollution) must certify that the pollution
SACRAMENTO CA 95812-0100
control facility conforms with the state program or requirements
Telephone: 916.341.5700
for abatement or control of water, or atmospheric pollution or
The State Water Resources Control Board will add its certification to Part
contamination.
III if the facility meets the law requirements. They will return the original
New identifiable treatment facility – tangible property, not including a
and one copy of form FTB 3580 to you. Attach the original to the first tax
building and its structural components unless the building is exclusively
return you file with the FTB on which you deduct the amortization. Keep
a treatment facility, which is subject to an allowance for depreciation
the copy for your records.
as provided in IRC Section 167. It must be identifiable as a treatment
facility, and must meet one of the following two conditions:
Page 2 FTB 3580 Instructions 2016
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