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Rollover of publicly traded securities gain into

For additional information see the federal Form 1040

specialized small business investment companies

instructions for line 11.

(IRC Section 1044)

Adjustment: If you are an RDP receiving alimony not

In the case of the sale or any publicly traded securities

included in your federal income, enter the alimony amount

with respect to which the taxpayer elects the application

on line 11, column C.

of IRC Section 1044, gain from such sale shall be

Line 12 – Business income or (loss)

recognized only to the extent that the amount realized

Enter your business income or loss.

on such sale exceeds the cost of any common stock

For additional information see the federal Form 1040

or partnership interest in a specialized small business

instructions for line 12.

investment company purchased by the taxpayer during

the 60-day period beginning on the date of such sale,

Adjustments:

reduced by any portion of such cost previously taken into

Election to treat certain depreciable business assets

account under this section.

as an expense (IRC Section 179(b))

The amount of gain that may be excluded for any taxable

You may elect to treat the cost of any IRC Section 179

year shall not exceed the lesser of $50,000 ($25,000 if

property as an expense, which is not chargeable to

filing married/RDP filing separately) or $500,000 ($250,000

capital account. Any cost so treated shall be allowed

if filing married/RDP filing separately), reduced by the

as a deduction for the taxable year in which the IRC

amount of gain excluded for all preceding taxable years. If

Section 179 property is placed in service.

you are an RDP filing jointly, enter the difference between

If you are an RDP filing separately, your deduction is

your single tax return and your recalculated amounts

limited to 50% of the total allowable. Enter 50% of the total

(not to exceed the limitations) on line 13, column C, as a

deduction as a positive number on line 12, column C.

negative number.

Election to treat certain reforestation expenditures as

Gain on the sale of a principal residence

an expense (IRC Section 194)

(IRC Section 121):

In the case of any qualified timber property with respect

RDPs are allowed an exclusion of gain on the sale of their

to which the taxpayer has made an election, the taxpayer

principal residence. RDPs filing jointly are able to exclude

shall treat reforestation expenditures that are paid or

up to $500,000 ($250,000 if you file separately).

incurred during the taxable year with respect to such

If you sold your principal residence and excluded a gain of

property as an expense that is not chargeable to capital

$250,000 on your federal tax return and are an RDP filing

account. The reforestation expenditures shall be allowed

jointly, enter the difference between your total gain (up to

as a deduction. The aggregate amount of reforestation

$500,000) and the amount you excluded from your federal

expenditures, with respect to each qualified timber

income on line 13, column C, as a negative number.

property, shall not exceed $10,000 ($5,000 if you file as

married/RDP filing separately).

Line 14 – Other gains or (losses)

If you sold or exchanged assets used in a trade or

If you claimed a reforestation expense deduction in the

business, see the Instructions for federal Form 4797, Sale

amount of $5,000 on your federal tax return and you

of Business Property.

are an RDP filing jointly, enter the difference between

your total reforestation expense (up to $10,000 for each

Line 15 – IRA distributions

qualified timber property) and the amount you deducted

An RDP will not be treated as a spouse where such

on your federal tax return on line 12, column C, as a

treatment would result in a tax-favored account not being

negative number.

qualified as a tax-favored account for federal income

tax purposes.

Line 13 – Capital gain or (loss)

If you had a capital gain or loss, including any capital

Adjustment: An RDP may have an adjustment to line 15

gain distributions or a capital loss carryover from 2015,

if the RDP has a California-only basis in an IRA, which

complete and attach federal Form 8949, Sales and

is recoverable from an IRA distribution. For example,

Other Dispositions of Capital Assets, and Schedule D

an RDP may have a California-only basis in an IRA if

(Form 1040), Capital Gains and Losses.

the RDP’s partner is covered by an employer-provided

retirement plan. Based on the RDPs’ combined adjusted

For additional information see the federal Form 1040

gross income, the available deduction for an IRA

instructions for line 13.

contribution may be reduced for California income tax

Adjustments:

purposes. The amount disallowed for an IRA contribution

For California purposes, RDPs are treated as husband

on this worksheet creates a California-only basis in the

and wife in provisions where the husband and wife are

IRA. RDPs shall keep track of their California-only basis in

treated as one person. RDPs are not treated as one

order to recover it tax-free from IRA distributions reported

person at the federal level.

on line 15 in future years.

If your capital losses are more than your capital gains,

you can claim a capital loss deduction. The capital loss

deduction for RDPs who file jointly is limited to $3,000

($1,500 if you are an RDP filing separately).

CA RDP Adjustments Worksheet 2016 Page 11

California Rdp Adjustments Worksheet - Recalculated Federal Adjusted Gross Income - 2016 Page 11

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