Skip to Main Content

2018 Instructions for Form FTB 1115

Request for Consent for a Water’s-Edge Re-Election

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

In general, if a corporation terminates its water’s-edge election, with or without the Franchise Tax Board’s (FTB’s) consent, it is required to file on a worldwide basis for at least 84 months before making another election. The FTB may waive the application of this rule for good cause. Good cause for this purpose has the same meaning as described in Treas. Reg. Section 1.1502‑75(c). To obtain the FTB’s consent to re-elect water’s‑edge for good cause, the taxpayer must file form FTB 1115, Request for Consent for a Water’s‑Edge Re‑Election.

The FTB’s consent is not required if the election was terminated as a result of an affiliation change as provided in California Revenue and Taxation Code (R&TC) Section 25113.

A   Purpose

Use form FTB 1115 to request the FTB’s consent to re-elect water’s‑edge prior to the expiration of the 84-month period following the last day of the terminated election. The FTB may approve the corporation request for a good cause as provided in R&TC Section 25113(c)(11) and Cal. Code Regs., tit. 18, section 25113.

Do not use this form to renew a current water’s-edge election.

B   Due Date

The taxpayer must file form FTB 1115 with the FTB no later than the 90th day prior to the due date, including extensions, of the tax return for which the re-election would be effective.

Do not file form FTB 1115 with the tax return because the request will not be timely filed and will be considered invalid.

C   Approval and Effective Date

Do not change the method of filing until the FTB has approved this request. The FTB’s approval of the request for consent to re-elect water’s-edge does not constitute making a water’s-edge election. After receiving the FTB’s consent to re-elect, the corporation must make its water’s-edge election. See General Information F, Making a Water’s-Edge Election, for more information.

Approval for consent to re-elect water’s-edge is effective for the taxable year in which good cause occurred. Consent given by the FTB will not be retroactive.

The FTB will notify the corporation if its request is approved. The corporation should generally receive a determination on its re‑election request within 60 days after it has filed form FTB 1115. If the FTB takes no action or requests no additional information within 60 days of the filing of the request to re-elect, the request is deemed to be disallowed. See Cal. Code Regs., tit. 18, section 25113(e) for more information.

D   Where to File

A corporation must file form FTB 1115 separately from any other form. A form FTB 1115 filed with the tax return would not be considered timely filed and would not be valid.

Mail form FTB 1115 to:

PO BOX 1779

E   Request to Withdraw

The corporation may withdraw its request at any time before the FTB takes action.

The request must be in writing and mailed to the address shown in General Information D, Where to File.

F   Making a Water’s-Edge Election

R&TC Section 25113 and Cal. Code Regs., tit. 18, section 25113 govern the manner of making a water’s-edge election as provided under R&TC Section 25110. A corporation electing water’s-edge must do each of the following:

  • Compute the corporation’s income on a water’s-edge basis.
  • C corporations use Form 100W, California Corporation Franchise or Income Tax Return - Water’s-Edge Filers; S corporations use Form 100S, California S Corporation Franchise or Income Tax Return.
  • Attach the Form 100-WE, Water’s-Edge Election, to the timely filed original return (Form 100W or Form 100S) for the year of the election.

Form 100W and Form 100-WE are the forms prescribed by the FTB for corporations filing on a water’s-edge basis. The FTB does not consider the filing of federal informational returns such as Form 5471, Information Return of U.S. Persons With Respect To Certain Foreign Corporations, and Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business, to be other objective evidence for purposes of making a valid water’s-edge election. California law requires the filing of these federal forms whether the taxpayer files on a worldwide or water’s-edge basis (R&TC Sections 19141.2 and 19141.5). Get Form 100W Corporation Tax Booklet Water’s-Edge Filers, for more information.

Specific Instructions

Private Mail Box (PMB)

Include the PMB in the address field. Write “PMB” first, then the box number. Example: 111 Main Street PMB 123.

Part II – Basis to Request a Water’s-Edge Re-Election

Provide an explanation for the request to re‑elect water’s-edge. The basis for the request must clearly state the good cause supporting the request.

In general, the request for consent to re‑elect water’s-edge will be granted only if the corporation demonstrates that it meets the good cause requirements as described in Treas. Reg. Section 1.1502-75(c).

Is there something wrong with this page?

Help us improve our website

Don't include social security numbers or other personal/confidential information.


You are leaving

We do not control the destination site and cannot accept any responsibility for its contents, links, or offers. Review the site's security and confidentiality statements before using the site.

If you have any issues or technical problems, contact that site for assistance.

Ahora está saliendo de

Nosotros no controlamos el sitio web al que se destina y no podemos aceptar ninguna responsabilidad por su contenido, enlaces, u ofertas. Revise las declaraciones de seguridad y confidencialidad del sitio antes de usar el sitio. Si tiene algún problema en general o técnico, comuníquese con ese sitio para obtener asistencia.

Si tiene algún problema en general o técnico, comuníquese con ese sitio para obtener asistencia.