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Changes to 2007 Form

Updates to 2007 FTB 3885 – Corporation Depreciation and Amortization

The revised Internet version is available for download as of 05/14/2008.

Revision Details: The federal published a new 2007 federal Form 4562-FY in 4/08 based on the changes from the Economic Stimulus Act of 2008. This form is used for entities that are on a fiscal year and want to claim an additional first ,year depreciation allowance for. qualified property placed in service after 12/31/07.
The existing California form and instructions do not include reference to the new federal Form 4562-FY. We are revising the form and instructions to include the reference to the new federal Form 4562-FY.

    1. FTB 3885: Side 1, line 17 and line 21
    2. Page 2, 1st column, 1st paragraph
    3. Page 2, 2nd column, 1st paragraph
    4. Page 2, 2nd column, Line 7, 1st paragraph
    5. Page 2, 2nd column, Line 7, last paragraph
    and page 54 & 56 of the Package X.

Previously read:

1. 17 Total depreciation claimed for federal purposes from federal Form 4562, line 22.
    21 Total amortization claimed for federal purposes from federal Form 4562, line 44.
2. See the instructions for federal Form 4562, Depreciation and Amortization,. . . . .
3. See the instructions for federal Form 4562 for more information.
4. Use a format similar to federal Form 4562 ,... ...
5. ... see the instructions for federal Form 4562.

Revised to:

1. 17 Total depreciation claimed for federal purposes from federal Form 4562 or Form 4562-FY, line 22.
    21 Total amortization claimed for federal purposes from federal Form 4562 or Form 4562-FY, line 44.
2. See the instructions for federal Form 4562 or Form 4562-FY, Depreciation and Amortization,. . .
3. See the instructions for federal Form 4562 or Form 4562-FY, for more information.
4. Use a format similar to federal Form 4562 or Form 4562-FY... ...
5. ... see the instructions for federal Form 4562 or Form 4562-FY .

If the taxpayer is required to complete federal Form 4562-FY to claim the additional depreciation allowable based on changes made by the: Economic Stimulus Act of 2008, and the existing CA Form 3885 doesn't refer to the new federal Form 4562-FY, then the taxpayer may enter -0- on CA Form 3885, line 17 or line 21 and doesn't report any federal depreciation or amortization deduction. That may increase the adjustment amount and decrease the taxable income and the tax liability.

This revision will provide the correct federal form references and will help the taxpayer to report the correct amount of depreciation or amortization deduction, which will result in a correct amount of taxable income and tax liability.

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