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Changes to 2011 Forms

Updates to the Form 541 Instructions on 03/10/2014 –– Instructions for 541 Form, California Fiduciary Income Tax Return

We replaced text on:

Revision 1: Page 7, Line 13

Revision 2: Page 10, Column 1, Line 23, question 2(c), last bullet

Revision 3: Page 13, Schedule A, Charitable Deduction, Paragraph 1

Revision 4: Page 13, Schedule B, Line 3

Previous Version

Revision 1:

Enter the amount from Form 541, Side 2, Schedule A, line 5.

Revision 2:

Note: new text added.

Revision 3:

California law generally follows federal law ,however, California does not conform to IRC Section 1045 and IRC Section 1202.

Revision 4:

Note: new text added.

Revised Version

Revision 1:

Enter the amount from Form 541, Side 2, Schedule A, line 7.

Revision 2:

Excluded gain on the sale of qualified small business stock (see R&TC Section 18152.5)

Revision 3:

California law generally follows federal law.

Revision 4:

If the estate or trust excluded gain from the sale of qualified small business stock pursuant to R&TC Section 18152.5, be sure to add back the amount of the exclusion. (R&TC Section 17750)

Reason for the changes

AB 1412 (Stats. 2013, ch. 546), signed by the Governor on October 4, 2013, retroactively allows the Qualified Small Business Stock (QSBS) deferral and 50 percent gain exclusion for tax years 2008 through 2012.

Impact

This revision may decrease the tax liability for taxpayers who did not report a QSBS exclusion or deferral for taxable years beginning on or after January 1, 2008.

Back to Tax Form Changes for 2011


Updates to the Form 541 Instructions on 02/15/2013 –– Instructions for 541 Form, California Fiduciary Income Tax Return

We replaced text on:

Revision 1: Page 7, Column 3, Line 13

Revision 2: Page 10, Column 1, Question (c), last bullet

Revision 3: Page 13, Column 2, Schedule A, Charitable Deduction, Paragraph 1

Revision 4: Page 13, Column 2, Schedule A, Charitable Deduction, last paragraph

Revision 5: Page 13, Column 3, Line 3, last paragraph

Previous Version

Revision 1:

Enter the amount from Form 541, Side 2, Schedule A, line 7.

Revision 2:

Excluded gain on the sale of qualified small business stock (see R&TC Section 18152.5)

Revision 3:

California law generally follows federal law.

Revision 4:

See the instructions for completing line 1 through line 7 of federal Schedule A, Charitable Deduction (Form 1041.)

Revision 5:

If the estate or trust excluded gain from the sale of qualified small business stock pursuant to R&TC Section 18152.5, be sure to add back the amount of the exclusion. (R&TC Section 17750)

Revised Version

Revision 1:

Enter the amount from Form 541, Side 2, Schedule A, line 5.

Revision 2:

Note: text deleted.

Revision 3:

California law generally follows federal law, however, California does not conform to IRC Section 1045 and IRC Section 1202.

Revision 4:

See the instructions for completing federal Schedule A, Charitable Deduction (Form 1041.)

Revision 5:

Note: text deleted.

Reason for the changes

The Court of Appeal’s held in Cutler v. Franchise Tax Board (2012) 208 Cal. App. 4th 1247, that the qualified small business stock exclusion and deferral statutes under California Revenue and Taxation Code (R&TC) Sections 18152.5 and 18038.5 are unconstitutional. These sections are now invalid and unenforceable.

Impact

This revision increases the tax liability for taxpayers who reported a qualified small business stock exclusion or deferral for taxable years beginning on or after January 1, 2008.

Back to Tax Form Changes for 2011

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