Depreciation limitations placed in service in the calendar year 2020:
For passenger automobiles (that are not trucks or vans)
Tax Year Amount
1st Tax Year $3,304
2nd Tax Year $5,227
3rd Tax Year $3,084
Each Succeeding Year $1,856
For trucks and vans
Tax Year Amount
1st Tax Year $3,721
2nd Tax Year $5,959
3rd Tax Year $3,502
Each Succeeding Year $2,169
For lease inclusion indexing amounts, go to gov/forms/search and enter
lease inclusion.
Amortization of Certain Intangibles (IRC Section 197): Property
classified as Section 197 property under federal law is also Section 197
property for California purposes. There is no separate California election
required or allowed. However, for Section 197 property acquired before
January 1, 1994, the California adjusted basis as of January 1, 1994,
must be amortized over the remaining federal amortization period.
Grapevines Subject to Phylloxera or Pierce’s Disease: For California
purposes, replacement grapevines may be depreciated using a recovery
period of five years instead of ten years.
This list is not intended to be all-inclusive of the federal and state differences.
For additional information, refer to California’s R&TC.
Specic Line Instructions
Line 1 – California depreciation for assets and amortization for
intangibles placed in service during the 2020 taxable year.
Complete column (a) through column (i) for each asset or group of assets or
property placed in service during the 2020 taxable year. Enter the column (f)
totals on line 1(f). Enter the column (i) totals on line 1(i).
Line 2 – California depreciation for assets placed in service
beginning before the 2020 taxable year.
Enter total California depreciation for assets placed in service beginning
before the 2020 taxable year, taking into account any differences in asset
basis or differences in California and federal tax law.
Line 4 – California amortization for intangibles placed in service
beginning before the 2020 taxable year.
Enter total California amortization for intangibles placed in service beginning
before the 2020 taxable year, taking into account any differences in asset
basis or differences in California and federal tax law.
Assets with a Federal Basis Different from California Basis
Some assets placed in service on or after January 1, 1987, will have a
different adjusted basis for California purposes due to the credits claimed
or accelerated write-offs of the assets. Review the list of depreciation and
amortization items in the instructions for Schedule CA(540), California
Adjustments — Residents, and ScheduleCA(540NR), California
Adjustments — Nonresidents or Part-Year Residents. If the LLC has any
other adjustments to make, get FTB Pub.1001, for more information.
Line 6 – Total Depreciation and Amortization
Add line 3 and line 5. Enter the total on line 6 and on Form 568,
Schedule B, line 17a.
If depreciation or amortization is from more than one trade or business
activity, or from more than one rental real estate activity, the LLC should
separately compute depreciation for each activity. Use the depreciation
computed on this form to identify the net income for each activity. Report
the net income from each activity on an attachment to Schedule K-1 (568),
Member’s Share of Income, Deductions, Credits, etc., for purposes
of passive activity reporting requirements. Use California amounts
to determine the depreciation amount to enter on line 14 of federal
Form 8825, Rental Real Estate Income and Expenses of a Partnership or an
S Corporation.
Line 7
Enter the IRC Section 179 expense deduction amount from line 12 of the
following worksheet.
These limitations apply to the LLC and each member.
Election to Expense Certain Tangible Property (IRC Section 179) Worksheet
Follow the instructions on federal Form 4562, Depreciation and Amortization, for listed property.
1 Maximum dollar limitation
.......................................................................... 1 $ 25,000
2 Total cost of IRC Section 179 property placed in service during the taxable year ................................. 2
3 Threshold cost of IRC Section 179 property placed in service during the taxable year
............................. 3 $200,000
4 Reduction in limitation. Subtract line 3 from line 2. If zero or less, enter -0- .................................... 4
5 5 Dollar limitation for taxable year. Subtract line 4 from line 1. If zero or less, enter -0- .............................
(a)
Description of property
(b)
Cost
(c)
Elected cost
6
7 Listed property. Use federal Form 4562, Part V, line 29. Make adjustments for California law and basis differences ...... 7
8 Total elected cost of IRC Section 179 property. Add amounts in column (c), line 6 and line 7 . . . . . . . . . . . . . . . . . . . . . . . 8
9 Tentative deduction. Enter the smaller of line 5 or line 8.................................................... 9
10 Carryover of disallowed deduction from 2019. See instructions for line 10 through line 12 on federal Form 4562 ...... 10
11 Income limitation. Enter the smaller of line 5 or the aggregate of the LLC’s items of income and expense described in
IRC Section 702(a) from any business actively conducted by the LLC, other than credits, tax-exempt IRC Section 179
expense deduction, and guaranteed payments under IRC Section 707(c) ..................................... 11
12 IRC Section 179 expense deduction. Add line 9 and line 10, but do not enter more than line 11. Enter on
Schedule K (568), line 12 and on form FTB 3885L, line 7.................................................. 12
13 Carryover of disallowed deduction to 2021. Add line 9 and line 10 and subtract line 12. Enter here and on
form FTB 3885L, line 8. ........................................................................... 13
Page 2 FTB 3885L Instructions 2020
