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568
2009
Limited Liability Company Tax Booklet
STATE OF CALIFORNIA
FRANCHISE TAX BOARD
Table of Contents
General Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Instructions for LLC Income Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Instructions for Form 568 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Instructions for Schedule K (568) and Schedule K-1 (568) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Federal/State Line References Chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Limited Liability Company Income Worksheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Form 568 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Schedule K-1 (568) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Schedule D (568) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Instructions for Schedule D(568) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
FTB 3885L . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Instructions for FTB 3885L . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Member’s Instructions for Schedule K-1 (568) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
FTB 3832 and Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
FTB 3537 (LLC) and Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
FTB 3522 and Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 53
FTB 3536 (LLC) and Instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
Codes for Principal Business Activity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
How to Get California Tax Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Business e-file
Business e-file is available for the following returns:
• Form 568, Limited Liability Company Return of Income
• Form 565, Partnership Return of Income
• Form 100, California Corporation Franchise or Income Tax Return, including
combined reports
• Form 100W, California Corporation Franchise or Income Tax Return –
Water’s‑Edge Filers, including combined reports
• Form 100S, California S Corporation Franchise or Income Tax Return
For more information, go to ftb.ca.gov and search for business e file.
In general, California law conforms to the Internal Revenue Code (IRC) as of Suspension/Forfeiture – Beginning January 1, 2009, LLCs will be suspended
January 2005. However, there are continuing differences between California or forfeited for failure to file or failure to pay. See General Information,
and federal law. When California conforms to federal tax law changes, Suspension/Forfeiture, for more information.
we do not always adopt all of the changes made at the federal level. For Increase in Rates – For taxable years beginning on or after January 1, 2009,
more information, go to ftb.ca.gov and search for conformity. Additional the maximum personal income tax rate increased to 9.55%. In addition,
information can be found in FTB Pub. 1001, Supplemental Guidelines to non‑California Partnerships are subject to withholding requirements on the
California Adjustments, the instructions for California Schedule CA (540 or sale of California real property at a rate of 3 1/3% of sales price or 9.55% of
540NR), and the Business Entity tax booklets. gain. The alternative withholding rates for the sale of California real property by
The instructions provided with California tax forms are a summary of S corporations increased to 11.05% and 13.05% for Financial S corporations.
California tax law and are only intended to aid taxpayers in preparing their Group Nonresident Returns (also known as Composite Returns) – For
state income tax returns. We include information that is most useful to the taxable years beginning on or after 01/01/2009:
greatest number of taxpayers in the limited space available. It is not possible • Group nonresident returns may include less than two nonresident
to include all requirements of the California Revenue and Taxation Code individuals.
(R&TC) in the tax booklets. Taxpayers should not consider the tax booklets as • Nonresident individuals with more than $1,000,000 of California taxable
authoritative law. income are eligible to be included in group nonresident returns.
• An additional one percent tax will be assessed on nonresident individuals
What’s New who would have California taxable income over $1,000,000.
Charitable Contributions for 2010 Haiti Disaster – California law conforms to See FTB Pub. 1067, Guidelines for Filing a Group Form 540NR, for more
the federal law which allows a 2009 charitable contribution deduction for cash information.
contributions made after January 11, 2010, and before March 1, 2010, for the
relief of victims in areas affected by the earthquake in Haiti on January 12, Conformity – For updates regarding the following federal acts, go to
2010. Limited Liability Companies (LLCs) may claim the deduction on the ftb.ca.gov and search for conformity.
2009 or 2010 California tax return. LLCs may choose to claim the deduction • American Recovery and Reinvestment Act of 2009
in different taxable years for federal and California purposes.
New Jobs Credit – For taxable years beginning on or after January 1, 2009,
General Information
a new jobs credit in the amount of $3000 is allowed for a qualified employer A Important Information
for each increase in qualified full-time employee hired in the current taxable
year that increases the employer’s number of full-time employees over the Income Exclusion of Federal Energy Grants
previous year. Federal energy grants provided in lieu of federal energy credits are excluded
from California gross income and alternative minimum taxable income of
For more information, go to ftb.ca.gov and search for new jobs or get form individuals and businesses. The income exclusion is applicable for any taxable
FTB 3527, New Jobs Credit. year and is thus retroactive in its application.
Farmworker Housing Credit – For taxable years beginning on or after Estimated Fee for LLCs
January 1, 2009, the farmworker housing credit has been consolidated into For taxable years beginning on or after January 1, 2009, the LLC must
the low-income housing tax credit. For more information, get form FTB 3521. estimate the fee it will owe for the year and make an estimated fee payment
Backup Withholding – Beginning on or after January 1, 2010, with certain by the 15th day of the 6th month of the current taxable year. LLCs will use
limited exceptions, payers that are required to withhold and remit backup form FTB 3536, Estimated Fee for LLCs, to remit the estimated fee. A penalty
withholding to the Internal Revenue Service (IRS) are also required to will apply if the LLC’s estimated fee payment is less than the fee owed for the
withhold and remit to the Franchise Tax Board (FTB). The California backup year. The penalty is equal to 10% of the amount of the LLC fee owed for the
withholding rate is 7% of the payment. For California purposes, dividends, year over the amount of the timely estimated fee payment. A penalty will not
interests, and any financial institutions release of loan funds made in the be imposed if the estimated fee paid by the due date is equal to or greater
normal course of business are exempt from backup withholding. than the total amount of the fee of the LLC for the preceding taxable year.
If the LLC (payee) has backup withholding, the LLC (payee) must contact The LLC fee remains due and payable by the due date without extension of the
the FTB to provide a valid Taxpayer Identification Number, which is either the LLC’s return. LLCs will use form FTB 3536 to pay by the due date of the LLC’s
Secretary of State (SOS) file number or the federal employer identification return, any amount of LLC fee owed that was not paid as a timely estimated
number (FEIN), before filing the tax return. Failure to provide the SOS number fee payment. If the taxable year of the LLC ends prior to the 15th day of the
or FEIN may result in a denial of the backup withholding credit. For more 6th month of the taxable year, no estimated fee payment is due, and the
information, go to ftb.ca.gov and search for backup withholding. LLC fee is due on the due date of the LLC’s return. See General Information,
California Film and Television Tax Credit – For taxable years beginning on or Limited Liability Company Tax and Fee, for more information.
after January 1, 2011, a film and television credit against tax will be allowed. Filing Requirements for Disregarded Entities
The credit, which is allocated and certified by the California Film Commission, The filing requirements for disregarded entities have been revised. See
is 20% of expenditures attributable to a qualified motion picture and 25% of General Information, Check‑the‑Box Regulations, for more information.
production expenditures attributable to an independent film or a TV series Installment Sales
that relocates to California. The California Film Commission will accept For installment sales occuring on or after January 1, 2009, buyers are
applications on a first come, first served basis beginning on July 1, 2009. For required to withhold on each installment sale payment if the sale of California
more information go to film.ca.gov and search for incentives. real property is structured as an installment sale.
Natural Heritage Preservation Credit – The funding for the Natural Heritage Business Tax Credit Limitation
Preservation Credit is available beginning January 1, 2010, until June 30, For taxable years beginning on or after January 1, 2008, and before January 1,
2015. Currently there is no funding available to award or claim credits for the 2010, business tax credits can only offset 50% of the net tax, if the corporation’s
period from July 1, 2008, to December 31, 2009. However, carryover is not taxable income is $500,000 or more. Corporations with taxable income less
affected for previously awarded credits. than $500,000 are not subject to the credit limitation. For the purpose of this
Deferred Income – California has not conformed to the federal election limitation, taxable income means net income for state purposes.
under IRC Section 108(i) to defer the income from discharge of indebtedness Business tax credits disallowed due to the 50% limitation may be carried
in connection with the reacquisition after December 31, 2008, and before over. The carryover period for disallowed credits is extended by the number
January 1, 2011, of a debt instrument issued by a C corporation or by any of taxable years the credits were not allowed. For more information see the
person in connection with the conduct of a trade or business. applicable Schedule P, (Form 100, 100W, 540, 540NR, 541), Alternative
Partnership Converting to a Corporation – IRS Revenue Ruling 2009-15 was Minimum Tax and Credit Limitations.
released which explains that in certain situations, a partnership that converts Third-Party Designee
to a corporation under Section 301.7701-3(c)(1)(i) or under a state law For taxable years beginning on or after January 1, 2008, a partnership can
formless conversion statute is eligible to make an S election effective for the designate a third party to discuss the tax return with the Franchise Tax Board
corporation’s first taxable year. (FTB). For more information see General Information, Signatures.
ftb.ca.gov
ftb.ca.gov
1 a Total California income from Form 568, Schedule B, line 3. See instructions . . . . . . . . . . . . . . . . . 1a
b Enter the California cost of goods sold from Form 568, Schedule B, line 2 and from federal
Schedule F (1040) (plus California adjustments) associated with the receipts assigned to
California on line 1a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1b
2 a Gross California income of disregarded entities not included in lines 1 and 8 through 16 . . . . . . . 2a
b Enter the cost of goods sold of disregarded entities associated with the receipts assigned to
California on line 2a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2b
4 Add gross farm income from federal Schedule F (Form 1040). Use California amounts . . . . . . . . . . . 4
5 Enter the total of other income (not loss) from Form 568, Schedule B, line 10 . . . . . . . . . . . . . . . . . . 5
6 Enter the ordinary gains (not losses) and the recapture income from California Schedule D-1,
Part II, line 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
a Enter the total gross rents from federal Form 8825, line 17 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8a
b Enter net income or loss from federal Form 8825, line 20a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8b
c Enter as a positive amount the total rental expenses deducted from the amount on
federal Form 8825, line 20a . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8c
9 Other California rentals. Enter the amount from Form 568, Schedule K, line 3a. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
10 California interest. Enter the amount from Form 568, Schedule K, line 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
11 California dividends. Enter the amount from Form 568, Schedule K, line 6 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
12 California royalties. Enter the amount from Form 568, Schedule K, line 7 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
13 California capital gains. Enter the capital gains (not losses) included in Schedule D (568). . . . . . . . . . . . . . . . . . . . . . . . . . . 13
14 California 1231 gains. Enter the amount of total gains (not losses) from Schedule K, line 10a . . . . . . . . . . . . . . . . . . . . . . . 14
15 Other California portfolio income (not loss). Enter the amount from Form 568 Schedule K, line 11a . . . . . . . . . . . . . . . . . . . 15
16 Other California income (not loss) not included in line 5. Enter the amount from Form 568, Schedule K, line 11b . . . . . . . . 16
17 Total California income. Add lines 7, 8d, 9, 10, 11, 12, 13, 14, 15, and 16. Line 17 may not be a negative number.
Enter here and on Form 568, Side 1, Line 1. If less than zero enter zero . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
ftb.ca.gov
E Check accounting method F Date business G Enter total assets at end of H Check the applicable box I Principal business activity code
(1) Cash (2) Accrual started in CA year. See instructions.
(1) Initial return (2) FINAL RETURN (same as federal)
(3) Other (attach explanation) $ ___________________ (3) Amended return
Whole dollars only
1 Total income from Limited Liability Company Income Worksheet. See instructions. . . . . . . . . . . . . . . . . . . . . . I 1 00
6 Amount paid with form FTB 3537 and 2009 form FTB 3522 and form FTB 3536. . . . . . . . . . . . . . . . . . . . . . . . I 6 00
10 Tax and fee due. If line 5 is more than line 9, subtract line 9 from line 5. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 10 00
14 Refund. If the total of line 12 and line 13 is less than line 11; subtract the total from line 11. . . . I 14 , , . 00
15 Penalties and interest. See instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I 15 00
16 Total amount due. Add line 10, line 12, line 13, and line 15, then subtract line 11 from the result. . 16 , , . 00
Single Member LLC Information and Consent — Complete only if the LLC is disregarded. Federal TIN/SSN
Sole Owner’s name (as shown on owner’s return) FEIN/CA Corp no./SOS File no.
May the FTB discuss this return with the preparer shown above (see instructions)? . . . . . . . . . . . m Yes m No
For Privacy Notice, get form FTB 1131. 3671093 Form 568 C1 2009 Side
J Enter the maximum number of members in the LLC at any time during the year. Attach a California Schedule K-1 (568) for
each of these members. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I
Yes No
(2) If “No,” was this LLC registered in California without earning any income sourced in this state during the taxable year?. . . . . . .
M Was there a distribution of property or a transfer (for example, by sale or death) of an LLC interest during the taxable year?. . . . . . . I
O (1) For this taxable year, was there a change in control or majority ownership for this limited liability company (or any legal entity in
which it holds a controlling or majority interest) that owned or (under certain circumstances) leased real property in California? .. . . . . . I
(2) For this taxable year, did this LLC (or any legal entity in which it holds a controlling or majority interest) acquire control or
majority ownership of any other legal entity that owned or (under certain circumstances) leased real property in California? . . . I
(3) If this limited liability company (or any legal entity in which it holds a controlling or majority interest) owned or
(under certain circumstances) leased real property in California, has more than 50% of the LLC ownership interest cumulatively
transferred in one or more transactions since March 1, 1975, which was not reported on a previous year’s tax return? . . . . . . . I
(Penalties May Apply – See Instructions).
P (1) Does the LLC have any foreign (non-U.S.) nonresident members?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I
(2) Does the LLC have any domestic (non-foreign) nonresident members?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I
(3) Were Form 592, Form 592-A, Form 592-B , and Form 592-F filed for these members?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I
R Is this LLC under audit by the IRS or has it been audited in a prior year?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I
X Is this LLC a direct owner of an entity that filed a federal Schedule M-3?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I
Z Does this LLC own an interest in a business entity disregarded for tax purposes?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
If “Yes,” attach schedule of disregarded entity names and identification numbers.
AA Is any member of the LLC related (as defined in IRC Section 267(c)(4)) to any other member of the LLC?. . . . . . . . . . . . . . . . . . . . . I
BB Is any member of the LLC a trust for the benefit of any person related (as defined in IRC Section 267(c)(4)) to any other member?. I
CC During the year did this LLC defer any income from the disposition of assets? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I
EE (1) Did this LLC or an entity in which this LLC has an ownership interest elect to defer income from the discharge of
I
indebtedness as described in IRC 108(i) for Federal purposes?. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(2) If “Yes” enter the portion of the discharge of indebtedness attributable to the LLC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . I .00
Member’s name SSN, ITIN, Distributive Tax Member’s Amount withheld by this Member’s
or FEIN share of income rate total tax due LLC on this member – net tax due
(see instructions) reported on Form 592-B
Total the amount of tax due. Enter the total here and on Side 1, line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .________________
Attach additional sheets if necessary.
5 Interest income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 I
6 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 I
7 Royalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 I
8 Net short-term capital gain (loss). Attach Schedule D (568) . . . . . . . . . . . . 8 I
9 Net long-term capital gain (loss). Attach Schedule D (568) . . . . . . . . . . . . . 9 I
10 a Total Gain under IRC Section 1231 (other than due to casualty or theft) . . 10a I
b Total Loss under IRC Section 1231 (other than due to casualty or theft) . . 10b I
11 a Other portfolio income (loss). Attach schedule. . . . . . . . . . . . . . . . . . . . 11a
b Total other income. Attach schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11b
c Total other loss. Attach schedule . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11c
12 Expense deduction for recovery property (IRC Section 179 and R&TC
Sections 17267.2, 17267.6, and 17268). Attach schedule . . . . . . . . . . . . . . 12
13 a Charitable contributions. See instructions. Attach schedule . . . . . . . . . . 13a
I
Deductions
ftb.ca.gov
( )
Caution: Refer to Member’s Instructions for Schedule K-1 (568) before entering information from this schedule on your California return.
(a) (b) (c) (d) (e)
Distributive share items Amounts from California adjustments Total amounts using California
federal Schedule K-1 California law. Combine source amounts
(1065) col. (b) and col. (c) and credits
where applicable
1 Ordinary income (loss) from trade or
business activities . . . . . . . . . . . . . . . . . . . . . . .
6 Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Income (Loss)
7 Royalties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
For Privacy Notice, get form FTB 1131. 7901093 Schedule K-1 (568) 2009 Side
(a) (b) (c) (d) (e)
Distributive share items Amounts from California adjustments Total amounts using California
federal Schedule K-1 California law. Combine source amounts
(1065) col. (b) and col. (c) and credits
12 Expense deduction for recovery property
(IRC Section 179 and R&TC Sections 17267.2,
17267.6 and 17268) . . . . . . . . . . . . . . . . . . . . . .
13 a Charitable contributions . . . . . . . . . . . . . . . . .
Deductions
20 a Investment income . . . . . . . . . . . . . . . . . . . . .
Other
b Investment expenses . . . . . . . . . . . . . . . . . . .
c Other information. See instructions . . . . . . . .
B. Member’s share of nonbusiness income from real and tangible personal property sourced or allocable to California.
Property: Beginning $ $
Ending $ $
Payroll $ $
Sales $ $
ftb.ca.gov
FEIN
-
Part I Short-Term Capital Gains and Losses - Assets Held One Year or Less (use additional sheets if necessary)
(a) (b) (c) (d) (e) (f)
Description of property, Date acquired Date sold Sales price Cost or other basis Gain loss
Example, 100 shares 7% preferred of ‘’Z’’ Co. (mo., day, yr.) (mo.,day, yr.) See instructions. See instructions. (d) minus (e)
1
General Information Do not use this form to report the sale of business property. For sales
of business properties, use California Schedule D-1, Sale of Business
In general, California law conforms to the Internal Revenue Code (IRC) Property.
as of January 2005. However, there are continuing differences between
California and federal law. When California conforms to federal tax law Enter specially allocated short-term capital gains (losses) received
changes, we do not always adopt all of the changes made at the federal from LLCs classified as partnerships, partnerships, S corporations,
level. For more information, go to ftb.ca.gov and search for conformity. and fiduciaries on Schedule D (568), line 3. Enter specially allocated
Additional information can be found in FTB Pub. 1001, Supplemental long-term capital gains (losses) received from LLCs classified
Guidelines to California Adjustments, the instructions for California as partnerships, partnerships, S corporations, and fiduciaries on
Schedule CA (540 or 540NR), and the Business Entity tax booklets. Schedule D (568), line 7. Enter short-term and long-term capital gains
(losses) that are specially allocated to members on Schedule K-1 (568),
The instructions provided with California tax forms are a summary of Member’s Share of Income, Deductions, Credits, etc. Do not include
California tax law and are only intended to aid taxpayers in preparing these amounts on Schedule D (568). See the instructions for Schedule K
their state income tax returns. We include information that is most (568), Members’ Shares of Income, Deductions, Credits, etc., and
useful to the greatest number of taxpayers in the limited space available. Schedule K-1 (568) for more information. Also, refer to the instructions
It is not possible to include all requirements of the California Revenue for federal Schedule D (1065), Capital Gains and Losses.
and Taxation Code (R&TC) in the tax booklets. Taxpayers should not
consider the tax booklets as authoritative law. Nonresident and Part-Year Resident Members, get FTB Pub. 1100,
Taxation of Nonresidents and Individuals Who Change Residency.
Internet Access With the enactment of AB 1115 (Stats. 2001, Ch 920) capital loss
You can download, view, and print California tax forms and publications carryover and capital loss limitations for nonresident members and
at ftb.ca.gov. part-year resident members, for the portion of the year they were
Access other state agencies’ websites through the State Agencies nonresidents, are determined based upon California source income
Directory on California’s website at ca.gov. and loss items only for the computation of their California taxable
income. Moreover, the character of their gains and losses on the sale or
Purpose exchange of property used in trade or business or certain involuntary
Use Schedule D (568), Capital Gain or Loss, to report the sale or conversions (IRC Section 1231) are determined for purposes of
exchange of capital assets, by the limited liability company (LLC), except calculating their California taxable income by netting California sources
capital gains (losses) that are specially allocated to any members. Section 1231 gains and losses only.
-
FEIN
Assets placed in service after 12/31/08 (depreciation): Depreciation of Assets Amortization of Property
Intangibles placed in service after 12/31/08 (amortization):
(a) (b) (c) (d) (e) (f) (g) (h) (i)
Description of property Date placed Cost or Method Life or Depreciation for Code Period or Amortization to
in service other basis of figuring rate this year section percentage this year
depreciation
General Information Amortization is an amount deducted to recover the cost of certain capital
expenses over a fixed period.
In general, California law conforms to the Internal Revenue Code (IRC) as of
January 2005. However, there are continuing differences between California In general, California conforms to federal law for assets placed in service on
and federal law. When California conforms to federal tax law changes, or after January 1, 1987. See California Revenue and Taxation Code (R&TC)
we do not always adopt all of the changes made at the federal level. For Section 17250.
more information, go to ftb.ca.gov and search for conformity. Additional
information can be found in FTB Pub. 1001, Supplemental Guidelines to B Federal/State Calculation Differences
California Adjustments, the instructions for California Schedule CA (540 or California law has not always conformed to federal law with regard
540NR), and the Business Entity tax booklets. to depreciation methods, special credits, or accelerated write-offs.
The instructions provided with California tax forms are a summary of Consequently, the recovery periods and the basis on which the depreciation
California tax law and are only intended to aid taxpayers in preparing their is calculated may be different from the amounts used for federal purposes.
state income tax returns. We include information that is most useful to the Reportable differences may occur if all or part of your assets were placed in
greatest number of taxpayers in the limited space available. It is not possible service:
to include all requirements of the California Revenue and Taxation Code • Before January 1, 1987: California disallowed depreciation under the
(R&TC) in the tax booklets. Taxpayers should not consider the tax booklets federal Accelerated Cost Recovery System (ACRS). Continue to calculate
as authoritative law. California depreciation in the same manner as in prior years for those
Internet Access assets.
You can download, view, and print California tax forms and publications • On or after January 1, 1987: California provides special credits and
at ftb.ca.gov. accelerated write-offs that affect the California basis for qualifying assets.
California does not conform to all the changes to federal law enacted in
Access other state agencies’ websites through the State Agencies Directory 1993. Therefore, the California basis or recovery periods may be different
on California’s website at ca.gov. for some assets.
California law does not conform to the federal law for the:
A Purpose
• The 50% bonus depreciation deduction [IRC Section 168(k)] for assets
Use form FTB 3885L, Depreciation and Amortization, to compute
acquired and placed in service during 2008 or 2009, and during 2010 for
depreciation and amortization allowed as a deduction on Form 568, Limited
certain qualifying property.
Liability Company Return of Income. Attach form FTB 3885L to Form 568.
• The enhanced IRC Section 179 expensing election for assets acquired
Depreciation is the annual deduction allowed to recover the cost or other
and placed in service in taxable years beginning after December 31,
basis of business or income producing property with a determinable useful
2007, and before January 1, 2010.
life of more than one year. Land is not depreciable.
What’s New For purposes of California Income tax, references to a spouse, husband,
or wife also refer to a California registered domestic partner (RDP),
New Jobs Credit – For taxable years beginning on or after January 1, unless otherwise specified. When we use the initials RDP they refer
2009, a new jobs credit against the tax will be allowed for a qualified to both a California registered domestic “partner” and a California
employer in the amount of $3,000 for each qualified full-time employee registered domestic “partnership,” as applicable. For more information
hired during the taxable year that increases the employer’s number of on RDPs, get FTB Pub. 737, Tax Information for Registered Domestic
full-time employees over the previous year. This is determined on an Partners.
annual full-time equivalent basis. Any credits not used in the taxable year
may be carried forward up to eight years. For more information, get form Round Cents To Dollars – Round cents to the nearest whole dollar. For
FTB 3527, New Jobs Credit, or go to ftb.ca.gov and search for new jobs. example, round $50.50 up to $51 or round $25.49 down to $25.
Farmworker Housing Credit – For taxable years beginning on or after A Purpose
January 1, 2009, the farmworker housing credit has been consolidated An LLC that has elected to be treated as a partnership for tax purposes
into the low-income housing tax credit. For more information, get form uses Schedule K‑1 (568) to report your distributive share of the LLC’s
FTB 3521, Low-Income Housing Credit. income, deductions, credits, etc. Keep Schedule K-1 (568) for your
Natural Heritage Preservation Credit – The funding for the Natural records. Information from the Schedule K‑1 (568) should be used to
Heritage Preservation Credit is available beginning January 1, 2010, complete your California return. However, do not file the schedule with
until June 30, 2015. Currently there is no funding available to award or your California return. The LLC has filed a copy with the Franchise Tax
claim credits for the period from July 1, 2008, to December 31, 2009. Board (FTB).
However, carryover is not affected for previously awarded credits. As a member of the LLC, you are subject to tax on your distributive
share of the LLC income, whether or not distributed.
General Information The amount of loss and deduction you are allowed to claim on
In general, California law conforms to the Internal Revenue Code (IRC) your California return may be less than the amount reported on
as of January 2005. However, there are continuing differences between Schedule K‑1 (568). Generally, the amount of loss and deduction you
California and federal law. When California conforms to federal tax law are allowed to claim is limited to your basis in the LLC and the amount
changes, we do not always adopt all of the changes made at the federal for which you are considered at-risk. If you have losses, deductions, or
level. For more information, go to ftb.ca.gov and search for conformity. credits from a passive activity, you also must apply the passive activity
Additional information can be found in FTB Pub. 1001, Supplemental loss and credit rules. It is the member’s responsibility to consider
Guidelines to California Adjustments, the instructions for California and apply any applicable limitations. See Specific Instructions, Loss
Schedule CA (540 or 540NR), and the Business Entity tax booklets. Limitations.
The instructions provided with California tax forms are a summary of You should also read the federal Schedule K-1 (1065) instructions
California tax law and are only intended to aid taxpayers in preparing before completing your California return with this Schedule K-1 (568)
their state income tax returns. We include information that is most information.
useful to the greatest number of taxpayers in the limited space available. For additional information on the treatment of LLC income, deductions,
It is not possible to include all requirements of the California Revenue credits, etc., get the following federal publications:
and Taxation Code (R&TC) in the tax booklets. Taxpayers should not
consider the tax booklets as authoritative law. • Publication 541, Partnerships
• Publication 535, Business Expenses
For taxable years beginning on or after January 1, 2003, California
will follow the revised federal instructions (with some exceptions) for Any information returns required for federal purposes under IRC
reporting the sale, exchange or disposition of an asset for which an Sections 6038, 6038A, and 6038B are also required for California
IRC Section 179 expense was claimed in a prior year by a partnership, purposes. Attach the information returns to your California return when
limited liability company (LLC), or S corporation. filed. If the information returns are not provided, penalties may be
imposed under R&TC Sections 19141.2 and 19141.5.
Members should follow federal reporting requirements as detailed in
federal Form 1065, U.S. Return of Partnership Income, and federal Internet Access
Form 4797, Sale of Business Property, instructions. You can download, view, and print California tax forms and publications
at ftb.ca.gov.
Revised Schedule K-1 – The California Schedule K-1 (568), Member’s
Share of Income, Deductions, Credits, etc., line items were revised to Access other state agencies’ websites through the State Agencies
be in a similar format with the federal Schedule K-1 (1065), Partner’s Directory on California’s website at ca.gov.
Share of Income, Deductions, Credits, etc. For more information, get
the Schedule K Federal/State Line References chart, included in the
B Definitions
Form 568, Limited Liability Company Tax Booklet. Member
An individual or entity owning an interest in the LLC whose potential
Registered Domestic Partners (RDP) – RDPs under California law must
personal liability for LLC debts is limited to the amount of money or
file their California income tax returns using either the married/RDP
other property that the member contributed or is required to contribute
filing jointly or married/RDP filing separately filing status. RDPs have the
to the LLC.
same legal benefits, protections, and responsibilities as married couples
unless otherwise specified. Federal and California law allows spouses that are the sole owners
of an eligible business entity (including an LLC) to be treated as two
If you entered into in a same sex legal union in another state, other
owners or one owner, for purposes of applying rules to determine the
than a marriage, and that union has been determined to be substantially
classification of that entity for tax purposes. If the spouses elect to be a
equivalent to a California registered domestic partnership, you are
single owner, the LLC could be disregarded as a separate entity but may
required to file a California income tax return using either the married/
not be classified as a partnership. Similarly, if the spouses elect to be
RDP filing jointly or married/RDP filing separately filing status. For
two owners, the entity may be classified as a partnership but cannot be
more information on what states have legal unions that are considered
disregarded as a separate entity. This election is not available to RDPs.
substantially equivalent, go to ftb.ca.gov and search for attorney
For more information on RDPs, get FTB Pub. 737.
general.
Line 2 – Net Income (Loss) from Rental Real Estate Activities Line 7 – Royalties
Generally, the income (loss) reported on line 2, column (d), is a passive If you have an amount reported on Schedule K-1 (568) line 7,
activity amount to all members. However, the loss limitations of IRC column (c), report this amount on Schedule CA (540 or 540NR), line 17,
Section 469 do not apply to qualified investors in qualified low-income column B or column C, whichever is applicable.
housing projects. If applicable, the LLC will attach a schedule for line 2 Line 8 and Line 9 – Net Short-term and Net Long-term Capital
to identify such amounts. If you have an amount on Schedule K-1 (568), Gains (Loss)
line 2, column (c), report this amount on Schedule CA (540 or 540NR), If you have an amount on Schedule K-1 (568), line 8 or line 9,
line 17, column B or column C, whichever is applicable. column (d), report this amount on Schedule D (540 or 540NR), line 2.
Use the following instructions to determine where to enter the line 2 Line 10a and Line 10b – Total Gain and Total Loss Under IRC
amount. Section 1231 (Other Than Due to Casualty or Theft)
• If you have a loss on line 2, column (d) (other than a qualified low- If the amounts on line 10a and line 10b relate to rental activity, the IRC
income housing project loss), enter the loss on the applicable line of Section 1231 gain (loss) is a passive activity amount. If the amounts on
form FTB 3801 or form FTB 3802 to determine how much of the loss line 10a and line 10b relate to a trade or business activity and you are
is allowable. Your share of the loss may be eligible for the special a limited partner, the IRC Section 1231 gain (loss) is a passive activity
$25,000 allowance for rental real estate losses. Get the instructions amount.
for form FTB 3801 or form FTB 3802 for more information. • If the amount is not a passive activity amount report it on
See the federal Schedule K-1 (1065) Specific Instructions for box 2, Schedule D-1, line 2, column (g).
item 1 and item 2, for more information. • If a gain is reported on line 10a, column (d), and it is a passive
Report any California adjustment amount from column (c) on activity amount report the gain on Schedule D-1, line 2, column (g).
Schedule CA (540 or 540NR) if you are a qualified investor reporting a • If a loss is reported on line 10b, column (d), and it is a passive
qualified low‑income housing project loss. activity amount, get form FTB 3801 to determine if your loss is
limited.
• If you have only income on line 2, column (d), and no other passive
losses, enter any California adjustment amount from column (c) on Line 11a – Other Portfolio Income (Loss)
Schedule CA (540 or 540NR). However, if in addition to this passive The LLC uses line 11a, column (d), to report portfolio income other
activity income, you have a passive activity loss from this LLC or than interest, dividend, royalty, and capital gain (loss) income. The LLC
from any other source, report the line 2, column (d), income on the should attach a schedule to Schedule K-1 (568) to tell you what kind
applicable line of form FTB 3801 or form FTB 3802. of portfolio income is reported on line 11a, column (d). An example of
portfolio income that could be reported on line 11a, column (d), is from
Line 3 – Net Income (Loss) from Other Rental Activities a real estate mortgage investment conduit (REMIC) in which the LLC is a
The amount on line 3, column (d) is a passive activity amount for all residual interest holder.
members.
If the LLC has a residual interest in a REMIC, it will report your share of
• If line 3, column (d) is a loss, report the loss on the applicable line of REMIC taxable income (net loss) on the schedule. Report the adjustment
form FTB 3801 or form FTB 3802. amount from column (c) on Schedule CA (540 or 540NR). The LLC
• If only income is reported on line 3, column (d), and you have will also report your share of “excess inclusion” and your share of
no other passive losses, report the California adjustment from IRC Section 212 expenses. If you itemize your deductions on federal
column (c) on Schedule CA (540 or 540NR). However, if in addition Schedule A (1040), Itemized Deductions, you may deduct these IRC
to this passive activity income, you have a passive activity loss from Section 212 expenses as a miscellaneous deduction.
FEIN
-
Note: Completion of this form does not satisfy the requirements for filing a California income tax return. See General Information C, Nonresidents Who Must File a California Return.
List below the names and identification numbers of nonresident members of record at the end of the LLC’s taxable year.
I consent to the jurisdiction of the State of California to tax
my distributive share of the LLC income attributable to Nonresident member’s
Number Nonresident member’s name California sources. SSN, ITIN, or FEIN
Signature Date
1
2
3
4
5
List below the names and identification numbers of nonresident members who sold or transferred their ownership interests before the end of the LLC’s taxable year.
I consent to the jurisdiction of the State of California to tax
my distributive share of the LLC income attributable to Nonresident member’s
Number Nonresident member’s name California sources. SSN, ITIN, or FEIN
Signature Date
1
2
3
4
5
General Information use form FTB 3832, Limited Liability Company B When to File
Nonresident Members’ Consent, to: File form FTB 3832 for either of the following:
Registered Domestic Partners (RDP) – RDPs under
California law must file their California income tax • List the names and social security numbers (SSN), • The first taxable period for which the LLC became
returns using either the married/RDP filing jointly individual taxpayer identification numbers (ITIN), subject to tax with nonresident members.
or married/RDP filing separately filing status. RDPs or federal employer identification numbers (FEIN) • Any taxable period during which the LLC had a
have the same legal benefits, protections, and of all such members. nonresident member who has not signed form
responsibilities as married couples unless otherwise • Obtain the signature of each nonresident member FTB 3832.
specified. evidencing consent to the jurisdiction of the State
If you entered into a same sex legal union in another
of California to tax that member’s distributive C Nonresidents Who Must
share of income attributable to California sources.
state, other than a marriage, and that union has
Single member LLCs do not complete form
File a California Return
been determined to be substantially equivalent to a Nonresident members (individuals, estates, trusts,
California registered domestic partnership, you are FTB 3832. The owner of the single member LLC corporations, etc.) are required to file the appropriate
required to file a California income tax return using consents to be taxed under California jurisdiction California tax returns, in addition to signing form
either the married/RDP filing jointly or married/RDP by signing the Single Member LLC Information and FTB 3832. An individual nonresident must file Long
filing separately filing status. For more information Consent on Form 568. Multiple member LLCs must Form 540NR, California Nonresident or Part-Year
on what states have legal unions that are considered complete Form 3832. Resident Tax Return, if the individual had income
substantially equivalent, go to ftb.ca.gov and search If a member fails to sign form FTB 3832, the LLC is from California sources and:
for attorney general. required to pay tax on the member’s distributive share • Was single, unmarried, or not in a registered
For purposes of California Income tax, references to of income at that member’s highest marginal rate. Any domestic partnership at the end of 2009 and the
a spouse, husband, or wife also refer to a California amount paid by the LLC will be considered a payment individual’s gross income from all sources was
registered domestic partner (RDP), unless otherwise made by the member (California Revenue and Taxation more than $14,622; or adjusted gross income from
specified. When we use the initials RDP they refer to Code Section 18633.5). Get Form 568, Limited Liability all sources was more than $11,698.
both a California registered domestic “partner” and Company Tax Booklet, for more information. • Was married or in a RDP at the end of 2009, and
a California registered domestic “partnership,” as If the nonresident member has a spouse/RDP, the the individual and spouse/RDP had a combined
applicable. For more information on RDPs, get FTB spouse/RDP must also sign form FTB 3832. gross income from all sources of more than
Pub. 737, Tax Information for Registered Domestic e-file – If you e-file, attach the signed copy of form $29,245; or adjusted gross income from all
Partners. FTB 3832 to the form FTB 8453-LLC, California e-file sources of more than $23,396.
e-file – In January 2007, Franchise Tax Board Return Authorization for Limited Liability Companies. Get Form 540NR, Nonresident or Part-Year Resident
(FTB) began offering the option to e-file to limited Retain the signed copy in the LLC Officers’ records Tax Booklet, for more information.
liability companies filing Form 568, Limited along with a copy of the return and other associated
Liability Company Return of Income, and certain forms, schedules, and documents, as required by D Group Nonresident
accompanying forms and schedules. Check with the the Franchise Tax Board e-file Program. Get FTB
limited liability company’s (LLC) software provider to Pub. 1345, 2009 e-file Handbook for Authorized
Member Return
see if the LLC can e-file. Certain nonresident members of an LLC doing
e-file Providers, Section 7, Record Keeping and Data
business in California may elect to file a group
Retention, for more information.
A Purpose nonresident return using Long Form 540NR. For
When a multiple member LLC has one or more more information, get FTB Pub. 1067, Guidelines for
members who are nonresidents of California, Filing a Group Form 540NR.
For Privacy Notice, get form FTB 1131. 7591093 FTB 3832 C1 2009
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ftb.ca.gov
DBA FEIN
-
Address (suite, room, PO Box, or PMB no.)
For Privacy Notice, get form FTB 1131. 6121093 FTB 3537 2009 Side 1
Form at bottom of page
DETACH HERE IF NO PAYMENT IS DUE, DO NOT MAIL THIS FORM DETACH HERE
Limited liability company name Secretary of State (SOS) file number FEIN
-
Nonresident member(s) that did not sign form FTB 3832: Taxable Year 2009
(a) (b) (c) (d) (e) (f) (g)
Member’s name SSN, ITIN, or FEIN Distributive Tax Member’s Amount withheld by this Member’s
share of income rate total tax due LLC on this member – net tax due
(see instructions) reported on Form 592-B
Total member’s tax due. Enter this amount on Side 1, Amount of payment (This is the amount you expect to enter on
Form 568, Side 1, line 4). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $
Attach additional sheets if necessary
Side 2 FTB 3537 2009 6122093
Instructions for Form FTB 3522
LLC Tax Voucher
General Information How to Complete Form FTB 3522
Use form FTB 3522, LLC Tax Voucher, to pay the annual limited liability company Enter all the information requested using blue or black ink. To ensure the timely
(LLC) tax of $800 for taxable year 2010. An LLC should use this voucher if any of and proper application of the payment to the LLC’s account, enter the SOS file
the following apply: number (assigned upon registration with the SOS), and the federal employer
• The LLC has articles of organization accepted by the California Secretary of identification number (FEIN).
State (SOS). Series LLC – After the name for each series, write “Series LLC # ___.” In
• The LLC has a certificate of registration issued by the SOS. addition, write “Series LLC” in red in the top right margin of the voucher. Only
• The LLC is doing business in California. the first series to pay tax or file a return may use a SOS file number. For all other
You can download, view, and print California tax forms and publications series, enter zeroes in the Secretary of State (SOS) file number field. We will
at ftb.ca.gov. notify each series of its assigned number after we receive its initial payment
voucher. The series LLC should use this assigned number for subsequent years.
Access other state agencies’ websites through the State Agencies Directory on See FTB Pub. 3556, Limited Liability Company Filing Information, for more
California’s website at ca.gov. information.
Round Cents to Dollars – Round cents to the nearest whole dollar. For example, Private Mail Box
round $50.50 up to $51 or round $25.49 down to $25. Include the Private Mail Box (PMB) in the address field. Write “PMB” first, then
the box number. Example: 111 Main Street PMB 123.
Who Must Pay the Annual LLC Tax
Every LLC that is doing business in California or that has articles of organization Where to File
accepted or a certificate of registration issued by the SOS is subject to the Using blue or black ink, make a check or money order payable to the “Franchise
$800.00 annual tax. The tax must be paid for each taxable year until a certificate Tax Board.” Write the SOS file number, FEIN, and “2010 FTB 3522” on the check
of cancellation of registration or of articles of organization is filed with the SOS. or money order. Detach the payment voucher from the bottom of the page.
Get FTB Pub. 1038, Guide to Dissolve, Surrender, or Cancel a California Business Enclose, but do not staple, your payment to the voucher and mail to:
Entity, for more information.
FRANCHISE TAX BOARD
For taxable years beginning on or after January 1, 2003, an LLC as described in PO BOX 942857
Internal Revenue Code Sections 501(c)(2) and 501(c)(25) and California Revenue SACRAMENTO CA 94257-0631
and Taxation Code Sections 23701h and 23701x is exempt from the annual LLC tax.
Make all checks or money orders payable in U.S. dollars and drawn against a U.S.
When to Pay the Annual LLC Tax financial institution. If no payment is due, do not mail this voucher.
The annual LLC tax is due and payable by the 15th day of the 4th month after the Penalties and Interest
beginning of the LLC’s taxable year (fiscal year) or April 15, 2010 (calendar year).
If the LLC fails to pay its annual tax by the 15th day of the 4th month after
The first taxable year of an LLC begins when the LLC files its articles of the beginning of the taxable year, a late payment penalty plus interest will be
organization with the SOS. The first taxable year of a foreign LLC begins when the assessed for failure to pay the annual LLC tax by the due date. The Franchise Tax
LLC is organized in another state. Board may waive the late penalty, based on reasonable cause, where the greater
If the 15th day of the 4th month of an existing foreign LLC’s taxable year has of the annual tax or 90% of the tax shown on the return is paid by the original due
passed before the foreign LLC commences business in California or registers date of the return. The penalty and interest will be computed from the due date of
with the SOS, the annual LLC tax should be paid immediately after commencing the tax to the date of payment.
business or registering with the SOS.
Example: LLC1, a newly-formed calendar year taxpayer, organizes as an LLC Late Payment of Prior Year Annual LLC Tax
in Delaware on June 1, 2010. LLC1 registers with the SOS on August 13, 2010, If a prior year LLC tax of $800 was not paid by the 15th day of the 4th month
and begins doing business in California on August 14, 2010. Because LLC1’s after the beginning of the taxable year, the tax should be paid as soon as possible,
initial taxable year began on June 1, 2010, the annual LLC tax is due by using the appropriate taxable year form FTB 3522. Do not use any other form
September 15, 2010 (the 15th day of the 4th month of the short-period taxable for payment of the tax. This will assure proper application of the payment to the
year). LLC1’s short-period (June 1, 2010-December 31, 2010) tax return is due LLC’s account.
by April 15, 2011. The annual tax payment for taxable year 2011, with form
FTB 3522 also is due by April 15, 2011.
DETACH HERE IF NO PAYMENT IS DUE, DO NOT MAIL THIS VOUCHER DETACH HERE
Fiscal year: File and Pay by the 15th day of the 4th month after the beginning of the taxable year.
Calendar year: File and Pay by APRIL 15, 2010.
TAXABLE YEAR california form
DBA FEIN
-
Address (suite, room, PO Box, or PMB no.).
ftb.ca.gov
DBA FEIN
-
Address (suite, room, PO Box, or PMB no.)
For Privacy Notice, get form FTB 1131. 6221103 FTB 3536 2009
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