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Changes to 2003 Forms

2003 Updates to Form 100S Booklet

Revision Date: 02/24/2004

Revision Details: Form 100S Corporation Tax Booklet - California S Corporation Franchise or Income Tax Return Instructions

Note: on the 100S Booklet. Lines 5, 8, 9, and 10 could cause the possible miscalculation of capital gain/loss and would have an impact on the tax liability. The NOTE update is to clarify the instructions.

  • Instructions for Form 100S, Page 11, Worksheet for Computation of Gain or Loss

It should read:

Line 5: Total gain/loss. Subtract the amount on line 4 from the amount on line 1. If a loss, enter on line 8 as a capital loss.

Line 8: Capital gain/loss. Subtract line 7 from line 5.

Line 9: Enter the amount of unused capital loss carryover (if any) from the 2003, California Schedule D (100S), Section B, Part II, line 10.

Line 10: Subtract line 9 from line 8. If line 10 is a loss, carry the loss forward to year 2004. If line 10 is a gain, enter the amount on Form 100S, line 7.

  • Instructions for Form 100S, Page 12, column 1, 3rd paragraph

It should read:

Note: If the S corporation did not file a 2003, California Schedule D (100S), enter the amount of unused capital loss carryover (if any) from 2002, Schedule D (100S), on line 9 of the worksheet.

These revisions in Package X are on page 99 and 100; the Form 100S Booklet, pages 11 and 12, and the instructions located on the internet.

The revised internet version is available for download.


2003 Updates to Schedule B/C/D/H (100S)

Revision Date: 03/15/2004

Revision Details: Schedule B/C/D/H (100S) - 2003 Instructions for Schedule H (100S) and the 2003 Package X.

These revisions are due to the California Court of Appeal ruling that found the R&TC section 24402 deduction unconstitutional.

  • Revisions required in the Schedule H (100S), all of Part II on page 27, and Page 110 of Package X

It should read:

Shading all of Part II of Schedule H (100S) due to Farmer Bros. Co. v. Franchise Tax Board court decision.

  • Revisions required in the Instructions for Schedule H (100S), columns 1, 2, and 3, and Page 111 of Package X

It should read:

What's New (added prior to other instructions)

In Farmer Bros. Co. v. Franchise Tax Board (2003) 108 Cal App 4th, 134 Rptr. 2nd 390, the California Court of Appeal found that the R&TC Section 24402 deductible dividend provision discriminated against interstate commerce in violation of the Commerce Clause of the United States Commerce Clause of the United States Constitution. R&TC Section 24402 provided for a deduction to the extent that the dividend payer was taxable in California. A statute that is held to be unconstitutional is invalid and unenforceable. Therefore, the deduction is not available.

  • Instructions for Schedule H (100S),Part II, are deleted in full and adding

It should read:

Part II has been deleted due to the Farmer Bros. Co. v. Franchise Tax Board decision, see What's New paragraph above.

  • Instructions for Schedule H (100S), Part III, 2nd paragraph, adding

It should read:

  • In no event will and R&TC Section 24411 deduction be allowed with respect to a dividend which was eliminated under R&TC Section 25106.

The revised internet version is available for download.

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