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Changes to 2005 Forms

2005 Updates to Publication 1001-Supplemental Guidelines to California Adjustments

Revision Date: 09/29/07

Revision Details: Federal law provides an exclusion from gross income, for survivor benefits attributable to service by a public safety officer who is killed in the line of duty before January 1, 1997, California does not allow this exclusion.

  • Page 11 of Publication, second and third columns, 7th paragraph, page 21 of Package X

It should read:

Federal law provides an exclusion from gross income for survivor benefits attributable to service by a public safety officer who is killed in the line of duty before January 1, 1997.

Enter on Schedule CA (540 or 540NR), line 21f, column C, the amount of survivor benefits that qualifies for the federal exclusion.

This revision has a tax liability. If taxpayers followed our current instructions they would under report their survivor benefits, resulting in an incorrect tax liability. This revision allows the taxpayers to report the correct amount of survivor benefits, resulting in a correct tax liability based on those benefits.

The revised internet version is available for download.


2005 Updates to Publication 1001

Revision Date: 09/13/06

Revision Details: Column C (as referenced) means an addition to income for California tax calculation. The above quantity should be a subtraction (column B) in line 9 of Schedule CA.

  • Instructions under Dividend Income, column 3, WHAT TO DO FOR CALIFORNIA

It should read:

If the value of U.S. and California state or municipal obligations is at least 50% of the fund's total assets, enter the amount of exempt interest dividends that are attributed to U.S. obligations included in federal income on Schedule CA (540 or 540NR), line 9, column B.

The revision needs to be noted in printed products 2005 Publication 1001, booklet page 3, and 2005 Package X, page 13.

Exempt interest dividends reduce California tax. Therefore by making as addition a taxpayer would overstate their tax liability.

The revised internet version is available for download.


2005 Updates to Publication 1001

Revision Date: 03/29/06

Revision Details: 2005 Supplemental Guidelines to California Adjustments

  • Page 4, Column 2, second row from bottom, bulleted item under Depreciation of qualified leasehold improvements and qualified restaurant property acquired before 1/1/2006

It should read:

Federal law requires a 15-year recovery period. For California purposes, qualified leasehold improvements and qualified restaurant property must be recovered over a 39 year recovery period.

This revision should be noted in the 2005 Package X, page 14.

The tax liability has a minimal impact.
The revised internet version is available for download.


2005 Updates to Publication 1001

Revision Date: 03/08/06

Revision Details: Supplemental Guidelines to California Adjustments

FTB conformed by date change to AJCA Act Section 840 as explained on page 4 of our Legislative Change Notice for AB 115 (Stats. 2005, Ch. 691) regarding IRC Section 121(d)(10); property acquired in a like-kind exchange.

  • Publication 1001, page 8, on the Gain under sale of personal residence bullet, column 2; Package X, page 18

It should read:

For sale or exchanges after 5/6/97, federal law allows an exclusion of gain on the sale of a personal residence in the amount of $250,000 ($500,000 if married filing jointly). The taxpayer must have owned and occupied the residence as a principal residence for at least 2 of the 5 years before the sale. California conforms to this provision. However, California taxpayers who served in the Peace Corps during the 5 year period ending on the date of the sale may reduce the 2 year period by the period of service, not to exceed 18 months.

  • Publication 1001, page 8, on the Gain under sale of personal residence bullet, column 3

It should read:

If there is a difference between the amounts excluded (or depreciated, if recapture applies) for federal and California, complete California Schedule D (540 or 540NR). Transfer the amount from California Schedule D, line 12a, to Schedule CA (540 or 540NR), line 13, column B (if gain is less than federal). Transfer the amount from California Schedule D, line 12b, to Schedule CA (540 or 540NR), line 13, column C (if gain is more than federal).

This change must be noted made in 2005 Package X, page 18; and the Publication 1001 page 8.

The tax liability has a minimal impact.
The revised internet version is available for download.


2005 Updates to Publication 1001

Revision Date: 1/19/06

Revision Details: Spelling error

  • Page 12, second column, paragraph 8

It should read:

California law conforms to federal law in the tax treatment of expenses for reservists, performing artists, and fee-basis government officials.

This revision needs to be noted in printed products of 2005 Publication 1001 and 2005 Package X, page 22 only.

There is no tax liability.
The revised internet version is available for download.


2005 Updates to Publication 1001

Revision Date: 12/31/2005

Revision Details: Supplemental Guidelines to California Adjustments

Publication 1001, Page 12, bulleted item regarding Certain business expenses of reservists, performing artists, and fee-basis governmental officials.

  • Column 2 under DIFFERENCES BETWEEN FEDERAL AND CALIFORNIA LAW, paragraph 8

It should read:

California law conforms to federal law in the tax treatment of expenses for reservists, performing artists, and fee-basis Governmental officials.

However, there could be continuing differences in the depreciation deduction such as IRC Section 179 or bonus depreciation.

  • Column 3 under WHAT TO DO FOR CALIFORNIA, paragraph 8

It should read:

If the federal depreciation deduction is more than the California depreciation deduction, enter the difference on line 24, column B. If the federal depreciation deduction is less than the California depreciation, enter the difference in column C.

The tax liability is unknown.
The revised internet version is available for download.

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