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Changes to 2007 Form

Updates to 2007 Publication 1001 - Supplemental Guidelines to California Adjustments

The revised Internet version is available for download as of 04/25/2008

Revision Details:

To clarify our instructions.

  • 2007: Page 11 of Publication, Disaster loss, first, second, and third columns, Federal NOL, second and third columns, California NOL, first and second columns, and page 765 of the Package X.

Previously read:

1) Disaster loss - The allowable disaster loss under California law is different than the allowable disaster loss under federal law. Enter as a positive number on Schedule CA (540 or 540NR), line 21b, column B, the amount from form FTB 3805V
2) Federal NOL - Due to differences between federal and California law, you must refigure you NOL for California purposes. Use form FTB 3805V to figure the California NOL.
3) California NOL - The allowable NOL carryover under California law is different than the allowable NOL under federal law.

Revised to:

1) Disaster loss carryover - The allowable disaster loss carryover under California law is different than the allowable disaster loss carryover under federal law. Enter as a positive number on Schedule CA (540 or 540NR), line 21b, column B, the amount from your 2006 form FTB 3805V
2) Federal NOL - Due to differences between federal and California law, you must refigure you NOL carryover for California purposes. Use form FTB 3805V to figure the California NOL carryover.
3) California NOL carryover - The allowable NOL carryover under California law is different than the allowable NOL carryover under federal law.

This change instructs the taxpayers to report their carryover amount, the figure used to calculate their allowable NOL for the current year. This change could increase or decrease the taxpayer’s tax liability.


Updates to 2007 Publication 1001 - Supplemental Guidelines to California Adjustments

The revised Internet version is available for download as of 04/01/2008

Revision Details:

1. To correct the reference to the federal amount of qualified parking exclusion.

2. To add the Schedule CA (540NR) to the instructions.

3. Deleting extra wording.

4. To correct the year reference.

5. (a) To correct the reference for the amount needed and the name for the type of income reported.(b) To clarify the instructions

6. To clarify the instructions.

1. Page 1, Employee income exclusions for ridesharing programs, Second column
2. Page 3, Ottoman Turkish payments, Third column
3. Page 6, Solar or wind energy system credit, Second column
4. Page 10, Accumulation distribution to beneficiaries of contingent interest, Third column
5. Page 11, (a) Net Operating Loss, 1-4 all columns (b) Original issue discount (OID), Second column
6. Page 12, Tuition and fees deduction, Third column
and pages 755, 757, 760, 764, and 766 of the Package X.

Previously read:

1. Page 1, Federal law provides an income exclusions for the value of parking provided to an employee up to $200 per month and for transit passes provided to an employee up to $105 per month.
2. Page 3, Enter the interest on Schedule CA (540), line 8, column B.
3. Page 6, The credit carryover is allowed for up to eight taxable years after the taxable the credit was generated or until the credit is exhausted.
4. Page 10, Use California form FTB 5870A, Tax on Accumulation Distribution of Trusts, to compute the part of the accumulation distribution includable in your 2006 California adjusted gross income.
5. Page 11 (a)
1) Disaster loss carryover
The allowable disaster loss carryover under California law is different than the allowable disaster loss carryover under federal law. Enter as a positive number on Schedule CA (540 or 540NR), line 21b, column B, the amount from your 2005 form FTB 3805V, Net Operating Loss (NOL) Computation and NOL and Disaster Loss Limitations – Individuals, Estates, and Trusts.
2) Federal NOL deduction
Due to differences between federal and California law, you must refigure your NOL carryover for California purposes. Enter as a positive number on Schedule CA (540 or 540NR), line 21c, column C, the federal NOL deduction. Use form FTB 3805V to figure the California NOL carryover.
3) California NOL deduction
The allowable NOL carryover under California law is different than the allowable NOL carryover under federal law. There is no NOL carryback under California law. You may be required to elect specific NOL characterization for California which may exclude from consideration from realized losses. Use form FTB 3805V to figure the allowable California NOL deduction and enter the result as a positive number on Schedule CA (540 or 540NR), line 21d, column B.
4) NOL deduction from Enterprise Zones (EZ), LAMBRAs, the TTA, the former LARZ, or Pierce’s disease
Federal law has no comparable deduction. Use form FTB 3805Z, form FTB 3807, form FTB 3809, form FTB 3806, or form FTB 3805D, to figure the NOL deduction.

(b) In the taxable in which the debt instrument matures, is sold, exchanged, or otherwise disposed of, you must recognize the difference between the amount reported on your federal return and the amount reported for California purposes.
6. Page 12, Enter the amount on Schedule CA (540 or 540NR), line 34.

Revised to:

1. Page 1, Federal law provides an income exclusions for the value of parking provided to an employee up to $215 per month and for transit passes provided to an employee up to $110 per month.
2. Page 3, Enter the interest on Schedule CA (540 or 540NR), line 8, column B.
3. Page 6, The credit carryover is allowed for up to eight taxable years after the credit was generated or until the credit is exhausted.
4. Page 10, Use California form FTB 5870A, Tax on Accumulation Distribution of Trusts, to compute the part of the accumulation distribution includable in you 2007 California adjusted gross income.
5. Page 11 (a)
1) Disaster loss
The allowable disaster loss under California law is different than the allowable disaster loss under federal law. Enter as a positive number on Schedule CA (540 or 540NR), line 21b, column B, the amount from form FTB 3805V, Net Operating Loss (NOL) Computation and NOL and Disaster Loss Limitations – Individuals, Estates, and Trusts.
2) Federal NOL
Due to differences between federal and California law, you must refigure your NOL for California purposes. Enter as a positive number on Schedule CA (540 or 540NR), line 21c, column C, the federal NOL. Use form FTB 3805V to figure the California NOL.
3) California NOL
The allowable NOL under California law is different than the allowable NOL under federal law. There is no NOL carryback under California law. You may be required to elect specific NOL characterization for California which may exclude from consideration from realized losses. Use form FTB 3805V to figure the allowable California NOL and enter the result as a positive number on Schedule CA (540 or 540NR), line 21d, column B.
4) NOL from Enterprise Zones (EZ),LAMBRAs, the TTA, the former LARZ, or Pierce’s disease
Federal law has no comparable deduction. Use form FTB 3805Z, form FTB 3807, form FTB 3809, form FTB 3806, or form FTB 3805D, to figure the NOL.

(b) In the taxable year in which the debt instrument matures, is sold, exchanged, or otherwise disposed of, you must recognize the difference between the amount reported on your federal return and the amount reported for California purposes.
6. Page 12, Enter the amount on Schedule CA (540 or 540NR), line 34, column B.

1. No tax impact
2. No tax impact
3. No tax impact
4. No tax impact
5. (a) This change instructs the taxpayer to report the current year loss instead of the carryover amount. This change could increase or decrease the taxpayer’s tax liability.
(b) No tax impact
6. No tax impact


Updates to 2007 Publication 1001 - Supplemental Guidelines to California Adjustments

The revised Internet version is available for download as of 03/19/2008

Revision Details:This change addresses the non-conformity issue for payments from the Hokie Spirit Memorial Fund

  • Page 11, first, second, third columns after the Death Benefits paragraph

Previously read:

There is no language regarding the Hokie Memorial Fund

First column

Revised to:

Payments received from the Hokie Spirit Memorial Fund

Second column

Revised to:

Federal law provides an exclusion from gross income, for payments from the Hokie Spirit Memorial Fund to the victims of the tragic event at Virginia Polytechnic Institute & State University. California does not conform.

Third column

Revised to:

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

This adjustment could possibly increase the taxpayer's tax liability.


Updates to 2007 Publication 1001 - Supplemental Guidelines to California Adjustments

Revision Date: 01/03/2008

Revision Details: California does not conform to the Mortgage Forgiveness Debt Relief Act signed by the president on December 20, 2007. This creates a need for an adjustment (addition of income) on the California return.

  • Page 1, third column, conformity paragraph; Page 12, other income section, and page 755 & 766 of the Package X

It currently reads:

Page 1, The Conformity paragraph does not contain a bullet for the Mortgage Forgiveness Debt Relief Act of 2007.

Page 12, This section does not contain information on the mortgage relief act.

It should read:

Page 1

  • Mortgage Forgiveness Debt Relief Act of 2007.

Page 12

Mortgage Relief upon sale or other disposition of principal residence For taxable years 2007 through 2009, federal law allows an exclusion of income from discharge of indebtedness from the disposition of your principal residence. If you were personally liable for a mortgage and you were relieved of liability for the mortgage indebtedness by disposition of the property then you may have realized a gain. To the extent the amount discharged exceeded the fair market value at the time of disposition, the difference is income from discharge of indebtedness. See federal Publication 544, Sales and Other Disposition of Assets, for more information. California did not conform to this provision. Enter the amount excluded from federal income from the discharge of indebtedness on Schedule CA (540 or 540NR), line 21f, column C.

The revised Internet version is available for download.

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