Chat with an FTB Representative

Changes to 2008 Forms

Updates to the 3806 Booklet on 01/22/2010 -- Los Angeles Revitalization Zone Business Booklet

We replaced text on the 3806 Booklet on Page 7, Los Angeles Revitalization Zone Business Booklet instructions, Instructions for Worksheet II, Net Operating Loss (NOL) Carryover and Carryover Limitations.

Previous Version:

Individuals use the California Schedules CA (540) or CA (540NR) line 12 and line 18; the federal Schedule E, line 26, line 32, and line 40; and the federal Form 4797, line 9.

Revised Version:

Individuals use the California Schedules CA (540) or CA (540NR) line 12, line 14, and line 18; the federal Schedule E, line 26, line 32, and line 40; and the federal Form 4797, line 9.

Reason for the changes

Net business income includes recapture amounts resulting from the sale of business property. We added line 14 to include the recapture amounts from the sale of depreciable business assets.

Impact

This change includes recapture amounts in the net business income computation. This may result in an increased tax liability if the taxpayer meets the criteria for a NOL carryover suspension and credit limitation.


Updates to 2008 Form 3806 Booklet, Los Angeles Revitalization Zone Business Booklet

The revised Internet version is available for download as of 01/27/2009.

Revision Details: Form 3806 booklet instructions currently state that for NOLs incurred in taxable years beginning on or after January 1, 2010, the carryover period is extended from 10 taxable years to 20 taxable years following the year of the loss. Based on the new rules under the R&TC Sections 17276.10 and 24416.10, the 20 years carryover should apply for NOLs incurred in taxable years beginning on or after January 1, 2008, not 2010. Therefore, the taxable year referenced is changed from 2010 to 2008.

  • This update is located on page 7 instructions, column 2, paragraph 2.

Previously read:

For NOLs incurred in taxable years beginning on or after January 1, 2010, California has extended the NOL carryover period from 10 to 20 taxable years following the year of the loss.

Revised to:

For NOLs incurred in taxable years beginning on or after January 1, 2008, California has extended the NOL carryover period from 10 to 20 taxable years following the year of the loss.

Back to Tax Form Changes for 2008