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Changes to 2008 Forms

Updates to the 565 Booklet on 09/01/2010 -- California Partnership Tax Booklet

We replaced text on the 565 Booklet on Page 3, Column 1, What's New - Installment Sales paragraph

Previous Version

For taxable years beginning on or after January 1, 2009, buyers are required to withhold on each installment sale payment if the sale of California real property is structured as an installment sale.

Revised Version

For installment sales occurring on or after January 1, 2009, buyers are required to withhold on each installment sale payment if the sale of California real property is structured as an installment sale.

Reason for the changes

AB 3078 was chaptered on 9/28/08 and amended R&TC Section 18662(i)(1) regarding installment sales. This revision will make the installment sales paragraph in agreement with the language in AB 3078.

Impact

There is no tax impact. This revision will allow buyers to withhold for installment sales occurring beginning on or after January 1, 2009, instead of for taxable years beginning on or after January 1, 2009.


The revised Internet version is available for download as of 02/18/2008.

Revision Details: To correct the year referenced, from 2008 to 2009. The due date of the annual tax is the 15th day of the 4th month following the closer of the taxable year, or April 15, 2009.

  • This update is located on Page 5, Column 2, When and Where to File heading, Sentence 1.

Previously read:

A partnership must file Form 565 and pay the $800 annual tax (if required) by the 15th day of the 4th month (fiscal year) or April 15, 2008 (calendar year), following the close of its taxable year.

Revised to:

A partnership must file Form 565 and pay the $800 annual tax (if required) by the 15th day of the 4th month (fiscal year) or April 15, 2009 (calendar year), following the close of its taxable year.

Referencing the incorrect year may have a tax impact since it instructs the taxpayer to file their annual tax one year earlier than it is actually due.


The revised Internet version is available for download as of 01/26/2009.

Revision Details:

Schedule K-1's (565) instructions reference the federal Form 4684, Casualties and Thefts. At the time we finalized the Schedule K-1 (565), the only available version of the federal Form 4684 was dated 06/05/08 (Draft) without any major changes. The federal did not finalize this form until 01/09/09.

The 2008 federal Form 4684 has six new lines. Therefore, we are revising the Schedule K-1 (565) instructions to include the correct federal line reference.

  • 565 Booklet, page 45, column 2, bullet 2
  • Schedule K-1 (565) Instructions form, page 5, column 2, bullet 2

    Previously read:

    • Net gain or loss from involuntary conversions due to casualty or theft. The partnership will give you a schedule that shows the California amounts to be entered on federal Form 4684, Casualties and Thefts, Section B, Part II, line 34, column (b)(i), column (b)(ii), and column (c).

    Revised to:

    • Net gain or loss from involuntary conversions due to casualty or theft. The partnership will give you a schedule that shows the California amounts to be entered on federal Form 4684, Casualties and Thefts, Section B, Part II, line 40, column (b)(i), column (b)(ii), and column (c).

The incorrect line reference to federal Form 4684 may cause confusion and may cause the taxpayer to under report/over report its income, which would result in an incorrect tax liability.

This revision to the instructions will provide the correct line reference, which will help the taxpayer to correctly report its tax liability.

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