Instructions for Form FTB3805V "Net Operating Loss (Nol) Computation and Nol and Disaster Loss Limitations - Individuals, Estates, and Trusts" - California

ADVERTISEMENT
2017 Instructions for Form FTB 3805V
Net Operating Loss (NOL) Computation and NOL and Disaster Loss Limitations — Individuals, Estates, and Trusts
References in these instructions are to the Internal Revenue Code (IRC) as of January 1, 2015, and the California Revenue and Taxation Code (R&TC).
General Information
For NOLs incurred in taxable years beginning
Nonbusiness capital losses and gains are
on or after January 1, 2008, California has
losses and gains from other than a trade or
In general, for taxable years beginning on or
extended the NOL carryover period from 10
business. These include sales of stock, metals,
after January 1, 2015, California law conforms
taxable years to 20 taxable years following the
and other appreciable assets as well as any
to the Internal Revenue Code (IRC) as of
year of the loss.
recognized gain from the sale of your principal
January 1, 2015. However, there are continuing
residence.
For taxable years that began in 2002 and
differences between California and federal
2003, California suspended the NOL carryover
Business losses:
law. When California conforms to federal tax
deduction. Taxpayers continued to compute
You may deduct business capital losses only
law changes, we do not always adopt all of
and carryover an NOL during the suspension
up to the total of business capital gains and
the changes made at the federal level. For
period. However, the deduction for disaster
any nonbusiness capital gains that remain after
more information, go to ftb.ca.gov and search
losses was not affected by the NOL suspension
deducting nonbusiness capital losses and other
for conformity. Additional information can
rules.
nonbusiness deductions.
be found in FTB Pub. 1001, Supplemental
The carryover period for an NOL incurred in
NOL carryback general rule: The taxpayers
Guidelines to California Adjustments, the
taxable years:
must first carry back the entire NOL incurred
instructions for California Schedule CA (540 or
in 2017 to the preceding two years. Any loss
y Beginning before January 1, 2002, have
540NR), and the Business Entity tax booklets.
not applied in the preceding two years can be
been extended for two years.
The instructions provided with California tax
carried forward up to 20 years. To determine
y Beginning on or after January 1, 2002,
forms are a summary of California tax law
the amount of NOL incurred in 2017 that
and before January 1, 2003, have been
and are only intended to aid taxpayers in
can be carried back, complete Part IV, NOL
extended for one year.
preparing their state income tax returns. We
Carryback, before completing Part I, Section A,
include information that is most useful to the
For more information, get FTB Legal
lines 26-28 or Part I, Section B, lines 26-28.
greatest number of taxpayers in the limited
Ruling 2011-4.
Amended return for NOL carryback –
space available. It is not possible to include
For taxable years beginning on or after
Individuals, estates, and trusts claim the
all requirements of the California Revenue
January 1, 2004, the NOL carryover percentage
NOL carryback by amending the 2015 and/or
and Taxation Code (R&TC) in the instructions.
is 100%. The NOL carryover percentage varies
2016 tax return using Form 540X, Amended
Taxpayers should not consider the instructions
for NOLs incurred prior to January 1, 2004.
Individual Income Tax Return, or Form 541,
as authoritative law.
See the chart on page 6 for more information.
California Fiduciary Income Tax Return.
For taxable years beginning in 2010 and
Governor Declared Disasters – For taxable
Note: Individuals, estates and trusts claiming
2011, California suspended the NOL carryover
years beginning on or after January 1, 2014,
the NOL as a carryback in any of the previous
deduction. Taxpayers continued to compute
and before January 1, 2024, taxpayers may
two years, must first file the applicable
and carryover NOLs during the suspension
deduct a disaster loss for any loss sustained in
2017 tax return and attach the completed
period. However, taxpayers with a modified
any city, county, or city and county in California
2017 form FTB 3805V, Net Operating Loss
adjusted gross income of less than $300,000
that is proclaimed by the Governor to be in a
(NOL) Computation and NOL and Disaster
or with disaster loss carryovers were not
state of emergency. For these Governor-only
Loss Limitations - Individuals, Estates, and
affected by the NOL suspension rules.
declared disasters, subsequent state legislation
Trusts, to the tax return. After the 2017 tax
For taxable years beginning in 2008 and 2009,
is not required to activate the disaster loss
return is filed, file an amended tax return
provisions. Any law that suspends, defers,
California suspended the NOL carryover
for 2015 and/or 2016 to claim the NOL
reduces, or otherwise diminishes the deduction
deduction. Taxpayers continued to compute
carryback deduction. Individuals will provide
and carryover their NOL during the suspension
of a net operating loss (NOL) shall not apply to
the following explanation on Form 540X,
period. However, taxpayers with a net business
a NOL attributable to these specified disaster
Part II, Explanation of Changes, line 5: “2017
losses. The President’s declaration continues
income of less than $500,000 or with disaster
NOL carryback deduction”. Estates and
to activate the disaster loss provisions.
loss carryovers were not affected by the NOL
trusts provide the following explanation on a
suspension rules.
For a complete list of all disasters declared
statement attached to the amended Form 541:
by the President and/or the Governor, see
The carryover period for any NOL or NOL
“2017 NOL carryback deduction”.
the Declared Disasters list in Specific Line
carryover, for which a deduction is disallowed
Do not attach the 2017 form FTB 3805V to the
Instructions. Get FTB Pub 1034, Disaster Loss
because of the 2008-2011 suspension, are
2015 or 2016 amended tax return. Attaching
How to Claim a State Tax Deduction, for more
extended by:
form FTB 3805V may delay processing of the
information.
y One year for losses incurred in
amended tax return.
NOL Carryback – For NOLs incurred in taxable
taxable years beginning on or
Election to waive/relinquish NOL carryback:
years beginning on or after January 1, 2015,
after January 1, 2010, and before
If the taxpayer would like to make the election
the carryback amount is 100% of the NOL.
January 1, 2011.
to waive the two-year carryback period for an
For more information, see Specific Line
y Two years for losses incurred in taxable
NOL incurred in 2017, check the box under
Instructions for Parts I, II, III and IV.
years beginning before January 1, 2010,
Part I, Section C, Election to Waive Carryback.
y Three years for losses incurred in taxable
Nonbusiness losses:
By making the election, the taxpayer is electing
years beginning before January 1, 2009.
You may deduct nonbusiness capital losses up
to carry an NOL forward instead of carrying it
to the amount of nonbusiness capital gains.
y Four years for losses incurred in taxable
back in previous two years. Once the election
You may not deduct any excess nonbusiness
years beginning before January 1, 2008.
is made, it’s irrevocable.
capital losses over nonbusiness capital gains.
For more information, get FTB Legal
Ruling 2011-04.
FTB 3805V Instructions 2017 Page 1
2017 Instructions for Form FTB 3805V
Net Operating Loss (NOL) Computation and NOL and Disaster Loss Limitations — Individuals, Estates, and Trusts
References in these instructions are to the Internal Revenue Code (IRC) as of January 1, 2015, and the California Revenue and Taxation Code (R&TC).
General Information
For NOLs incurred in taxable years beginning
Nonbusiness capital losses and gains are
on or after January 1, 2008, California has
losses and gains from other than a trade or
In general, for taxable years beginning on or
extended the NOL carryover period from 10
business. These include sales of stock, metals,
after January 1, 2015, California law conforms
taxable years to 20 taxable years following the
and other appreciable assets as well as any
to the Internal Revenue Code (IRC) as of
year of the loss.
recognized gain from the sale of your principal
January 1, 2015. However, there are continuing
residence.
For taxable years that began in 2002 and
differences between California and federal
2003, California suspended the NOL carryover
Business losses:
law. When California conforms to federal tax
deduction. Taxpayers continued to compute
You may deduct business capital losses only
law changes, we do not always adopt all of
and carryover an NOL during the suspension
up to the total of business capital gains and
the changes made at the federal level. For
period. However, the deduction for disaster
any nonbusiness capital gains that remain after
more information, go to ftb.ca.gov and search
losses was not affected by the NOL suspension
deducting nonbusiness capital losses and other
for conformity. Additional information can
rules.
nonbusiness deductions.
be found in FTB Pub. 1001, Supplemental
The carryover period for an NOL incurred in
NOL carryback general rule: The taxpayers
Guidelines to California Adjustments, the
taxable years:
must first carry back the entire NOL incurred
instructions for California Schedule CA (540 or
in 2017 to the preceding two years. Any loss
y Beginning before January 1, 2002, have
540NR), and the Business Entity tax booklets.
not applied in the preceding two years can be
been extended for two years.
The instructions provided with California tax
carried forward up to 20 years. To determine
y Beginning on or after January 1, 2002,
forms are a summary of California tax law
the amount of NOL incurred in 2017 that
and before January 1, 2003, have been
and are only intended to aid taxpayers in
can be carried back, complete Part IV, NOL
extended for one year.
preparing their state income tax returns. We
Carryback, before completing Part I, Section A,
include information that is most useful to the
For more information, get FTB Legal
lines 26-28 or Part I, Section B, lines 26-28.
greatest number of taxpayers in the limited
Ruling 2011-4.
Amended return for NOL carryback –
space available. It is not possible to include
For taxable years beginning on or after
Individuals, estates, and trusts claim the
all requirements of the California Revenue
January 1, 2004, the NOL carryover percentage
NOL carryback by amending the 2015 and/or
and Taxation Code (R&TC) in the instructions.
is 100%. The NOL carryover percentage varies
2016 tax return using Form 540X, Amended
Taxpayers should not consider the instructions
for NOLs incurred prior to January 1, 2004.
Individual Income Tax Return, or Form 541,
as authoritative law.
See the chart on page 6 for more information.
California Fiduciary Income Tax Return.
For taxable years beginning in 2010 and
Governor Declared Disasters – For taxable
Note: Individuals, estates and trusts claiming
2011, California suspended the NOL carryover
years beginning on or after January 1, 2014,
the NOL as a carryback in any of the previous
deduction. Taxpayers continued to compute
and before January 1, 2024, taxpayers may
two years, must first file the applicable
and carryover NOLs during the suspension
deduct a disaster loss for any loss sustained in
2017 tax return and attach the completed
period. However, taxpayers with a modified
any city, county, or city and county in California
2017 form FTB 3805V, Net Operating Loss
adjusted gross income of less than $300,000
that is proclaimed by the Governor to be in a
(NOL) Computation and NOL and Disaster
or with disaster loss carryovers were not
state of emergency. For these Governor-only
Loss Limitations - Individuals, Estates, and
affected by the NOL suspension rules.
declared disasters, subsequent state legislation
Trusts, to the tax return. After the 2017 tax
For taxable years beginning in 2008 and 2009,
is not required to activate the disaster loss
return is filed, file an amended tax return
provisions. Any law that suspends, defers,
California suspended the NOL carryover
for 2015 and/or 2016 to claim the NOL
reduces, or otherwise diminishes the deduction
deduction. Taxpayers continued to compute
carryback deduction. Individuals will provide
and carryover their NOL during the suspension
of a net operating loss (NOL) shall not apply to
the following explanation on Form 540X,
period. However, taxpayers with a net business
a NOL attributable to these specified disaster
Part II, Explanation of Changes, line 5: “2017
losses. The President’s declaration continues
income of less than $500,000 or with disaster
NOL carryback deduction”. Estates and
to activate the disaster loss provisions.
loss carryovers were not affected by the NOL
trusts provide the following explanation on a
suspension rules.
For a complete list of all disasters declared
statement attached to the amended Form 541:
by the President and/or the Governor, see
The carryover period for any NOL or NOL
“2017 NOL carryback deduction”.
the Declared Disasters list in Specific Line
carryover, for which a deduction is disallowed
Do not attach the 2017 form FTB 3805V to the
Instructions. Get FTB Pub 1034, Disaster Loss
because of the 2008-2011 suspension, are
2015 or 2016 amended tax return. Attaching
How to Claim a State Tax Deduction, for more
extended by:
form FTB 3805V may delay processing of the
information.
y One year for losses incurred in
amended tax return.
NOL Carryback – For NOLs incurred in taxable
taxable years beginning on or
Election to waive/relinquish NOL carryback:
years beginning on or after January 1, 2015,
after January 1, 2010, and before
If the taxpayer would like to make the election
the carryback amount is 100% of the NOL.
January 1, 2011.
to waive the two-year carryback period for an
For more information, see Specific Line
y Two years for losses incurred in taxable
NOL incurred in 2017, check the box under
Instructions for Parts I, II, III and IV.
years beginning before January 1, 2010,
Part I, Section C, Election to Waive Carryback.
y Three years for losses incurred in taxable
Nonbusiness losses:
By making the election, the taxpayer is electing
years beginning before January 1, 2009.
You may deduct nonbusiness capital losses up
to carry an NOL forward instead of carrying it
to the amount of nonbusiness capital gains.
y Four years for losses incurred in taxable
back in previous two years. Once the election
You may not deduct any excess nonbusiness
years beginning before January 1, 2008.
is made, it’s irrevocable.
capital losses over nonbusiness capital gains.
For more information, get FTB Legal
Ruling 2011-04.
FTB 3805V Instructions 2017 Page 1
If the taxpayer elects to waive the two-year
of net operating loss from all sources. Only
Line 9 – Enter income that is not related
carryback period and carry the NOL forward,
your California sourced income and losses
to a trade or business (such as dividends,
enter the amount from line 25 on Part III,
are considered in determining if you have a
pensions, annuities, income from an
line 4, column (d) and column (h). If you have
California NOL.
endowment, or interest earned on
an NOL from more than one source/type, list
investments).
Change of Residency to California.
each loss separately.
For taxable years beginning on or after
Line 11 and Line 12 – You may subtract
If you have an NOL or disaster loss from prior
January 1, 2002, if you have NOL carryovers
nonbusiness deductions only from
years (line 23), complete Part II and Part III, to
and were a nonresident of California in prior
nonbusiness income, including any
determine the loss carryover to future years.
years, the NOL carryovers must be restated
nonbusiness capital gains that remain after
as if you had been a California resident for all
deducting nonbusiness capital losses. If your
A
Purpose
prior years.
nonbusiness deductions are larger than your
nonbusiness income, you may not deduct the
Individuals, estates, or trusts use form
Change of Residency from California.
excess.
FTB 3805V, to figure the current year NOL
For taxable years beginning on or after
and to limit the NOL carryback/carryover and
January 1, 2002, if you have NOL carryovers
Line 16 – You may deduct business capital
disaster loss deductions.
and you become a nonresident of California,
losses only up to the total of business capital
your NOL carryovers must be restated as if
gains and any nonbusiness capital gains that
Corporations use form FTB 3805Q, Net
you had been a nonresident of California for all
remain after deducting nonbusiness capital
Operating Loss (NOL) Computation and NOL
prior years.
losses and other nonbusiness deductions.
and Disaster Loss Limitations — Corporations.
If your residency status changes from the time
Line 23 – Enter the amount of your prior year
B
NOLs
you generate the NOL carryover to the time
NOL and disaster loss carryover from your
you apply the NOL deduction, you will need
2016 form FTB 3805V, Part III, line 5 and
NOLs and Disaster Losses – If your
to recompute the NOL carryover amount. For
line 6.
deductions for the year exceed your income,
more information, get FTB Pub. 1100, Taxation
you may have an NOL carryover. The California
Line 28 – Go to Part III, Current Year NOLs,
of Nonresidents and Individuals Who Change
NOL is generally figured the same way as the
line 4, to record your 2017 NOL carryover
Residency.
federal NOL. However under California law:
to 2018. Complete line 4, column (d) and
column (h), for each type of loss that you
y Carryover/carryback periods and
Specific Line Instructions
incurred. See Part IV, line 3, column (c) and
percentages vary with the type of California
column (i) for each type of loss that the
NOL. The tables on page 5 and page 6 show
Form FTB 3805V is divided into four parts:
Individuals, estates, and trusts incurred.
the types of NOLs available, a description,
the taxable year the NOLs were incurred,
Part I:
Computation of Current Year NOL.
Section B – Nonresidents and
the percentages and carryover/carryback
Part II:
Determine Modified Taxable Income
Part-Year Residents
periods for each type of loss.
(MTI). MTI is the amount of your
y An NOL may be carried over to future
Full-Year Nonresidents: Complete Part I,
taxable income that can be offset by
years. No carrybacks are allowed for NOLs
Section B, column A and column B.
your prior years’ NOL carryover.
incurred in taxable years beginning before
Part-Year Residents: Complete Part I,
Part III:
NOL Carryover and Disaster Loss
January 1, 2013. Note: California will allow
Section B, column A through column E.
Carryover Limitations.
NOLs incurred in taxable years beginning
Enter the number of days during the year you
on or after January 1, 2013, to be carried
Part IV:
NOL Carryback.
were a California resident: ________________
back to each of the preceding two taxable
Part I – Current Year NOL
years. For more information, see the NOL
Enter the number of days during the year you
Carryback table on page 5.
were a nonresident: _________________.
Use Part I to figure your current year NOL, if
y Prior to the 2014 taxable year, if you elected
any, to carry back to the preceding two years
Complete column A, line 1 through line 25 as
an NOL from an activity within the following
or to carry over to future years.
if you were a California resident for the entire
areas or zones to offset income earned
year.
If you have losses from more than one
solely within those areas or zones:
source and/or more than one type, it may
Line 1 – Enter the amount from 2017 Long
1) Enterprise Zone (EZ). Get FTB 3805Z,
be necessary to compute the allowable NOL
Form 540NR, line 17.
Enterprise Zone Business Booklet, for
carryover for each loss separately.
Line 2 – Enter the amount from 2017 Long
more information.
If you do not have a current year NOL, skip
Form 540NR, line 18.
2) Local Agency Military Base Recovery
Part I and go to Part II.
Area (LAMBRA). Get FTB 3807, Local
Line 3a – If negative, use brackets. If positive,
Agency Military Base Recovery Area
enter -0- here and on line 25. Complete Part II
Section A – California Residents
Business Booklet, for more information.
and Part III if you have a carryover from prior
Line 3 – Estates or trusts, enter the amount
years.
from your 2017 Form 541, line 20a or
C
Nonresidents and
Line 18 – If you do not have a loss on
Form 109, line 9.
Part-Year Residents
Schedule D (540NR), line 4 worksheet for
Line 8 – Enter deductions that are not related
nonresidents and part-year residents, skip
Do not complete Part I, Section A.
to a trade or business and are not related to
line 18 through 21 and enter on line 22 the
Full-Year Nonresidents: Complete Part I,
your employment (such as taxes, medical
amount from line 17.
Section B, column A and column B.
expenses, alimony, charitable contributions,
Complete column B, line 1 through line 25 if
and your contributions to individual retirement
Part-Year Residents: Complete Part I,
you were a nonresident for the entire year.
plans). If you do not itemize your deductions,
Section B, column A through column E.
your nonbusiness deductions include the
Line 1 – Enter the amount from 2017 Long
NOL Carryover Computation. For taxable years
standard deduction. A casualty loss is
Form 540NR, line 32.
beginning on or after January 1, 2002, the
considered a “business expense” regardless
Line 2 – Enter the amount from 2017
NOL carryover computation for the California
of whether it is connected with a trade or
Schedule CA (540NR), line 48.
taxable income of a nonresident or part-year
business; do not include it as a nonbusiness
resident is no longer limited by the amount
deduction.
Page 2 FTB 3805V Instructions 2017
Complete columns C and D, line 1 through
Line 3 – Form 540 filers: Enter as a positive
Declared Disasters
line 25 using the dates of transactions. If the
number the disaster loss carryover deduction
Year Code Event
dates are unknown because they were not
from your 2017 Schedule CA (540), line 21b,
2017
90 Solano County Atlas Fire (Solano County) 10/17*
specifically reported to you, then you will need
column B or Form 541, line 15a.
2017
89 Cherokee, LaPorte, Sulphur, Potter, Cascade,
Lobo & Canyon Fires (Butte, Lake, Mendocino,
to prorate the amounts. For column C, multiply
Long Form 540NR filers: Enter the disaster
Nevada, and Orange Counties) 10/17*
the amount in column A by the number of days
loss carryover deduction amount from your
2017
88 Tubbs, Atlas & Multiple Other Fires (Napa,
you were a resident divided by 365 days. For
Sonoma, and Yuba Counties) 10/17*
2017 Schedule CA (540NR), line 21, column E.
column D, multiply the amount in column B
2017
87 Railroad, Pier, Mission & Peak Fires (Madera,
Line 4 – Form 540 filers: Enter as a positive
Mariposa, Tulare Counties) 08/17 & 09/17*
by the number of days you were a nonresident
number the NOL carryover deduction from
2017
86 La Tuna Fire (Los Angeles County) 09/17*
divided by 365 days.
your 2017 Schedule CA (540), line 21d,
2017
85 Ponderosa Fire (Butte County) 08/17*
Column E, line 25, Enter the current year
column B or Form 541, line 15a.
2017
84 Helena Fire (Trinity County) 08/17*
NOL on line 25. California will allow NOLs to
2016
83 Siskiyou County Rainstorm
Long Form 540NR filers: Enter the NOL
be carried back to each of the preceding two
(Siskiyou County) 12/16*
carryover deduction amount from your 2017
(declared 08/17)
taxable years.
Schedule CA (540NR), line 21, column E.
2017
82 San Bernardino County Rainstorm (San
Line 28 – Go to Part III, Current Year NOLs,
Bernardino County) 07/17*
Line 5 – Enter as a positive number the
line 4, to record your 2017 NOL carryover
2017
81 Modoc County Fires (Modoc County) 07/17*
adjustments to itemized deductions, used to
to 2018. Complete line 4, column (d) and
2017
80 Detwiler Fire (Mariposa County) 07/17*
figure your federal NOL carryover. For more
column (h), for each type of loss that you
2017
79 Alamo & Whittier Fires (Santa Barbara County)
information, see federal Publication 536, Table
07/17*
incurred. See Part IV, line 3, column (c) and
1, Worksheet for NOL Carryover.
2017
78 Wall Fire (Butte County) 07/17*
column (i) for each type of loss that the
2017
77 January Winter Storms (Alameda, Alpine, Butte,
Individuals, estates, and trusts incurred.
Part III – Limitations
Calaveras, Contra Costa, El Dorado, Fresno,
Humboldt, Inyo, Kern, Kings, Lake, Lassen,
Part II – Modified Taxable
Keep a copy of form FTB 3805V with your
Los Angeles, Madera, Marin, Mendocino,
records until you use all losses or they expire.
Merced, Modoc, Monterey, Napa, Nevada,
Income (MTI)
Orange, Placer, Plumas, Sacramento,
Use this section to:
San Benito, San Bernardino, San Diego,
Use this part if:
y Figure the NOL and disaster loss deduction
San Francisco, San Luis Obispo, San Mateo,
y You are carrying over an NOL from years
Santa Barbara, Santa Clara, Santa Cruz, Shasta,
actually taken in 2017 and the total disaster
Sierra, Siskiyou, Solano, Sonoma, Stanislaus,
prior to 2017.
losses and NOL to be carried over to future
Sutter, Tehama, Trinity, Tulare, Tuolumne,
y You are carrying over a disaster loss from
years.
Ventura, Yolo, and Yuba counties) 01/17*
years prior to 2017.
2016
76 December Winter Storms (Del Norte,
y Keep track of the expiration and limitations
y You have an unused 2017 disaster loss to
Humboldt, Mendocino, Shasta, Santa Cruz, and
of any unused carryovers.
Trinity counties ) 12/16*
carry over.
Nonresidents or Part-Year Residents: If
2016
75 Blue Cut Fire (San Bernardino County) 08/16*
The purpose of this part is to figure your MTI.
you were a nonresident or part-year resident
2016
74 Clayton Fire (Lake County) 08/16*
You must make certain modifications to your
during the year, get FTB Pub. 1100, for more
2016
73 Chimney Fire (San Luis Obispo County) 08/16*
taxable income to determine how much you
2016
72 Soberanes Fire (Monterey County) 07/16*
information.
can carry over to next year. Your carryover to
2016
71 Sand Fire (Los Angeles County) 07/16*
When to use an NOL carryover – Use your
next year is the excess of your NOL deduction
2016
70 Erskine Fire (Kern County) 06/16*
NOLs and disaster losses in the order the
over your MTI.
2015
69 City of Carlsbad Rainstorms (San Diego
losses were incurred. There is no requirement
County) 12/15*
Use this part to determine what your 2017
to deduct NOL carryovers, before disaster loss
2015
68 Inyo, Kern, and Los Angeles Counties
income (loss) was before taking any NOL
Rainstorms 10/15*
carryovers.
carryover disaster loss, or disaster loss
*
2015
67 Valley Fire (Lake and Napa Counties) 09/15
Line 1 – Enter the MTI from Part II, line 6. This
carryover deductions. This adjusted amount is
2015
66 Butte Fire (Amador and Calaveras
is the maximum NOL carryover deduction you
*
Counties) 09/15
called your MTI.
are allowed for 2017. NOL carryover amounts
2015
65 Imperial, Kern, Los Angeles, Riverside, San
Line 1 – Form 540 filers: Subtract 2017
in excess of MTI may be eligible for carryover
Bernardino, and San Diego Counties Severe
*
Form 540, line 18 from Form 540, line 17. If
Storms 07/15
to 2018. See General Information B, NOLs.
*
2015
64 Lake and Trinity Counties Wildfires 07/15
negative, use brackets.
Line 2
2015
63 Butte, El Dorado, Humboldt, Lake, Madera,
Form 541 filers: Subtract 2017 Form 541,
Napa, Nevada, Sacramento, San Bernardino,
Column (a) – Enter the years, earliest first, the
line 18 from Form 541, line 17. If negative, use
San Diego, Shasta, Solano, Tulare, Tuolumne,
loss was incurred.
and Yolo Counties Wildfires 06/15*
brackets.
*
2015
62 Santa Barbara County Oil Spill 05/15
Column (b) – If the loss is from a new
Long Form 540NR filers: Subtract 2017
2015
61
Humboldt, Mendocino, and Siskiyou Counties
business or eligible small business, enter
Schedule CA (540NR), line 48 from
*
Severe Rainstorms 02/15
the SIC Code for the new business or eligible
Schedule CA (540NR), line 45. If negative, use
*
2015
60 Mono County Wildfire 02/15
small business from the Standard Industrial
brackets.
2014
59 Severe Winter Storms (Alameda, Contra Costa,
Classification Manual.
Del Norte, Humboldt, Lake, Los Angeles, Marin,
Line 2 – Form 540 filers: Enter as a positive
Mendocino, Monterey, Orange, San Francisco,
If this is a farming enterprise, enter the
number the net capital loss deduction from
San Mateo, Santa Clara, Shasta, Sonoma,
agricultural activity code from federal
*
Tehama, Ventura, and Yolo Counties) 11/14
your 2017 Schedule D (540), line 9 or
Schedule F.
2014
58 King and Boles Wildfires (El Dorado and
Schedule D (541), line 10.
*
Siskiyou Counties) 09/14
If the loss is from a pass-through entity, such
Long Form 540NR filers: Enter your net capital
2014
57 Napa, Solano, and Sonoma Counties
as a partnership, S corporation, or limited
*
loss from your 2017 Schedule CA (540NR),
Earthquake 08/14 to 09/14
liability company (LLC), enter the partnership’s
*
2014
56 Siskiyou County Wildfires 08/14
line 13, column E, determined in accordance
FEIN, the California corporation number, or the
2014
55 Northern California Wildfires (Amador, Butte,
with Schedule D (540NR).
LLC’s California Secretary of State file number
El Dorado, Humboldt, Lassen, Madera,
Mariposa, Mendocino, Modoc, Shasta, and
from Schedules K-1 (100S, 565, or 568).
*
Siskiyou Counties) 07/14
***
If the loss is due to a disaster, enter the disaster
2014
54 San Diego County Wildfires 05/14
*
code from the list of declared disasters.
2014
53 Los Angeles County Severe Rainstorms 02/14
2013
52 Tuolumne, Mariposa, and San Francisco
**
Counties Rim Fire 08/13 to 10/13
FTB 3805V Instructions 2017 Page 3
If the Santa Cruz County Severe Storms,
Column (b) – Enter the disaster loss code.
2011
51 Los Angeles and San Bernardino
***
County Severe Winds 11/11
the Los Angeles and San Bernardino County
Column (d) – Enter your 2017 disaster loss
2011
50 Santa Cruz County Severe
Severe Winds disaster loss deduction creates
***
from Part I, line 3b.
Storms 03/11
an NOL (whether in the year of the loss or the
2011
49 Mendocino County Tsunami Wave Surge 03/11
Column (f) – Enter the smaller of the amount
prior year), the applicable NOL carryforward
2011
48 Del Norte and Santa Cruz County
in column (d) or the balance in column (g) of
**
rule for the taxable year the NOL was created
Tsunami Wave Surge 03/11
the previous line.
would apply. The NOL can be carried over for
2011
47 Severe Winter Storms, Flooding, Debris and
**
2010
Mud Flows 12/10, 01/11
Column (h) – Subtract the amount in
20 years.
2010
46 San Bruno Explosion
column (f) from the amount in column (d) and
If the San Diego County Wildfires disaster loss
2010
45 Kern County Wildfires
enter the result in column (h). Any remaining
deduction creates an NOL (whether in the year
2010
44 CA Winter Storms, 01/10, 02/10
disaster loss amount would create an NOL for
of the loss or the prior year), the applicable
2009
43 Los Angeles, Monterey, Placer County Wildfires
that taxable year. If the disaster loss deduction
NOL carryback and carryforward rules for
2010
42 Baja California (Imperial County) Earthquake
creates an NOL in the year of the loss, the
the taxable year the NOL was created would
2010
41 Humboldt County Earthquake
applicable NOL carryback and carryforward
apply. The taxpayer must carryback the NOL
2009
40 Santa Barbara Wildfires
rules for the taxable year the NOL was created
attributable to the disaster loss for two years or
2008
39 Southern California Wildfires 10/08, 11/08
would apply. The taxpayer must carryback
elect to carryforward the NOL for 20 years.
2008
38 Humboldt County Wildfire
the 2017 NOL attributable to the disaster loss
2008
37 California Wildfires 2008
Column (c) – Enter the type of NOL from the
for two years or elect to waive the carryback
2007
36 Riverside County Winds
NOL Carryover table on page 6. If using an
period and carryforward the NOL for 20 years.
2008
35 Inyo Complex fire
economic development area (EDA) NOL, get
2007
The taxpayer computes the NOL carryback
the applicable form for the NOL type.
2007
34 Southern California Wildfires
in Part IV or makes the election to waive the
2007
33 Santa Barbara and Ventura County Fires
Column (d) – Enter the Current Year NOL
carryback period and carryforward the NOL
2007
32 El Dorado County Wildfires
amount related to the Year of loss you entered
in Part I, Section C. If the taxpayer still has
2007
31 California Severe Freeze: 01/07
in column (a) on the same line. If you are
remaining disaster NOL after applying the
2006
30 Riverside and Ventura County Wildfires
a resident, this is the amount from your
two-year carryback, replace the amount in
2006
29 San Bernardino County Wildfires
FTB 3805V, Part I, Section A, line 25. If you are
column (h) with the disaster NOL carryover
2006
28 Northern California flooding, mudslides, and
a nonresident or part-year resident, this is the
amount from Part IV, line 3, column (i).
landslides 03/06 to 04/06
amount from Part I, Section B, line 25.
2006
27 Northern California flooding, mudslides, and
However, if you elected under IRC Section 165 (i)
2005
landslides 12/05 to 01/06
Column (e) – Enter the amount from your
to claim your 2017 disaster loss on your
2004
26 Shasta County WildFires
2016 form FTB 3805V, Part III, column (h).
2016 return and had a remaining disaster loss
2005
25 Southern California flooding, debris flows,
You should have already applied the applicable
amount after the disaster loss deduction, the
2004
and mudslides
percentage to any remaining disaster loss
remaining disaster loss amount would create
2004
24 San Joaquin Levee Break
carryover. See General Information B, NOLs for
an NOL to which the applicable NOL carryback
2003
23 San Simeon Earthquake
more information.
and carryforward rules for the taxable year
2003
22 Southern California Fires and other related
casualties
Column (f) – Enter the smaller of the amount
the NOL was created would apply. You must
* For taxable years beginning on or after
in column (e) or the balance in column (g).
carryback the remaining NOL attributable to the
January 1, 2014, and before January 1, 2024,
If column (g) of the previous line has been
disaster loss for two years or elect to waive the
taxpayers may deduct a disaster loss for
reduced to zero, your remaining NOL carryover
carryback period and carryforward the NOL for
Governor declared disasters. For these
may be eligible for carryover to 2018. See
20 years. If you elected to waive the two year
Governor declared disasters, subsequent
General Information B, NOLs.
carryback period and carry the NOL forward,
state legislation is not required to activate
enter the remaining disaster loss on your 2017
Column (g) – Subtract column (f) from the
the disaster loss provisions. Any law that
form FTB 3805V in Part III, line 2, column (e).
balance in column (g) of the previous line and
suspends, defers, reduces, or otherwise
enter the result.
Line 4 – If you have a current year NOL from
diminishes the deduction of a NOL shall not
more than one source/type, list each loss
Column (h) – Subtract the amount in
apply to a NOL attributable to these specified
separately.
column (f) from the amount in column (e)
disaster losses. For more information,
and enter the result. After the initial five year
If you operate one or more new businesses
see R&TC Section 17207.14 or the NOL
disaster loss carryover, apply the applicable
and one or more eligible small businesses, the
Carryover table.
percentage to any remaining disaster loss
following rules apply. Determine the amount of
**Carryover period and percentage are limited
carryover. See General Information B, NOLs for
the loss attributable to the new business(es)
to the NOL rules. No special state legislation
more information.
and to the eligible small business(es). Then
was enacted.
take the NOL in the following order:
Current Year NOLs
*** The Santa Cruz County Severe Storms
y The new business NOL.
If a disaster loss occurs between the date of
(occurred in March 2011); the Los Angeles
y The eligible small business NOL.
the publication and the end of the taxable year,
and San Bernardino County Severe Winds
y Any remaining NOL (treat as an NOL under
go to ftb.ca.gov and search for disaster loss
(occurred in November 2011); and the
the general rules).
for individuals, for the updated disaster chart.
San Diego County Wildfires (occurred in
Column (b) and Column (c) – See the
Then follow the line 3 instructions.
May 2014); disaster loss deductions are
instructions for line 2. Do not enter Current
allowed at 100% in the year the loss was
Line 3 – Current Year Disaster Loss
Year Disaster NOLs on line 4.
incurred or taxpayers can elect to deduct the
If you deduct the current year disaster loss on
Line 5 – NOL carryover – Total the carryover
disaster loss in the prior year return under
the current year tax return (did not elect IRC
amounts from column (h) that are NOT the
IRC Section 165(i). Any provision of law
Section 165(i)), use line 3 to claim your 2017
result of a disaster loss.
that suspends, defers, reduces, or otherwise
disaster loss in the current taxable year.
diminishes the deduction of an NOL does
not apply to an NOL attributable to these
four counties. See R&TC Sections 17207.11,
17207.12, and 17207.13 for more information.
Page 4 FTB 3805V Instructions 2017
Part IV – NOL Carryback
Column (d) – If you are a resident, enter
Column (g) – Enter the amount from line 3,
the Current year NOL amount from Part I,
column (f) or line 2, whichever is less. This
Line 3
Section A, line 25. If you are a nonresident
is the amount of 2017 NOL carryback used
General rule: The 2017 NOL must be carried
or part-year resident, enter the amount from
for 2016. Also, enter this amount on the
back to the second preceding taxable year
Part I, Section B, line 25(e).
2016 Form 540X, line 2e and on the 2016
before the loss year. Any loss not used in the
amended schedules/return: Schedule CA (540),
Column (e) – Enter the amount from line 3,
second preceding taxable year is then carried
line 21(d); Schedule CA (540NR), line 21(d);
column (d) or line 1, whichever is less. This
to the first preceding taxable year. Any loss not
or Form 541, line 15a. If the NOL carryback
is the amount of the 2017 NOL carryback
applied in the two preceding years is carried
is attributable to a disaster loss, enter this
used for 2015. Also, enter this amount on
forward.
amount on Schedule CA (540), line 21(b) or
the 2015 Form 540X, line 2e and on the 2015
Column (b) – If the loss is from a new
Schedule CA (540NR), line 21(b).
amended schedules/return: Schedule CA (540),
business or eligible small business, enter
line 21(d); Schedule CA (540NR), line 21(d);
If the current year NOL is comprised of more
the SIC Code for the new business or eligible
or Form 541, line 15a. If the NOL carryback
than one type of loss, list each loss separately.
small business from the Standard Industrial
is attributable to a disaster loss, enter this
To compute the amount of taxable income
Classification Manual.
amount on Schedule CA (540), line 21(b) or
available for offset by the NOL carryback,
If this is a farming enterprise, enter the
Schedule CA (540NR), line 21(b).
reduce the amount on line 2, 2016 taxable
agricultural activity code from federal
income, by the amount of column (g)
If the current year NOL is comprised of more
Schedule F.
carryback used for the first type of loss and
than one type of loss, list each loss separately.
all subsequent types of losses. The total
If the loss is from a pass-through entity, such
To compute the amount of taxable income
amount of NOL carryback used in column (g)
as a partnership, S corporation, or limited
available for offset by the NOL carryback,
should not exceed the 2016 taxable income
liability company (LLC), enter the partnership’s
reduce the amount on line 1, 2015 taxable
from line 2.
FEIN, the California corporation number, or the
income, by the amount of column (e)
LLC’s California Secretary of State file number
carryback used for the first type of loss and all
Column (h) – Subtract column (g) from
from Schedules K-1 (100S, 565, or 568).
subsequent types of losses. The total amount
column (f).
of NOL carryback used in column (e) should
If the loss is due to a disaster, enter the
Column (i) – Subtract the sum of column (e)
not exceed the 2015 taxable income from
disaster code from the list of Declared
and column (g) from column (d).
line 1.
Disasters on pages 3 and 4.
Column (f) – Subtract column (e) from
column (d).
NOL Carryback
Type of NOL and Description
Taxable Year NOL Incurred
NOL Carried Back shall not exceed Carryback Period
General (GEN), New Business (NB), and Eligible Small Business (ESB)
On or after 01/01/2013 and
50%
2 Years
NOLs incurred in taxable years beginning on or after January 1, 2013, are
before 01/01/2014
carried back to each of the preceding two taxable years. The allowable NOL
carryback percentage varies.
For more information, see R&TC Section 17276.20 and get FTB Legal Ruling
On or after 01/01/2014 and
2011-04 (see Situation 3).
75%
2 Years
before 01/01/2015
NOL attributable to a qualified disaster loss (DIS)
For taxable years beginning on or after January 1, 2013, if the disaster loss
deduction creates an NOL (whether in the year of the loss or the prior year),
On or after 01/01/2015
100%
2 Years
the applicable NOL carryback rules for the taxable year the NOL was created
would apply.
FTB 3805V Instructions 2017 Page 5
ADVERTISEMENT

Download Instructions for Form FTB3805V "Net Operating Loss (Nol) Computation and Nol and Disaster Loss Limitations - Individuals, Estates, and Trusts" - California

480 times
Rate
(4.4 / 5) 29 votes