Instructions for Form 100W - FormSend

Controlled Foreign Corporations, included inthis booklet, to compute the amount to enteron line 7a.Line 7b – Income not included in federalconsolidated returnUse this line to report the net income fromcorporations included in the combined reportbut not included in the federal consolidatedreturn.Line 8 – Other additionsR&TC Section 24425 disallows expensesallocable to income, which is not included inthe measure of the Franchise Tax or IncomeTax. Add back such deductions on this line.Also, any miscellaneous items that must beadded to arrive at net income after stateadjustments (line 18) should be shown on thisline. Attach a schedule to itemize amounts. Ifany federal contribution deduction reduced theamount entered on Form 100W, Side 1, line 1,enter that amount on this line.California ordinary net gain or loss. Enter anyCalifornia ordinary net gain or loss fromSchedule D-1, Sales of Business Property.Attach Schedule D-1.Line 10 and Line 11 – DividendsComplete Schedule H (100W), DividendIncome Deduction, included in this booklet.Foreign Investment Interest OffsetR&TC Section 24344(c) provides that interestexpense incurred for purposes of foreigninvestment is offset against the water’s-edgedividends deductible under R&TCSection 24411. The offset cannot be greaterthan the deduction allowed pursuant to R&TCSection 24411. Complete and attach formFTB 2424, Water’s-Edge Foreign InvestmentInterest Offset, to the return. For moreinformation, see R&TC Section 24344(c) andthe instructions for form FTB 2424.Line 13 – Federal capital gain net incomeEnter the federal capital gain net income fromfederal Form 1120 or Form 1120A, line 8. TheCalifornia net capital gain should have beenadded to income on line 5.Line 14 – ContributionsThe contribution deduction for a Californiacorporation is limited to the adjusted basis ofthe assets being contributed.For taxable years beginning on or afterJanuary 1, 1996, the contribution deduction islimited to 10% of California net income.Carryover provisions per IRCSection 170(d)(2) apply for excess contributionsmade during taxable years beginning onor after January 1, 1996.On a separate worksheet, using theForm 100W format, complete Form 100W,Side 1, line 1 through line 18 without regard toline 14, Contributions. If any federal contributiondeduction was taken in arriving at theamount entered on Side 1, line 1, enter thatamount as a positive number on line 8. Enterthe adjusted basis of the assets contributed online 5 of the worksheet. Then complete theworksheet that follows to determine thecontributions to enter on line 14.1. Net income after state adjustmentsfrom Side 1, line 18 . . . . . . . . . . . _____2. Deduction for dividendsreceived . . . . . . . . . . . . . . . . . . . . _____Page 12 Form 100W Booklet 20043. Net income for contributioncalculation purposes. Addline 1 and line 2 . . . . . . . . . . . . . . _____4. Contributions. Multiply line 3by 10% (.10) . . . . . . . . . . . . . . . . _____5. Enter the amount actuallycontributed . . . . . . . . . . . . . . . . . . _____6. Enter the smaller of line 4 orline 5 here and on Side 1, line 14 _____Get Schedule R to figure the contributioncomputation for apportioning corporations.Line 15 – EZ, TTA, or LAMBRA businessexpense and/or EZ net interest deductionBusinesses conducting a trade or businesswithin an Enterprise Zone (EZ), Targeted TaxArea (TTA), or Local Agency Military BaseRecovery Area (LAMBRA) may elect to treat aportion of the cost of qualified property as abusiness expense rather than a capitalexpense. For the year the property is placed inservice, the business may deduct a percentageof the cost in that year rather than depreciate itover the life of the asset. For more information,get form FTB 3805Z; form FTB 3809; or formFTB 3807.Also, a deduction may be claimed on this linefor the amount of net interest on loans made toan individual or company doing businesswithin an EZ. For more information, get formFTB 3805Z.Be sure to attach form FTB 3805Z; formFTB 3809; or form FTB 3807 if any of thesebenefits are claimed. If the proper form is notattached, these tax benefits may be disallowed.Line 16 – Other deductionsInclude on this line deductions not claimed onany other line. Attach a schedule that clearlyshows how each deduction was computed andexplain the basis for the deduction.For corporations subject to income tax (insteadof the franchise tax), interest received onobligations of the federal government and onobligations of the State of California and itspolitical subdivisions is exempt from incometax. If such interest is reported on line 4, itmust be deducted on line 16.Federal ordinary net gain or loss. Enter anyfederal ordinary net gain or loss from federalForm 4797, Sales of Business Property.Line 19 – Net income (loss) for statepurposesIf all corporate income is derived fromCalifornia sources, transfer the amount online 18 directly to line 19.If only a portion of income is derived fromCalifornia sources, complete Schedule Rbefore entering any amount on line 19.Transfer the amount from Schedule R, line 35,to Form 100W, line 19. Be sure to answer“Yes’’ to Question M on Form 100W, Side 2.If this line is a net loss, complete and attachthe 2003 form FTB 3805Q to Form 100W.Line 20, Line 21, and Line 22Note: The order in which line 20, line 21, andline 22 appear is not meant to imply the orderin which any NOL carryover deduction ordisaster loss deduction is to be taken if morethan one type of deduction is available.Line 20 – Net operating loss (NOL) carryoverdeductionThe NOL carryover deduction is the amount ofthe NOL carryover from prior years that maybe deducted from income in the currenttaxable year.If line 19 is a positive amount, enter the NOLcarryover from the 2004 form FTB 3805Q,Part III, line 3 on Form 100W, line 20. The lossmay not reduce current year income belowzero. Any excess loss must be carried forward.Attach a copy of the 2004 form FTB 3805Q toForm 100W.If the full amount of the NOL carryover maynot be deducted this year, complete and attacha 2004 form FTB 3805Q showing the computationof the NOL carryover to future years.If line 19 is a negative amount, corporationsmay not claim an NOL carryover deduction.Enter -0- on line 20. See the 2004 formFTB 3805Q instructions to compute the NOLcarryover to future years.If the corporation terminates its election to betaxed as an S corporation, thus becoming aC corporation, then only that portion of theprior NOL carryover incurred while it hadC corporation status may be used to the extentit has not expired.Line 21 – Pierce’s disease, EZ, LARZ, TTA,or LAMBRA NOL carryover deductionAn NOL generated by a farming business dueto Pierce's Disease or a business that operates(operated) or invests (invested) within an EZ,the former LARZ, the TTA, or a LAMBRAreceives special tax treatment. The loss maynot reduce the corporation's current yearincome below zero. Any excess loss must becarried forward. Compute the corporation'sPierce's Disease, EZ, TTA, or LAMBRA NOLusing form FTB 3805D; form FTB 3805Z; formFTB 3809; or form FTB 3807.Enter the Pierce's Disease, EZ, TTA, LARZ, orLAMBRA NOL carryover deduction from thecorporation's form FTB 3805D; formFTB 3805Z; form FTB 3809; form FTB 3807; orform FTB 3806, on Form 100W, line 21. Attacha copy of form FTB 3805D; form FTB 3805Z;form FTB 3809; form FTB 3807; or formFTB 3806 to the Form 100W.Line 22 – Disaster loss carryover deductionIf you have a disaster loss carryover deduction,enter the total amount from the 2004 form FTB3805Q, Part III, line 1, only if you have incomein the current year. The loss may not reducecurrent year income below zero. Any excessloss must be carried forward.Line 24 – TaxUse rates listed in General Information B, TaxRates, and C, Minimum Franchise Tax.Line 25 through Line 27 – Tax creditsA variety of tax credits are available toCalifornia corporations to reduce tax. However,corporations may not reduce the tax (line 24)below the minimum franchise tax, if applicable.Also, the amount of the credit that a corporationis allowed to claim may be limited.Generally, if the corporation completed federalForm 4626, Alternative Minimum Tax —Corporations, the corporation may have limitedcredits. Complete Schedule P (100W),included in this booklet, to compute thislimitation.Corporations claiming the following credits arenot subject to the TMT limitation:• Enterprise zone hiring & sales or use taxcredit;• LARZ construction hiring & sales or use taxcredit carryover;