3726: Deferred Intercompany Stock Account (DISA) and Capital Gains Information (2024)
California · FTB · Used for tax years 2024
California Form 3726 reports prior-year and current-year Deferred Intercompany Stock Account (DISA) balances and DISA capital gains recognized during the taxable year. It is attached to Form 100 or Form 100W, with a separate form completed for each corporation that received the d
Who files this form
Form FTB 3726 reports deferred intercompany stock account (DISA) information and DISA capital gains. The form directs filers to complete a separate Form FTB 3726 for each corporation that received the distribution and attach it to Form 100 or Form 100W.
Part I must be filled out completely to satisfy the annual disclosure requirements.
What you'll need
Have the following information ready:
- Corporation details: The distribution recipient’s name and California corporation number.
- Prior-year DISA information: Distributor name, year of deferral, ownership percentages at the time of distribution and currently, beginning DISA balance, and current-year capital contributions.
- Current-year DISA information: Distributor name, ownership percentage, distribution amount, amounts paid out of current and accumulated earnings and profits (E&P), and the amount reducing the basis of the distributor’s stock.
- Gains recognized this year: Distributor name, year of deferral, type of triggering event, DISA balance, recognition ratio, and whether the gain is short-term or involves a partial stock sale.
Attach additional sheets if necessary for any of the three parts.
How to file
Attach the completed Form FTB 3726 to Form 100 or Form 100W. Complete a separate form for each corporation that received a distribution.
- Part I: Report prior-year DISA information. Calculate the ending balance by subtracting current-year capital contributions in column (f) from the beginning balance in column (e).
- Part II: Calculate the current-year DISA balance by subtracting the total of columns (d), (e), and (f) from the distribution amount in column (c).
- Part III: Calculate each recognized capital gain by multiplying the DISA balance in column (d) by the recognition ratio in column (e).
Enter the short-term DISA capital gains total on Part III, line 2, and on Form 100 or 100W, Side 6, Schedule D, Part I, line 1, column (f). Enter the long-term total on Part III, line 3, and on Form 100 or 100W, Side 6, Schedule D, Part II, line 5, column (f).
Common mistakes
Follow these reminders printed on the form:
- Do not combine distribution recipients on one form. Complete a separate form for each recipient corporation.
- Fill out Part I completely to satisfy the annual disclosure requirements.
- Attach additional sheets if necessary.
- In Part III, column (g), check Box A if the gain is short-term and Box B if there was a partial sale of stock.
- Include amounts with Box A checked in the short-term total. Include amounts without Box A checked in the long-term total.
- Attach Form FTB 3726 to Form 100 or Form 100W.
Questions people ask
What does DISA stand for?
DISA stands for Deferred Intercompany Stock Account.
Can I use one form for multiple distribution recipients?
No. Complete a separate Form FTB 3726 for each corporation that received the distribution.
Which part reports current-year DISA balances?
Part II calculates the current taxable year DISA balances that are required to be disclosed.
How do I identify short-term gains and partial stock sales?
In Part III, column (g), check Box A for a short-term capital gain. Check Box B for a partial sale of stock.