3885L: Depreciation and Amortization (2024)
California · FTB · Used for tax years 2024
California Form 3885L calculates depreciation and amortization deductions for Form 568, Limited Liability Company Return of Income. It reports California depreciation and amortization totals, the Section 179 expense deduction, and any disallowed deduction carried over to 2025.
Who files this form
Limited liability companies (LLCs) use Form FTB 3885L to calculate depreciation and amortization allowed as deductions on Form 568, Limited Liability Company Return of Income. Attach Form FTB 3885L to Form 568.
What you'll need
Have the following information available to complete the form:
- The name shown on the return, California Secretary of State file number, and FEIN.
- For assets placed in service during the 2024 taxable year: property descriptions, dates placed in service, costs or other basis, depreciation methods, useful lives or rates, and applicable amortization code sections and periods or percentages.
- California depreciation and amortization amounts for assets placed in service before the 2024 taxable year, including adjustments for California basis and tax-law differences.
- If claiming a Section 179 deduction: property costs, elected costs, any disallowed deduction carried over from 2023, and the income information required by the worksheet.
For listed property, the Section 179 worksheet refers to federal Form 4562, Part V, line 29, with adjustments for California law and basis differences.
How to file
Attach the completed Form FTB 3885L to Form 568. The supplied text does not provide a mailing address or e-file directions.
- Enter total depreciation and amortization on line 6. For trade or business amounts, also enter the total on Form 568, Schedule B, line 17a. For rental real estate activities, use California amounts on federal Form 8825, line 14.
- Enter the Section 179 worksheet's line 12 deduction on Form FTB 3885L, line 7, and Schedule K (568), line 12.
- Enter the worksheet's line 13 carryover to 2025 on Form FTB 3885L, line 8.
Common mistakes
- Ignoring California basis differences. The form reminds you to adjust for basis differences when calculating both depreciation and amortization.
- Using federal amounts without checking California rules. California does not conform to all federal depreciation and amortization rules, including the enhanced Section 179 expensing election.
- Depreciating land. The text specifically states that land is not depreciable.
- Combining multiple activities without separate calculations. If amounts come from more than one trade or business activity, or more than one rental real estate activity, the LLC should separately compute depreciation for each activity. Report each activity's net income on an attachment to Schedule K-1 (568).
- Overlooking member-level Section 179 limits. The text states that the limitations apply to both the LLC and each member.
Questions people ask
What is the difference between depreciation and amortization?
Depreciation is an annual deduction to recover the cost or other basis of business or income-producing property with a determinable useful life of more than one year. Amortization recovers the cost of certain capital expenses over a fixed period.
Where do I report assets placed in service before 2024?
Enter California depreciation for those assets on line 2 and California amortization for those intangibles on line 4. Account for differences in basis and California and federal tax law.
What Section 179 limits appear in the 2024 worksheet?
The worksheet lists a maximum dollar limitation of $25,000 and a property-cost threshold of $200,000. It also applies a reduction based on property cost and an income limitation, so the allowed deduction may be lower.
Is a separate California election needed for Section 197 intangibles?
No. Property classified as Section 197 property under federal law is also Section 197 property for California purposes. No separate California election is required or allowed.