3885L: Depreciation and Amortization (2025)
California · FTB · Used for tax years 2025
California Form 3885L calculates depreciation and amortization deductions for Form 568, Limited Liability Company Return of Income. It reports California depreciation and amortization amounts, the IRC Section 179 expense deduction, and any disallowed deduction carried over to 202
Who files this form
Limited liability companies (LLCs) use Form FTB 3885L to calculate depreciation and amortization allowed as a deduction 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:
- The name shown on the return, California Secretary of State file number, and FEIN.
- For assets placed in service during 2025: property descriptions, dates placed in service, cost or other basis, depreciation methods, useful lives or rates, and current-year depreciation amounts.
- For property being amortized: the applicable code section, amortization period or percentage, and current-year amortization amount.
- California depreciation and amortization totals for assets placed in service before 2025, 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 2024, and the information needed for the worksheet’s income limitation.
For listed property, the 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 give a mailing address or e-file instructions.
- Report assets and property placed in service during 2025 on line 1.
- Enter California depreciation for assets placed in service before 2025 on line 2, and California amortization for earlier intangibles on line 4.
- Combine the depreciation and amortization totals on line 6. Report the total on Form 568, Schedule B, line 17a, if it is from a trade or business, or on federal Form 8825, line 14, if it is from rental real estate activities.
- Transfer the Section 179 worksheet’s line 12 deduction to Form FTB 3885L, line 7, and Schedule K (568), line 12. Transfer the worksheet’s line 13 carryover to Form FTB 3885L, line 8.
Common mistakes
- Using federal amounts without checking California differences. The form reminds you to adjust for basis differences when calculating both depreciation and amortization.
- Depreciating land. The text states that land is not depreciable.
- Using federal Section 179 rules without California adjustments. California does not conform to the enhanced federal Section 179 expensing election or the expanded definition of certain qualifying property.
- Combining multiple activities without separate calculations. If depreciation or amortization comes from more than one trade or business activity, or more than one rental real estate activity, the LLC should compute depreciation separately for each activity.
- Using federal depreciation amounts on Form 8825. The text specifically directs you to use California amounts on line 14.
Questions people ask
What is the difference between depreciation and amortization?
Depreciation is an annual deduction that recovers 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.
Can I use the same depreciation amounts as on my federal return?
Not always. California and federal rules can differ, including the basis used to calculate depreciation and the recovery period. The form directs you to account for these differences.
Where do I report assets placed in service before 2025?
Enter their California depreciation on line 2. Enter California amortization for intangibles placed in service before 2025 on line 4.
What Section 179 limits appear in the 2025 worksheet?
The worksheet lists a maximum dollar limitation of $25,000 and a property-cost threshold of $200,000. It also applies a reduction in the dollar limitation and an income limitation. The text states that the limitations apply to the LLC and each member.
Where do I report a disallowed Section 179 deduction carried forward to 2026?
Calculate the carryover on line 13 of the Section 179 worksheet and enter it on Form FTB 3885L, line 8.