3885P: Depreciation and Amortization (2025)
California · FTB · Used for tax years 2025
California Form 3885P calculates depreciation and amortization deductions for Form 565, Partnership Return of Income. It reports deductions for current-year and earlier assets, the Section 179 expense deduction, and any disallowed deduction carried over to 2026.
Who files this form
Partnerships use Form FTB 3885P to calculate depreciation and amortization allowed as deductions on California Form 565, Partnership Return of Income. Attach Form FTB 3885P to Form 565.
What you'll need
Have these details available to complete the form:
- The partnership’s name as shown on the return, FEIN, and California Secretary of State file number.
- For assets placed in service during 2025: property descriptions, dates placed in service, cost or other basis, depreciation methods, useful lives or rates, and depreciation amounts.
- For property being amortized: the applicable code section, amortization period or percentage, and 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 expense deduction: property costs, elected costs, any disallowed deduction carried over from 2024, and the income information needed for the worksheet.
For listed property, the worksheet directs you to federal Form 4562 and its instructions, with adjustments for California law and basis differences.
How to file
Attach Form FTB 3885P to Form 565. The supplied text does not provide a mailing address or e-file directions.
- On line 1, enter the applicable details for each asset or group of assets placed in service during 2025. Total columns (f) and (i).
- On lines 2 and 4, enter California depreciation and amortization for assets placed in service before 2025.
- Calculate total depreciation on line 3 and total amortization on line 5. Add them on line 6.
- Report the line 6 total on Form 565, Side 2, line 17a, for a trade or business, or on federal Form 8825, line 14, for rental real estate activities. Use California amounts.
- If applicable, transfer the Section 179 worksheet’s line 12 deduction to Form FTB 3885P, line 7, and Schedule K (565), line 12. Transfer the worksheet’s line 13 carryover to Form FTB 3885P, line 8.
Common mistakes
- Overlooking California basis differences. The form reminds you to adjust for basis differences when calculating both depreciation and amortization.
- Assuming federal amounts always apply. California does not conform to all federal depreciation and amortization rules, including the enhanced Section 179 expensing election.
- Combining separate 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 instructions say to compute depreciation separately for each activity and report each activity’s net income on an attachment to Schedule K-1 (565).
- Using federal depreciation amounts for rental real estate without California adjustments. The instructions specifically require California amounts for federal Form 8825, 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 land be depreciated?
No. The text states that land is not depreciable.
Where do I report assets placed in service before 2025?
Report California depreciation on line 2 and California amortization for intangibles on line 4. Account for differences in asset basis and California and federal tax law.
What Section 179 limits appear in the 2025 worksheet?
The worksheet lists a maximum dollar limitation of $25,000 and a threshold property cost of $200,000. It also applies a reduction based on property cost and an income limitation. The instructions state that the limitations apply to the partnership and each partner.
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 3885P, line 8.