565: Partnership Return of Income (2024)
California · FTB · Used for tax years 2024
California Form 565 is the Partnership Return of Income for 2024. It reports partnership income, losses, deductions, taxes, and payments, and calculates any refund or amount due.
What you'll need
Prepare the attachments that apply to your partnership:
- California Schedule K-1 (565) for each partner.
- Schedules showing ordinary income or loss from other partnerships and fiduciaries, other income or loss, and other deductions reported on the return.
- Federal Schedule F (Form 1040) for farm profit or loss.
- FTB 3885P for depreciation and amortization reported on line 17a.
- Federal Form 8825 for rental real estate income or loss on Schedule K.
- Schedule D (565) for short-term or long-term capital gains or losses on Schedule K.
- Federal Form 8886 for each reportable or listed transaction included in the return.
- Federal Form 970 if the partnership adopted the LIFO inventory method during the tax year.
The return also asks for the partnership's FEIN, California Secretary of State file number, accounting method, and financial information. Line 28 identifies Forms 592-B and 593 as sources for withholding amounts.
Common mistakes
- Including nonbusiness items on lines 1a through 22. The form cautions that these lines are only for trade or business income and expenses.
- Leaving the principal business activity code blank. Question K specifically says not to leave it blank.
- Deducting oil and gas depletion on line 18. The form says not to deduct it there.
- Treating line 32 as a total. Line 32 is for use tax and is explicitly marked as not a total line.
- Stapling a payment to the return. The form says to enclose, but not staple, any payment.
- Overlooking the BOE-100-B requirement. A yes answer to the California real-property ownership or transfer questions in Question I requires this statement. The form warns that penalties may apply.
- Using non-California amounts on Schedules M-1 and M-2. These schedules direct you to use amounts under California law.
Questions people ask
Does the partnership need a Schedule K-1 for every partner?
Yes. Question L says to attach a California Schedule K-1 (565) for each partner and enter the maximum number of partners at any time during the year.
Who signs Form 565?
The form provides a signature line for a general partner and a separate signature line for a paid preparer.
Who should a check or money order be payable to?
Make it payable to the Franchise Tax Board. Enclose the payment, but do not staple it.
What if a partner is another partnership or an LLC?
Question O says to complete Schedule K-1, Table 3 for each such partner.
What if this partnership is a partner in another partnership or a multiple-member LLC?
Question Q says to complete Schedule EO, Part I.