Schedule D-1: Sales of Business Property (2025)
California · FTB · Used for tax years 2025
California Schedule D-1 reports gains and losses from sales or exchanges of business property and involuntary conversions. It also calculates recapture amounts under IRC Sections 179 and 280F(b)(2).
Who files this form
Complete and attach the 2025 California Schedule D-1 to your tax return only if your California gains or losses are different from your federal gains or losses.
The schedule covers sales of business property, involuntary conversions, and recapture amounts under IRC Sections 179 and 280F(b)(2).
What you'll need
Have the following information and forms available, as applicable:
- Your name as shown on your tax return and the identifying number requested on the schedule.
- Property descriptions, acquisition and sale dates, gross sales prices, cost or other basis, improvements, and selling expenses.
- Depreciation or depletion amounts allowed or allowable.
- Federal Forms 1099-B or 1099-S, or substitute statements, showing 2025 proceeds included on the schedule.
- Federal Form 4684 for casualty and theft amounts.
- Form FTB 3805E for installment sale gains.
- Federal Form 8824, completed using California amounts, for like-kind exchanges.
- Federal Schedule 1 (Form 1040), line 4, for individuals completing the ordinary gain or loss adjustment.
- Prior-year nonrecaptured net IRC Section 1231 losses and expense or recovery deduction amounts needed for any recapture calculation.
How to file
Attach the completed Schedule D-1 to your tax return if your California gains or losses differ from your federal gains or losses.
The supplied form does not give a mailing address or e-file instructions.
Common mistakes
- Attaching the schedule when it is not needed: The form says to complete and attach it only if California gains or losses differ from federal gains or losses.
- Reporting casualty and theft conversions in the wrong place: The form directs you to use federal Form 4684 to report involuntary conversions from casualty and theft.
- Completing the individual-only adjustment section for another type of return: Part II, Section B is only for individual returns filed on Forms 540 and 540NR.
- Totaling Part III too early: Complete property columns A through D for lines 23 through 32b before going to line 33.
- Completing the IRC Section 1252 section when it does not apply: Skip it if you did not dispose of farmland or if the form is being completed for a partnership.
Questions people ask
Do I need Schedule D-1 if my California and federal gains or losses are the same?
No. The form says to complete and attach the schedule only if those amounts are different.
Where does the form include property held one year or less?
Part II, Section A, line 10 includes property held one year or less when reporting ordinary gains and losses not included on lines 11 through 16.
How is gain or loss calculated on lines 2 and 10?
Add the gross sales price in column (d) and depreciation allowed or allowable in column (e). Then subtract column (f), which includes cost or other basis, improvements, and selling expenses.
What is Part IV used for?
Part IV covers recapture amounts under IRC Sections 179 and 280F(b)(2) when business use drops to 50% or less. Line 38 calculates the recapture amount by subtracting line 37 from line 36.