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California depreciation for 1120 C tax assumptions

California doesn't conform to MACRS or ACRS depreciation methods for 1120 C Corporations, except to the extent that such depreciation is passed through from a partnership or LLC classified as a partnership. Also for 1120 C Corporations, California conforms to useful asset lives (the middle asset guide period) in IRS Revenue Procedure 83-35. For the most part, the calculation of the California AMT and California ACE depreciation treatments for 1120 C Corporations don’t follow the Internal Revenue Code.

Building the California treatments for all assets

You can build the CA, CA AMT, and/or CA ACE treatments for all assets at once based on asset information entered in the Tax treatment.
The CA treatments can be built for all assets at once in the following ways.
  • In the
    Setup
    ,
    Treatments
     window, select
    CA treatment
    , then
    Build
    . With the
    Build based on values entered in the Tax treatment
     option selected, choose to either build for all assets or where the treatment is blank.
  • When the California return is added to an UltraTax/1120 C corporate client, the CA, CA AMT, and CA ACE treatments will be turned on and built automatically.
  • When the situs for an asset is changed to CA in one of the following windows:
    • Asset Detail
    • Setup
      ,
      Situses
    • Edit
      ,
      Reassign Assets
    • Setup
      ,
      Activities
    Or when the state for a multi-unit activity in UltraTax CS changes, the CA, CA AMT, and CA ACE treatments will be turned on and built automatically.
During the build, these treatments are set up to follow CA Reg. 24349, California R&TC Sections 24349 - 24354, and the instructions for California Schedule P (100) or California Schedule P (100W) as closely as possible.
The CA depreciation lives conform to the asset guideline classes and periods within IRS Revenue Procedure 83-35. To determine an asset's depreciation life, the application uses the value entered in the
PPT type - CA
 field to determine which guideline class each asset belongs to. If that association is not turned on, is blank, or
Exempt
 is entered, a determination of the asset class can't be completed and the life from the Tax treatment will be used. Then, based on other asset information, the application enters the method for the CA treatment. ("Other asset information" includes whether the asset is marked as Real Property and/or it is marked as used property on the Other tab, and the Method that was entered in the Tax treatment.)

The California treatment that is generated when an individual asset is entered

For CA treatments within 1120 C Corporations, the Method/Life Wizard will complete the
Life
 field following IRS Revenue Procedure 83-35 (CA Reg. 24349) and the
Method
 field following California R&TC Sections 24349 - 24354.
CA AMT and CA ACE treatments for 1120 C corporations will be generated automatically following the instructions for California Schedule P (100) or California Schedule P (100W).
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