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Screen CASale - California Sale of Business Property (1040)

Overview

Use this screen to review information that transferred from the UltraTax CS asset module or federal Sale Screen. All depreciation and amortization information transfers directly into CASale Screen from the asset module when detailed data entry is used or from federal data entry when summary data entry is used and then transfers to the relevant form(s). It is important to report any state-related law differences and details in CASale Screen.
UltraTax CS provides a global option that allows you to specify how you want to enter asset information. You can enter it either in the asset module or in the various depreciation input screens. When you specify that you want to use the asset module as your method of asset data entry, this input screen is not applicable and the tab for this input screen does not appear. Therefore, you must enter a postal code for each asset in depreciation data entry.
All federal Sale Screen information transfers to UltraTax/1040-CA. All units are included in the calculations for total sources. For nonresident and part-year resident returns, only units with postal code
CA
 are included in CA source calculations.
Sale of Section 179 QRP Assets
For federal purposes, property that was elected as Section 179 QRP (Qualified Real Property) is treated as Section 1245 property. California does not conform to Section 179 treatment for QRP. For California purposes, the property is treated as Section 1250 property. Mark the
Section 1250 property
 field in the General Information section when appropriate.
On a sale of an asset where the taxpayer claimed an amount of Section 179 QRP that was equal to the full original cost of the asset, UltraTax CS creates one unit of federal Sale Screen and one unit of CASale Screen.
On a sale of an asset where the taxpayer claimed an amount of Section 179 QRP that was less than the full original cost, UltraTax CS creates two units of federal Sale Screen and two units of CASale Screen. The first federal unit represents Section 1250 property, the portion where there was not a Section 179 election. This unit prorates amounts, such as selling price, according to the ratio of Section 1250 property to Section 1245 property. Unlike the federal screen, full amounts under California law transfer to the first unit of CASale Screen. The second federal unit represents Section 1245 property, the portion that the taxpayer made the Section 179 QRP election for federal purposes. Since California does not recognize this type of property as Section 1245 property, the amounts on the second unit of CASale Screen will be blank.

General Information

Mark this field to indicate that state calculations should ignore information from this unit of the input screen.
For sale of certain Section 179 QRP property, the federal version of UltraTax/1040 may create two units of this screen for the sale. One unit is for the portion of the sale to be treated as Section 1250 property and the other unit is for the portion of the sale to be treated as Section 1245 property. California did not adopt the provision to treat certain real property as eligible for Section 179 election. Thus, for sale of property that was eligible for Section 179 QRP election at the federal level, California treats the entire property from the sale as Section 1250 property and transfers information from the Asset Module accordingly. If there is a unit for Section 1250 property and a related unit for Section 1245 property in the federal version of UltraTax/1040, UltraTax CS creates the same two units of the input screen at the 1040-California level. However, for the unit corresponding to Section 1245 property, if sale is entered via the Asset Module, UltraTax CS automatically marks this field to indicate that the unit should be ignored in state calculations and consequently does not transfer any amounts to the unit.
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