California S Corporation Depreciation and Amortization

S Corporation Depreciation and Amortization
2023 Schedule B (100S) S Corporation Depreciation and Amortization
TAXABLE YEAR

2023

S Corporation Depreciation
and Amortization

CALIFORNIA SCHEDULE

B (100S)

For use by S corporations only. Attach to Form 100S.
Corporation name

Part I

California corporation number

Depreciation. Use additional sheets if necessary.

1 Enter federal depreciation from federal Form 4562, line 22.
IRC Section 179 expense deduction is not included on this line. Get federal Form 4562 instructions . . . . . . . . . . . . . . . . . . . .
California depreciation:
(a)
Description of property

(b)
Date acquired
(mm/dd/yyyy)

(c)
Cost or other basis

(d)
(e)
Depreciation allowed or Depreciation
allowable in earlier years method

00

1
(f)
Life or
rate

(g)
Depreciation
for this year

2

3 Add the amounts on line 2, column (g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4 Subtract line 3 from line 1. If negative, use brackets. Enter here and on the applicable line of Form 100S, Side 6, Schedule K.
5 Enter IRC Section 179 expense deduction here and on Form 100S, Side 2, line 12. Do not enter more than $25,000 . . . . . . .

3
4
5

00
00
00

1 Enter federal amortization from federal Form 4562, line 44 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
California amortization:

1

00

Part II

Amortization. Use additional sheets if necessary.

(a)
Description of property

(b)
Date acquired
(mm/dd/yyyy)

(c)
Cost or other basis

(d)
Amortization allowed or
allowable in earlier years

(e)
Code Section

(f)
Period or
percentage

(g)
Amortization
for this year

2

3 Add the amounts on line 2, column (g) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
4 California amortization adjustment. Subtract line 3 from line 1. If negative, use brackets. Enter here and on the
applicable line of Form 100S, Side 6, Schedule K . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

Part III

1

Depreciation and Amortization Adjustment

Combine the amounts on Part I, line 4, and Part II, line 4. Enter here (if negative, use brackets) and on
Form 100S, Side 1, line 5. For passive activities, see instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General Information
In general, for taxable years beginning on or after
January 1, 2015, California law conforms to the
Internal Revenue Code (IRC) as of January 1,
2015. However, there are continuing differences
between California and federal law. When
California conforms to federal tax law changes,
we do not always adopt all of the changes made
at the federal level. For more information, go to
ftb.ca.gov and search for conformity. Additional
information can be found in FTB Pub. 1001,
Supplemental Guidelines to California
Adjustments, the instructions for California
Schedule CA (540), California Adjustments –
Residents, or Schedule CA (540NR), California
Adjustments – Nonresidents or Part-Year
Residents, and the Business Entity tax booklets.
The instructions provided with California tax
forms are a summary of California tax law
and are only intended to aid taxpayers in
preparing their state income tax returns. We
include information that is most useful to the
greatest number of taxpayers in the limited
space available. It is not possible to include
all requirements of the California Revenue
and Taxation Code (R&TC) in the instructions.
Taxpayers should not consider the instructions
as authoritative law.

A Purpose
Use Schedule B (100S), S Corporation
Depreciation and Amortization, to calculate
depreciation and amortization for California tax
purposes.
S corporations must continue calculating the
California depreciation deduction for assets
placed in service before January 1, 1987, in the
same manner as in prior years. The following
were the most common methods used to
calculate depreciation for years prior to 1987:
• Straight-line
• Declining balance
• Sum-of-the-years digits
For assets placed in service in 1987 and after,
S corporations may use the same method for
California as was used for federal purposes.
Depreciation for S corporations follows the
depreciation rules provided under California
Personal Income Tax Law. Unlike other
corporations, an S corporation is allowed
to compute depreciation using the Modified
Accelerated Cost Recovery System (MACRS).
B Federal/State Differences
Differences between federal and California
laws affect the calculation of depreciation

7711233

3

00

4

00

1

00

and amortization. The following lists are not
intended to be all-inclusive of the federal and
state conformities and differences. For more
information, refer to the R&TC.
California law conforms to federal law for the
following:
• The inclusion of sport utility vehicles (SUVs)
and minivans built on a truck chassis in the
definition of trucks and vans when applying
the 6,000 pound gross weight limit.
• The useful life of seven years of any Alaska
natural gas pipeline property.
• The income forecast method and the
exemption of limits on depreciation for
incremental costs of clean fuel vehicles.
California law does not conform to federal law
for the following:
• The federal modifications to amortization of
research and experimental expenditures (IRC
Section 174).
• The first-year depreciation deduction allowed
for new luxury autos or certain passenger
automobiles acquired and placed in service in
2010 through 2023.
• California does not conform to the federal
modifications to depreciation limitations on
luxury automobiles (IRC Section 280F).

Schedule B (100S) 2023 Side 1

Depreciation limitations for passenger
automobiles (that are not trucks or vans)
placed in service in the calendar year 2023:
Tax Year
1st Tax Year
2nd Tax Year
3rd Tax Year
Each Succeeding Year

Amount
$3,860
$6,100
$3,650
$2,175

Depreciation limitations for trucks and vans
placed in service in the calendar year 2023:
Tax Year
1st Tax Year
2nd Tax Year
3rd Tax Year
Each Succeeding Year

•
•
•

•
•

•

•

Amount
$4,260
$6,800
$4,050
$2,475

For lease inclusion indexing amounts, go to
ftb.ca.gov/forms/search and enter lease
inclusion.
IRC Section 168(k) relating to the
depreciation deduction for certain assets.
The enhanced IRC Section 179 expensing
election.
The expanded definition of IRC Section 179
property for certain depreciable tangible
personal property related to furnishing
lodging and for qualified real property for
improvements to nonresidential real property.
IRC Section 613A(d)(4) relating to the
exclusion of certain refiners.
The federal changes regarding treatment
of distribution costs and treatment of
participations and residuals for purpose of
computing depreciation under the income
forecast method.
For years prior to 1987, California did
not allow depreciation under the federal
accelerated cost recovery system (ACRS).
California also does not allow depreciation
under MACRS for assets placed in service
while the S corporation was taxed as a
C corporation. This is a change of accounting
method for which the taxpayer must request
the Franchise Tax Board’s consent.
The ten-year useful life for grapevines
planted as replacements for vines subject to
Phylloxera or Pierce’s disease. California law
allows a useful life of five years. See R&TC
Section 17250 for additional information.

Specific Line Instructions
Part I – Depreciation

Election to Expense Certain Property Under
IRC Section 179
The S corporation may elect to expense part of
the cost of depreciable personal property used in
the trade or business and certain other property
described in federal Pub. 946, How to Depreciate
Property. To do so, the S corporation must
have purchased property, as defined in the IRC
Section 179(d)(2), and placed it in service during
the taxable year, or have a carryover of unused
cost from prior year. If the S corporation elects
this deduction, it must reduce the California
depreciable basis by the IRC Section 179
expense. The total IRC Section 179 expense
deduction cannot exceed the S corporation’s
business income.

Page 2

Schedule B (100S) Instructions 2023

California law does not conform to the federal
limitation amounts under IRC Section 179(b)(1)
and (2). For California purposes, the maximum
IRC Section 179 expense deduction allowed is
$25,000. This amount is reduced if the cost of
all IRC Section 179 property placed in service
during the taxable year is more than $200,000.
Complete the Tangible Property Expense
Worksheet below to figure the IRC Section 179
expense for California purposes. Include all
assets qualifying for the deduction because the
limit applies to all qualifying assets as a group
rather than to each asset individually. Get federal
Form 4562, Depreciation and Amortization, for
more information.
IRC Section 195 Start-up Expenditures
California conforms to the federal deduction for
business start-up and organizational costs.

Definitions
Listed Property – Use a format similar to federal
Form 4562, Part V, line 26 to determine the
elected IRC Section 179 cost of listed property.
Listed property generally includes the following:
• Passenger automobiles weighing 6,000
pounds or less.
• Any other property used for transportation
if the nature of the property lends itself to
personal use, such as motorcycles, pick-up
trucks, SUVs, etc.
• Any property used for entertainment or
recreational purposes (such as photographic,
phonographic, communication, and video
recording equipment).
• Computers or peripheral equipment.
Exception. Listed property generally does not
include:
• Photographic, phonographic, communication,
or video equipment used exclusively in the
S corporation’s trade or business.
• Any computer or peripheral equipment used
exclusively at a regular business.
• An ambulance, hearse, or vehicle used for
transporting persons or property for hire.

Listed property used 50% or less in business
activity does not qualify for the IRC Section 179
expense deduction. For more information
regarding listed property, get the instructions for
federal Form 4562.
Business Income – The total cost the
S corporation can deduct is limited to the
S corporation’s business income. For the
purpose of the IRC Section 179 election,
business income is the net income derived from
the S corporation’s active trade or business.
Net income is from Form 100S, Side 2, line
14, before the IRC Section 179 expense
deduction and excludes items not derived from
a trade or business actively conducted by the
S corporation.

Part II – Amortization
California conforms to the IRC Section 197
amortization of intangibles. Generally, assets that
meet the definition under IRC Section 197 are
amortized on a straight-line basis over 15 years.
There may be differences in the federal and
California amounts for intangible assets acquired
in taxable years beginning prior to January 1,
1994. Refer to R&TC Section 17279 pursuant to
R&TC Section 23802(f)(1) for more information.

Part III – Depreciation and
Amortization Adjustment
If the S corporation has direct ownership of a
passive activity, complete a separate Schedule B
(100S), write “Passive Activity” on the top of
Schedule B (100S), and enter the current year
depreciation adjustment on Part III. Also, enter
the current year depreciation adjustment on form
FTB 3801, Passive Activity Loss Limitations,
Side 2, California Passive Activity Worksheet,
column (e). Make sure to label “Schedule B
(100S)” in column (c) of the California Passive
Activity Worksheet. Do not enter the current
taxable year depreciation adjustment for passive
activity on Form 100S, Side 1, line 5.
The S corporation does not need to complete
Schedule B (100S) for pass-through entities
except to include IRC Section 179 expense.

Tangible Property Expense Worksheet
1 Maximum deduction under IRC Section 179 for California . . . . . . . . . . . . . . . . . . . . . .
2 Total cost of IRC Section 179 property placed in service . . . . . . . . . . . . . . . . . . . . . . .
3 Threshold cost of IRC Section 179 property before reduction in limitation . . . . . . . . . .
4 Reduction in limitation. Subtract line 3 from line 2. If zero or less, enter -0- . . . . . . . .
5 Dollar limitation for taxable year. Subtract line 4 from line 1.
If zero or less, enter -0- . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
(a) Description of property

(b) Cost

1
2
3
4
5

(c) Elected cost

6
7
8
9
10
11
12

Listed property (elected IRC Section 179 cost) . . . . . . . . . . . . . . 7
Total elected cost of IRC Section 179 property. Add line 6, column (c) and line 7 . . . . 8
Tentative deduction. Enter the smaller of line 5 or line 8 . . . . . . . . . . . . . . . . . . . . . . . 9
Carryover of disallowed deduction from 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Enter the smaller of business income (not less than -0-) or line 5 . . . . . . . . . . . . . . . . 11
IRC Section 179 expense deduction for California. Add line 9 and line 10, but do not
enter more than line 11. Also enter the result here and on Schedule B (100S),
Part I, line 5 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
13 Carryover of disallowed deduction to 2024.
Add line 9 and line 10. Subtract line 12 from the result . . . . . . . 13

25,000
200,000