California Depreciation and Amortization

Depreciation and Amortization
2023 FORM 3885F Depreciation and Amortization
TAXABLE YEAR

2023

CALIFORNIA FORM

3885F

Depreciation and Amortization

Attach to Form 541, Form 109, or Form 199.
Name as shown on tax return

FEIN

Tangible and intangible assets placed in service during the 2023 taxable year:
(a)
Description of property

(b)
Date placed in
service
(mm/dd/yyyy)

(c)
Cost or other
basis

Depreciation
(d)
(e)
Method of Life or
figuring
rate
depreciation

Amortization

(f)
Depreciation for
this year

(g)
(h)
(i)
Code Period or Amortization for
section percentage
this year

1

Add line 1 column (f) and column (i) amounts. See instructions . . . . . . . . . . . . . . . . . . . . . . . . 1
Depreciation
2 California depreciation for assets placed in service beginning before the 2023 taxable year. . . . . . . . . . . . . . . . . . . . . . . . . . . 2 _________________
Be sure to make adjustments for any basis differences.
3 Total California depreciation. Add line 1(f) and line 2 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 _________________
Amortization
4 California amortization for intangibles placed in service beginning before the 2023 taxable year. . . . . . . . . . . . . . . . . . . . . . . 4 _________________
Be sure to make adjustments for any basis differences.
5 Total California amortization. Add line 1(i) and line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5 _________________
6 Total depreciation and amortization. Add line 3 and line 5. See instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 _________________

General Information

A Purpose

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 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.

Use form FTB 3885F, Depreciation and
Amortization, to compute depreciation
and amortization allowed as a deduction
on Form 541, California Fiduciary Income
Tax Return; Form 109, California Exempt
Organization Business Income Tax Return;
or Form 199, California Exempt Organization
Annual Information Return. Attach form
FTB 3885F to Form 541, Form 109, or
Form 199.
Depreciation is the annual deduction allowed to
recover the cost or other basis of business or
income producing property with a determinable
useful life of more than one year. Land is not
depreciable.
Amortization is an amount deducted to recover
the cost of certain capital expenses over a fixed
period.

B Federal/State Differences
California law has not always conformed to
federal law regarding depreciation methods,
special credits, or accelerated write-offs.

7641233

Consequently, the recovery periods and the
basis on which the depreciation is calculated
may be different from the amounts used for
federal purposes. Reportable differences may
occur if all or part of your assets were placed
in service:
• Before January 1, 1987. California
disallowed depreciation under the federal
Accelerated Cost Recovery System (ACRS).
California depreciation is calculated in the
same manner as in prior years for those
assets.
• On or after January 1, 1987. California
provides special credits and accelerated
write-offs that affect the California basis
for qualifying assets. California does not
conform to all the changes to federal law
enacted in 1993. Therefore, the California
basis or recovery periods may be different
for some assets.
• On or after September 11, 2001. California
has not conformed to the federal Job
Creation and Worker Assistance Act
of 2002 which allows taxpayers to take an
additional first year depreciation deduction
and Alternative Minimum Tax depreciation
adjustment for property placed in service
after September 10, 2001.

FTB 3885F 2023

Side 1

Additional differences may occur for the
following:
• IRC Section 174.
California does not conform to federal
modifications for research or experimental
expenditures that are required to be
capitalized and amortized ratably over a
five-year period.
• Luxury automobile depreciation.
Sport utility vehicles and minivans
built on a truck chassis are included in
the definition of trucks and vans when
applying the 6,000 pound gross weight
limit. However, California does not
conform to the federal modifications
to depreciation limitations on luxury
automobiles (IRC Section 280F).
Depreciation limitations placed in service in
the calendar year 2023:
For passenger automobiles (that are not
trucks or vans):
Tax year

1st Tax Year
2nd Tax Year
3rd Tax Year
Each Succeeding Year

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

For trucks and vans:
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.

Page 2

FTB 3885F Instructions 2023

• Amortization of Certain Intangibles.
California conforms to IRC Section 197
relating to the amortization of intangibles
as of January 1, 1994. There is no
separate California election required or
allowed. However, for IRC Section 197
property acquired before January 1, 1994,
the California adjusted basis as of
January 1, 1994, must be amortized over
the remaining federal amortization period.
• Special and Bonus Depreciation.
California does not conform to the federal
special or bonus depreciation for qualified
property acquired and placed in service.
• Election to Expense Certain Tangible
Property (IRC 179).
This election does not apply to estates and
trusts.
Differences may also occur for other less
common reasons. This list is not intended
to be all-inclusive of the federal and state
differences. For more information about
adjustments, get FTB Pub. 1001, or refer to
the R&TC.

Specific Line Instructions
Line 1 – Complete columns (a) through (i)
for each asset or group of assets placed in
service during the 2023 taxable year. Enter
the column (f) totals on line 1(f). Enter the
column (i) totals on line 1(i).
Attach a schedule if you need additional
space.

Line 2 – Enter total California depreciation
for assets placed in service beginning before
the 2023 taxable year, taking into account
differences in asset basis or differences in
California and federal tax law.
Line 4 – Enter total California amortization for
intangibles placed in service beginning before
the 2023 taxable year, taking into account any
differences in asset basis or differences in
California and federal tax law.
Line 6 – Add line 3 and line 5. Enter the total
here and attach to Form 541.
If engaged in trade or business: Using
California amounts, complete and attach
federal Schedule C (Form 1040), Profit or
Loss from Business; federal Schedule E
(Form 1040), Supplemental Income and
Loss; and/or federal Schedule F (Form 1040),
Profit or Loss From Farming. Follow federal
instructions for “Depreciation, Depletion,
and Amortization” regarding dividing the
deductions between the fiduciary and the
beneficiaries.
Form 109 filers: Enter the total on Form 109,
Part II, line 21a.
Form 199 filers: Enter the total on Form 199,
Part II, line 16.

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to learn about our privacy policy statement,
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