Completing Form 3885 (California Franchise Tax Board depreciation) in Lacerte

Form 3885 is a California Franchise Tax Board (FTB) form used by corporations, including partnerships and limited liability companies (LLCs) classified as corporations, to calculate their California depreciation and amortization deduction.  

Who needs to file this?

• Corporations operating in California that need to claim deductions for the depreciation or amortization of their business assets. This typically includes corporations that have purchased or improved physical or intangible assets during the tax year.  
• Nonprofit organizations that have obtained tax exemption from the California FTB and are reporting depreciation or amortization expenses on Form CA-199 (California Exempt Organization Annual Information Return).  

To enter in Lacerte:

While form 3885 does not have a direct input screen, you can you can generate it by entering California-specific depreciation and amortization information within the appropriate depreciation screen in your tax module.

• Partnership: Screen 14
• Corporate: Screen 21
• S-Corp: Screen 16
• Exempt Org: Screen 39
  • Screen 1 Client Info
    If the box 990-T Return Type says 501(c) corporation, then the 3885 will generate. If it says 501(c) trust or any of the trust types, then the 3885F will generate.

Lacerte automatically creates Form 3885 based on any differences between federal and California depreciation.