California Help Please

[Harvey Lucas]

My client is a washington state LLC that has elected to be taxed as a S-Corp.
IRS approved the election, we will file a 1120S for 2008.
Client did a little business in California.
California Gross Income is $69,000, however California expenses will be $72,000.
What California form do we file?
We have a letter from California Franchise Tax Board Acknowledging that they are a Corporation and assigning them a California Corporation ID#

Thank You,
Harvey Lucas

[taxxcpa]

CA S Corp

Form 100 S is the CA S-corp return. There is a minimum tax even if there is a loss.

[abctax]

Minimum tax

for an S-corp in California is $ 800. And to confirm, that applies even if there's a loss.

[S T]

Calif S corp

S Corp reporting, here are some links for you - you can also go to ftb.ca.gov and then go to the business tab for more info.

Generally speaking, unless the CA Government is changing the requirement, the first year the S corp is in operation, the $800 minimum fee is waived.

http://www.ftb.ca.gov/businesses/bus_structures/sCorp.shtml

http://www.ftb.ca.gov/businesses/faq/704.shtml

http://www.ftb.ca.gov/businesses/faq/707.shtml

Sandy

[abctax]

CA minimum tax

Don't know if it would apply to your client, but if the S-corp was only in existence for a few days at the end of the year (can't remember off hand whether it's the last ten or last fourteen days), you get a free pass (so to speak) without using up the initial year exemption.

[dsi]

I believe it's the last 15 days of the year.

[Harvey Lucas]

How to 100S

Been on hold to California Franchise tax board for over 30 minutes , finally gave up.

I am hoping someone on this board can help.

This situation is fairly straight forward, but I have never done a CA 100s before.

My client is based in WA State. They are an LLC taxed as an S-Corp.

The 1120S has gross income of 358,000
Cost of Goods of 249,000
Other Deductions of 55,000
Line 21 ordinary income of 54,000

However, California activity was only:
Gross Income 69,000
Cost of Goods 72,000
For a net CA loss of $3,000

The 69,000 is included in the 358,000 1120S number.
The 72,000 is included in the 249,000 1120S number.

Near as I can tell, using the "California Computation Method", I start on 100S Schedule F, and list my California only numbers.

That gives me a $3,000 loss to 100S line 1.
That produces zero California tax.
Can I ignore the 100S sch L balance sheet?
On 100S sch K, line 1 I list 54,000 in Column b, I list <3,000> in Column d ?
On 100S sch K-1 Line 1, I list 54,000 in Column b, I list <3,000> in Column e ?

I can ignore CA sch R because I have a CA loss?
There is no payroll, and no property in California.

Thank You,

Harvey Lucas