Fillable Printable 2016 Form 3503 - Natural Heritage Preservation Credit

2016 Form 3503 - Natural Heritage Preservation Credit

7241163 FTB 3503 2016 Side 1For Privacy Notice, get FTB 1131 ENG/SP.

Natural Heritage Preservation Credit

TAXABLE YEAR

2016

CALIFORNIA FORM

3503

General Information

The California Personal Income Tax Law and Corporation Tax Law

allows a nonrefundable credit for certain approved contributions of real

property. This credit can be used by taxpayers against the net tax in an

amount equal to 55% of the fair market value of a qualiﬁed contribution

that has been approved for acceptance by the Wildlife Conservation

Board (WCB).

A Purpose

Use form FTB 3503, Natural Heritage Preservation Credit, to ﬁgure the

amount of the credit. Also, use this form to claim pass-through credits

received from S corporations, estates, trusts, partnerships, or limited

liability companies (LLCs) classiﬁed as partnerships.

S corporations, estates, trusts, partnerships, and LLCs classiﬁed as

partnerships should complete form FTB 3503 to ﬁgure the amount

of credit to pass through to shareholders, beneﬁciaries, partners, or

members. Attach this form to Form 100S, California S Corporation

Franchise or Income Tax Return; Form 541, California Fiduciary Income

Tax Return; Form 565, Partnership Return of Income; or Form 568,

Limited Liability Company Return of Income. Show the pass-through

credit for each shareholder, beneﬁciary, partner, or member on

Schedule K-1 (100S, 541, 565, or 568), Share of Income, Deductions,

Credits, etc.

B Description

The WCB implemented a program for the protection of wildlife habitat,

open space, and agricultural lands. Under this program, property

can be contributed to the state, any local government, or to any

nonproﬁt organization designated by a local government, based on

speciﬁed criteria.

The credit is allowed against net tax, in an amount equal to 55%

of the fair market value of any qualiﬁed contribution made by the

taxpayer to the state, any local government, or any designated

nonproﬁt organization.

C Qualiﬁcations

To qualify for this credit:

y Make a contribution of property as deﬁned in Section 37002 of the

Public Resources Code.

y The WCB must approve the contribution for acceptance.

y Attach a copy of this completed form FTB 3503 to your California tax

return.

For more information regarding qualiﬁed contributions, contact the WCB

at 916.445.8448, or go to wcb.ca.gov.

The credit of any qualiﬁed contribution passes through to shareholders,

beneﬁciaries, partners, or members of the pass-through entity in

accordance with their pro-rata interest in the entity as of the date of

the qualiﬁed contribution. The term “pass-through entity” means any

S corporation, partnership, or LLC treated as a partnership.

Attach to your California tax return.

Name(s) as shown on your California tax return

 SSN or ITIN  CA Corporation no.  FEIN

California Secretary of State ﬁle number

Part I Wildlife Conservation Board (WCB) Qualiﬁed Contribution

Donor’s name as shown on certiﬁcate Type of donated property Date donation was accepted Fair market value

Project name WCB ID#

Part II Available Credit

1 Fair market value from Part I ............................................................. 1

2 Multiply the amount on line 1 by 55% (.55) ................................................. 2

3 Pass-through natural heritage preservation credit(s) from Schedule K-1 (100S, 541, 565, or 568).

See instructions....................................................................... 3

4 Total current year natural heritage preservation credit. Add line 2 and line 3......................... 4

5 Credit carryover from 2015. See instructions ................................................ 5

6 Total available natural heritage preservation credit. Add line 4 and line 5. . .......................... 6

7 a Credit claimed. Enter the amount of the credit claimed on the current year tax return.

See instructions. (Do not include any assigned credit claimed on form FTB 3544A.).

.............. 7a

b Total credit assigned. Enter the total amount from form FTB 3544, column (g).

If you are not a corporation, enter -0-. See instructions

......................................7b

8 Credit carryover available for future years. Add line 7a and line 7b, subtract the result from line 6........ 8

Page 2 FTB 3503 Instructions 2016

D Limitations

No credit will be allowed unless you received a certiﬁcate from the

WCB, which shows that your qualiﬁed contribution was approved for

acceptance. You must retain the certiﬁcate and make it available to the

FTB upon request.

S corporations may claim only 1/3 of the credit against the 1.5%

entity-level tax (3.5% for ﬁnancial S corporations). The remaining

2/3 must be disregarded and may not be used as a carryover. In

addition, S corporations may pass through 100% of the credit

to their shareholders under California Revenue and Taxation

Code (R&TC) 23803(a).

If a C corporation had unused credit carryovers when it elected

S corporation status, the carryovers were reduced to 1/3 and transferred

to the S corporation. The remaining 2/3 were disregarded. The allowable

carryovers may be used to offset the 1.5% tax on net income in

accordance with the respective carryover rules. These C corporation

carryovers may not be passed through to shareholders. For more

information, get Schedule C (100S), S Corporation Tax Credits.

If a taxpayer owns an interest in a disregarded business entity [a single

member limited liability company (SMLLC) not recognized by California,

and for tax purposes is treated as a sole proprietorship owned by

an individual or a branch owned by a corporation] the credit amount

received from the disregarded entity that can be utilized is limited to the

difference between the taxpayer’s regular tax ﬁgured with the income of

the disregarded entity, and the taxpayer’s regular tax ﬁgured without the

income of the disregarded entity.

For more information on SMLLC, get form 568, Limited Liability

Company Tax Booklet.

If the disregarded entity reports a loss, the taxpayer may not claim the

credit this year but can carry over the credit amount received from the

disregarded entity to the next succeeding taxable year.

This credit cannot reduce the regular tax below the minimum franchise

tax (corporations and S corporations), annual tax (limited partnerships,

limited liability partnerships, and LLCs classiﬁed as a partnership),

the alternative minimum tax (corporations, exempt organizations,

individuals, and ﬁduciaries), the built-in gains tax (S corporations), or

the excess net passive income tax (S corporations).

This credit can reduce regular tax below Tentative Minimum Tax (TMT).

Get Schedule P (100, 100W, 540, 540NR, or 541), Alternative Minimum

Tax and Credit Limitations, for more information.

This credit is in lieu of any other state tax credit or deduction that the

taxpayer would otherwise be allowed for the contributed property or

interest therein.

This credit is not refundable.

E Assignment of Credits

Assigned Credits to Afﬁliated Corporations – Credit earned by

members of a combined reporting group may be assigned to an afﬁliated

corporation that is a member of the same combined reporting group. A

credit assigned may only be claimed by the afﬁliated corporation against

its tax liability. For more information, get form FTB 3544, Election to

Assign Credit Within Combined Reporting Group, or form FTB 3544A,

List of Assigned Credit Received and/or Claimed by Assignee or go to

ftb.ca.gov and search for credit assignment.

F Carryover

If the available credit exceeds the current year tax liability, the

unused credit may be carried over. For credits generated before

January 1, 2015, the credit may be carried over for eight years

or until the credit is exhausted. For credits generated on or after

January 1, 2015, the credit carryover period has been extended to

15 years or until exhausted, whichever occurs ﬁrst. Apply the carryover

to the earliest taxable year possible. This credit cannot be carried back

and applied against a prior year’s tax.

Instructions

Part I Wildlife Conservation Board (WCB)

Qualiﬁed Contribution

Enter the following information from the certiﬁcate you received from

the WCB:

y Name of donor

y Type of property donated

y Date donation was accepted

y Approved fair market value amount

y Project name

y WCB ID #

If you have more than one qualiﬁed contribution, ﬁgure each

contribution on a separate form FTB 3503.

Part II Available Credit

Line 3 – Pass-Through Natural Heritage Preservation

Credit

If you received more than one pass-through credit from S corporations,

estates, trusts, partnerships, or LLCs classiﬁed as partnerships, add the

amounts and enter the total on line 3. Attach a schedule showing the

names and identiﬁcation numbers of the entities from which the credits

were passed through to you.

Line 5 – Credit Carryover

Enter the carryover amount from your 2015 form FTB 3503.

Line 7a – Credit claimed

Do not include assigned credits claimed on form FTB 3544A.

This amount may be less than the amount on line 6 if your credit

is limited by your tax liability. For more information, see General

Information D, Limitations, and refer to the credit instructions in your

tax booklet. Use credit code 213 when you claim this credit.

Line 7b – Total credit assigned

Corporations that assign credit to other corporations within combined

reporting group must complete form FTB 3544. Enter the total amount

of credit assigned from form FTB 3544, column (g) on this line..