California Form 3725 PDF Details

The California 3725 form plays a crucial role for parent corporations with insurance company subsidiaries, guiding them through the process of tracking assets transferred between entities for a given taxable year. This essential document, attached alongside Form 100 or 100W, serves multiple purposes, including helping to determine capital gains or losses from such transfers. It focuses on appreciated properties transferred to an insurance company, requiring detailed information such as property descriptions, their fair market value at the time of transfer, and subsequent gains or losses deferred under specific Revenue and Taxation Code (R&TC) sections. The form outlines conditions under which deferred gains must be recognized as income, covering scenarios where transferred properties cease to be used in the active conduct of the insurer's trade or business or change hands outside the commonly controlled group. With rules applying to transactions initiated on or after June 23, 2004, the form also includes instructions for reporting short-term and long-term capital gains or losses, emphasizing the importance of accurate record-keeping and compliance with the state’s taxation codes. By providing a structured way to report these financial movements, Form 3725 underscores the intricate links between corporate structure, tax obligations, and the operational use of assets within the broader corporate group.

QuestionAnswer
Form NameCalifornia Form 3725
Form Length2 pages
Fillable?No
Fillable fields0
Avg. time to fill out30 sec
Other names12_3725 ftb 3725 form

Form Preview Example

TAXABLE YEAR

Assets Transferred from Parent Corporation

 

CALIFORNIA FORM

2012

3725

to Insurance Company Subsidiary

Attach to Form 100 or Form 100W.

Parent corporation name

California corporation number

FEIN

Part I Assets Transferred from Parent Corporation to Insurance Company Subsidiary

Section A – Information on Properties Transferred

Were appreciated properties transferred to an insurance company subsidiary? . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ฀฀ Yes ฀ No If “Yes,” enter the company’s name, California corporation number, and/or FEIN (see instructions), then continue with line 2. If “No,” do not complete this form.

Insurance company name

California corporation number

FEIN

2 Does the insurance company use the assets it received from its parent corporation in active conduct of a trade

฀฀ Yes ฀ No

or business of the insurer?

If “Yes,” continue with Section B. If “No,” go to Part II.

 

Section B – Deferred Capital Gains. Use additional sheets if necessary.

(a)

(b)

(c)

(d)

(e)

(f)

(g)

Taxable year

Description of

Location of

Date transferred

Fair market value at

Cost or

Amount of gain

 

property

property

(mo., day, yr.)

date of transfer

other basis

deferred under R&TC

 

 

 

 

 

 

Section 24465

 

 

 

 

 

 

(e) less (f)

3

Part II Assets Transferred from Insurance Company to Other Companies

Section A – Information on Disposition of Properties

 

 

 

 

4

Does the insurance company still use the assets listed in Part l, Section B, in its active conduct of trade or business?

฀฀ Yes

฀ No

 

If “Yes,” corporation is not required to complete Part II, Section B or Section C. If “No,” go to line 5.

฀฀ Yes

฀ No

5

Did the insurance company dispose of any assets received from the parent corporation?

 

If “Yes,” go to line 6. If “No,” gain is taxable, go to Section B or Section C.

฀฀ Yes

฀ No

6

Did the insurance company sell the assets to another company within the combined reporting group?

If “Yes,” gain is non-taxable. If “No,” gain is taxable, go to Section B or Section C.

Section B – Short-Term Capital Gains and Losses-Assets Held One Year or Less. Use additional sheets if necessary.

(a)

(b)

(c)

(d)

(e)

(f)

Taxable year

Description of

Date of disposal

Fair market value

Cost or

Gain (loss)

 

property

(mo., day, yr.)

or gross sales price

other basis

(d) less (e)

7

8 Short-term capital gains (losses). Total amounts in column (f). Enter here and on Form 100 or Form 100W, Side 5, Schedule D, Part I, line 1, column (f) or Schedule D (100S), Section A or Section B, Part I, line 1, column (f).

See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7431123

FTB 3725 2012 Side

Section C – Long-Term Capital Gains and Losses-Assets Held More Than One Year. Use additional sheets if necessary.

(a)

(b)

(c)

(d)

(e)

(f)

Taxable year

Description of

Date of disposal

Fair market value

Cost or

Gain (loss)

 

property

(mo., day, yr.)

or gross sales price

other basis

(d) less (e)

9

0 Long-term capital gains (losses). Total amounts in column (f). Enter here and on Form 100 or Form 100W, Side 5, Schedule D, Part II, line 5, column (f) or Schedule D (100S), Section A or Section B, Part II, line 4, column (f).

See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

General Information

A Purpose

Use form FTB 3725, Assets Transferred from Parent Corporation to Insurance Company Subsidiary, to track the assets transferred from a parent corporation to an insurance company subsidiary. In addition, use this form to figure capital gains (losses) if the parent corporation transferred assets to an insurance company subsidiary beginning on or after June 23 2004.

California Revenue and Taxation Code (R&TC) Section 24465 provides that when a parent corporation transfers appreciated property to an insurance company subsidiary, the gain is deferred if the property transferred to the insurer is used in the active conduct of

a trade or business of the insurer. The gain must be recognized as income if any of the following apply:

•The transferred property is no longer owned by an insurer in the taxpayer’s commonly controlled group (or a member of the taxpayer’s combined reporting group).

•The property is no longer used in the active conduct of the insurer’s trade or business (or the trade or business of another member in the taxpayer’s combined reporting group).

•The holder of the property is no longer held by an insurer in the commonly controlled group of the transferor (or a member of the taxpayer’s combined reporting group).

R&TC Section 24465 applies to transactions entered into on or after June 23, 2004.

B Definitions

1.Appreciated property – Appreciated property means property whose fair market value (FMV), as of the date of the transfer, exceeds its adjusted basis as of that date.

2.Commonly controlled group – Commonly controlled group exists when stock possessing more than 50% of the voting power is owned, or constructively owned,

by a common parent corporation (or chains of corporations connected through the common parent) or by members of the same family, see R&TC Section 25105. Also, a commonly controlled group includes corporations that are stapled entities,

see R&TC Section 25105(b)(3). Special rules are provided in R&TC Section 25105 for partnerships, trusts, and transfers of voting power by proxy, voting trust, written shareholder agreement, etc.

Speciic Line Instructions

Part I – Assets Transferred from Parent Corporation to Insurance Company Subsidiary

Section A – Information on

Properties Transferred

Line – Enter the insurance company’s California corporation number or federal employer identification number (FEIN). If the insurance company does not have one of these numbers, enter “not applicable” and continue with line 2.

Section B – Deferred Capital Gains

Line 3, column (b) – Description of property. Describe the assets the parent corporation transferred to an insurance company subsidiary.

Line 3, column (e) – Fair market value at date of transfer. FMV is the price that the property would sell for in the open market.

Line 3, column (f) – Cost or other basis. In general, the cost or other basis is the cost of the property plus purchase commissions and improvements minus depreciation, amortization, and depletion. Enter the cost or adjusted basis of the asset for California purpose.

Part II – Assets Transferred from Insurance Company to Other Companies

Section B – Short-Term Capital Gains and Losses- Assets Held One Year or Less and

Section C – Long-Term Capital Gains and Losses-Assets Held More Than One Year

Report short-term or long-term capital gains (losses) based on the length of time the parent corporation held the assets.

Line 7 and Line 9, column (b) – Description of property. Describe the assets that the insurance company sells to another company; or the transferred assets that the insurance company does not use in its active trade or business.

Line 7 and Line 9, column (d) – Fair market value or gross sales price. Enter the FMV of the assets as of the date that the insurance company no longer uses the assets in its active trade or business. Or, enter the gross sales price of the assets if the insurance company sells the assets to another company.

Line 8 – Short-term capital gains (losses). Total amounts in column (f). Enter total short-term capital gains (losses) here and on Form 100 or Form 100W, Side 5, Schedule D, Part I, line 1, column (f) or Schedule D (100S), Section A or Section B, Part I, line 1, column (f). Write on Schedule D, under column (a) Description of property: “FTB 3725” and attach a copy of form FTB 3725 to the tax return.

Line 0 – Long-term capital gains (losses). Total amounts in column (f). Enter total long-term capital gains (losses) here and on Form 100 or Form 100W, Side 5, Schedule D, Part II, line 5, column (f) or Schedule D (100S), Section A or Section B, Part II, line 4, column (f). Write on Schedule D, under column (a) Description of property: “FTB 3725” and attach a copy of form FTB 3725 to the tax return.

Side 2 FTB 3725 2012

7432123

How to Edit California Form 3725 Online for Free

California Form 3725 can be filled out without difficulty. Simply make use of FormsPal PDF editing tool to do the job fast. The editor is continually maintained by us, acquiring useful functions and turning out to be greater. If you are seeking to begin, here's what you will need to do:

Step 1: Hit the "Get Form" button at the top of this webpage to access our PDF editor.

Step 2: With this state-of-the-art PDF tool, it's possible to accomplish more than merely fill in blank form fields. Try all the features and make your docs seem faultless with customized textual content put in, or tweak the original input to excellence - all comes along with an ability to add your personal images and sign the file off.

Completing this PDF will require focus on details. Make sure that all necessary areas are filled in properly.

1. Fill out your California Form 3725 with a number of necessary fields. Collect all of the important information and make certain absolutely nothing is omitted!

California Form 3725 completion process detailed (step 1)

2. Given that the last part is completed, you'll want to include the essential particulars in Part II Assets Transferred from, If Yes corporation is not required, Does the insurance company still, If Yes go to line If No gain is, If Yes gain is nontaxable If No, Section B ShortTerm Capital Gains, Taxable year, Description of, property, Date of disposal mo day yr, Fair market value, or gross sales price, Cost or, other basis, and Gain loss d less e so that you can move on to the next part.

Writing part 2 in California Form 3725

It is possible to make errors when filling out your Does the insurance company still, consequently ensure that you reread it before you'll finalize the form.

3. In this particular step, examine Taxable year, Description of, property, Date of disposal mo day yr, Fair market value, or gross sales price, Cost or, other basis, Gain loss d less e, Longterm capital gains losses, Schedule D Part II line column f, General Information, A Purpose Use form FTB Assets, California Revenue and Taxation, and by a common parent corporation or. Each one of these should be filled out with highest awareness of detail.

Guidelines on how to fill in California Form 3725 part 3

Step 3: Before finalizing your file, check that all blank fields are filled in right. When you are satisfied with it, click on “Done." Acquire your California Form 3725 once you join for a free trial. Immediately use the document in your FormsPal cabinet, along with any edits and changes all kept! At FormsPal.com, we strive to make sure your details are stored secure.

California Form 3725 isn’t the one you’re looking for?

Related Documents