Passive Activity Loss In California

The passive loss rules stated in irc section 469 c 7 may affect the computation of the corporation s passive loss and credit limitation.

Passive activity loss in california. However when completing the ftb 3801 it looks like you are forced to take the allowable amount of loss 25000 even if you have lit read more. There are 5 properties. This deduction phases out 1 for every 2 of magi above 100 000 until 150 000 when it is completely phased out. Get federal form 8810 corporate passive activity loss and credit limitations for more information.

Under the passive activity rules you can deduct up to 25 000 in passive losses against your ordinary income w 2 wages if your modified adjusted gross income magi is 100 000 or less. I understand that ca conforms to fed passive activity loss rules. California passive activity worksheet see general instructions for step 1 use this worksheet to figure california income loss from passive activities before application of passive activity loss pal rules. Passive activity loss not allowed on california return.

Yes it is regarding rental real estate activities. Enter information for each passive activity on the schedule separately. 11 00 7451193 ftb 3801 2019 side 1 california worksheets attach side 2 to your california tax return. The only other income is 48 interest income yet every tax software i use automatically takes the full 25 000 loss and it is then lost and is not carried forward.

For federal purposes only rental real estate activities of taxpayers engaged in a real property. Step 1 figuring your california passive activity income loss use the california passive activity worksheet on form ftb 3801 side 2 to determine the current year california net income or net loss from each passive activity before application of the pal rules. First line 11 on the ftb 3801 form comes to 26 315 allowable loss which includes the 25 000 allowance and 1 315 passive gain. Passive activity loss rules are generally applied at the individual level but they also extend to virtually all businesses and rental activity in various reporting entities except c corporations.