Prior year unallowed losses on California Form 3801 for 2023

[AhuraMazda]

Turbo Tax 2023 desktop edition does not carry prior year unallowed losses on California Form 3801 Whereas prior year unallowed losses are carried forward in Fed Form 8582

[doreeno007]

Same here, although I didn't use Turbotax last year, the losses are in my federal form and are not showing on my California 3801 Form.

[MonikaK1]

It depends on why the information doesn't appear on CA Form 3801. Federal Form 8582 information should flow through to the California return automatically unless some of the losses were calculated differently due to differences between Federal and California law, or if you are a nonresident of California.

Please see the California Instructions for Form FTB 3801, Passive Activity Loss Limitations, for information on the areas where California law differs from Federal law. California has different rules for some items affecting rentals, such as depreciation. TurboTax will carry the Federal adjusted gross income to the California return, but you should review the rental in the California return and answer the questions and review the passive and at-risk carryovers. If you depreciated the rental in 2023 using TurboTax, the figures should carry over to 2024. 

California does not have forms or schedules comparable to federal Schedules C, E, or F. Each passive activity that has no comparable California form or schedule should be listed on the California Adjustment Worksheet corresponding to the federal schedule where it was reported.

Be sure to go through all of the screens in the California interview to identify all areas that need adjustment due to differences with Federal law.

Look for a screen in the California interview that asks, ""Any Section 179, Passive or At-Risk Loss Carryovers?". At the screen, "Here's the income that California handles differently", select Business, then Business Profit or Loss Adjustment. Select the activity you need to adjust. The next screen will ask "Any Section 179, Passive or At-Risk Loss Carryovers?" If you answer "yes", TurboTax provides a screen where you can enter the needed California adjustments. 

See partial screenshot below. If the activity is a rental, look for the question in the Rental section.

Entering any needed adjustments should populate California Form 3801.

[doreeno007]

Thank you. I missed a box on the California script.