What is the Form 3801 (Passive Activity Loss Limitations) for? Why do I have to file this

[MayaD]

Form 3801 is filed by individuals, estates, trusts, and S corporations that have losses (including prior year unallowed losses) from passive activities.

Passive activities include trade or business activities in which you don't materially participate. Home rentals, and limited partnership are considered examples of common passive activity.

The form won't be available until 2/10/2022 and can't be e-filed. California Individual Form Availability

2020 Instructions for Form FTB 3801

[savuti94]

California state tax form 3801 seems to still not be available.  Not until 3/3/2022?  Is this accurate?

[RobertB4444]

That is the date given as of this time.

[allieo]

If I didn't have any losses, why do I still need to file this?

[JamesG1]

The exceptions are listed here.

Form FTB 3801 is filed by individuals, estates, trusts, and S corporations that have losses (including prior year unallowed losses) from passive activities. Additional information for nonresidents, part-year residents, and S corporations is provided below.

Exception. You do not have to file form FTB 3801 if you meet both of the following conditions:

• You have a net loss from rental real estate activities that is fully deductible under the special allowance for rental real estate.
• You have no other passive activities.

Passive activity is activity that a taxpayer did not materially participate in during the tax year. The Internal Revenue Service (IRS) defines two types of passive activity:

• trade or business activities to which the taxpayer did not actively contribute, and
• rental activities.

[ryan2]

How does TurboTax determine that I need to fill out this form?  I don't believe I have, or entered on the federal return, any losses that would require me to fill out this form.  I am being blocked to file my state return due to this form.

[GeorgeM777]

Assuming you have no passive activity loss limitations in the current year, Form 3801 is not necessary and deleting it may resolve the issue you are having with Form 3801.  Follow these steps to delete Form 3801.

1. Open or continue your return in TurboTax.
2. In the left menu, select Tax Tools and then Tools.
3. In the pop-up window Tool Center, choose Delete a form.
4. Select Delete next to the form/schedule/worksheet in the list and follow the instructions.

Here is a link to a TurboTax article discussing how to delete a form which you also may find helpful.

How to View and Delete Forms in TurboTax Online

[RobertB4444]

If you have a passive activity (a rental house or something of that nature) then you aren't allowed to deduct all of your losses all at once.  That form tracks them.

If you don't have any passive losses or gains to track for this year then delete your California return and see if starting it over doesn't fix the issue.

[allieo]

I've tried deleting and redoing the state return as well as attempting to delete form 3801 and for some reason it just stays. 

I don't have any passive activities or rental properties... I guess maybe I should just wait until 3/3/2022? 

[JamesG1]

You may choose to file your Federal tax return now and and file your state tax return at a later time. 

This TurboTax Help explains how that is done. 

The exceptions to filing the form are listed here.

Form FTB 3801 is filed by individuals, estates, trusts, and S corporations that have losses (including prior year unallowed losses) from passive activities. Additional information for nonresidents, part-year residents, and S corporations is provided below.

Exception. You do not have to file form FTB 3801 if you meet both of the following conditions:

• You have a net loss from rental real estate activities that is fully deductible under the special allowance for rental real estate.
• You have no other passive activities.

[zukasama]

Hello, I have the same issue. I do not believe I need to file this form 3801, but I keep getting the error message that this form is not available and I am unable to file my state return. I am unable to delete the form either, I tried and it shows the form is successfully deleted, but in the form list, form 3801 is still there after getting this message "successfully deleted"

And, I actually do see this form 3801 is available on the internet website. 

Something must be wrong with TurboTax. I hope they fix this issue causing troubles.

[JamesG1]

It sounds like the form is regenerating after it has been deleted under Tax Tools / Tools / Delete a form.

If so, there is something in the tax return that is regenerating the form.

Are you reporting rental real estate income on your Federal 1040 tax return?  Please clarify.

You may choose to file your Federal tax return now and and file your state tax return at a later time. 

This TurboTax Help explains how that is done. 

[zukasama]

Hello, THank you for reply.

I do not have any real estate related items. I have already filed Federal 1040. I am unable to file the state tax return due to this issue of turbotax regenerating the form 3801. 

THank you for advice.

[ThomasM125]

@zukasama Often you have passive income as a consequence of ownership in a partnership, trust or S corporation. If you reported any K-1 schedules on your tax return, that can come from such an ownership and may require form 3801 to be generated.

Also, you may have losses carried over from previous years that will require form 3801 to be generated in the current year.