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

[ppoerink]

I've never seen this before why would it say I need to file this.

[JamesG1]

Your return may contain passive activity such as rental income or passive income from an estate, trust or S corporation.

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.

Exceptions

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.

[NelsonE]

I am also stuck in this process. I need my taxes ready ASAP since highschool financial aid process is asking for them and I cannot apply for this yet until this form 3801 is uploaded. Too bad!!!

[nawararabo82]

I tried to delete the form and Turbotax keeps adding it back!

[JamesG1]

You may choose to file your Federal tax return now 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.

Exceptions 

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.

@NelsonE

[New guy Dave]

The form 3801 comes from information provided by the state of California.  We (customers) are receiving this message because the state is behind schedule on providing this information.  The issue is not with TurboTax, it is with the state of California.

[Chrisfc]

The final CA 3801 form is available on  line. When will Turbo Tax implement it?

[MayaD]

The form is available if you are going to download to complete on your own. However, e-filing is different.

Once the form is finalized, it has to be coded and tested for calculations and e-filing acceptability.

[Michael510]

For availability in TT now shows 2/24/2022

[maggieg]

Reply to my question says this form will be available on 2/10, it is now 2/23 and still no form,

also I do not understand why I need this form.  Is it because I received a 1099?

[Michael510]

The forms appear to be ready in TT.  I’m able to move forward to next step in software.  You guys might want to give it a try now.  

[allieo]

Thank you!! You're right, I was able to just press review and file immediately. 🙂 

[hqueue]

One related question to California Form 3801 I've been struggling to figure out:

- Part I - 1b: clearly this is meant to reflect the current tax year (2022) net loss amount

- Part I - 1c: it wasn't clear to me whether this should reflect ONLY the prior net loss amount from the immediate tax year before (2021) or if this should reflect the total carrying balance for all historical passive losses from ALL previous years (like in Federal Schedule E).

If Part I - 1c is meant to reflect the total carrying balance for all historical passive losses from all prior years - does anyone know how to update this in TT? The TT software filled in only the immediate tax year before (2021) figure in Part I - 1c.

Thanks!