@Anonymous
Thank you for your excellent clarifications and assumptions.
I accordingly updated my Federal return and the refund amount favorably increased.
Moving on to the 2018 California State return for its amendment adjustments:
Working on the corresponding K-1 form for California:
- Partnership K-1 Adjustments" page - various - no adjustments; click Continue
- Partnership K-1 Adjustments - Aggregate Gross Receipts: 0.; click Continue
- Disposition of Partnership Interest - Adjustments: $0 all, same as Federal; click Continue
- Passive Loss Carryovers - at this point, click on "Forms" which opens Form 565 Schedule K-1 Worksheet - Partnerships
- Form 565 Page 1:
- "Some investment NOT at risk" box is checked
- "Final K-1" box is checked
- Line 1 "Ordinary income (loss) is pre-populated with amount from Federal K-1 schedule - Form 565 Page 3 "Adjustments to Profit or Loss - Passive Activities":
- Passive status shows "Disposition"
- Regular Tax Line 1a Ordinary income (loss) pass through column (b): I entered the same Suspended Loss Carryover (negative amount) From 2017 Federal. That automatically carries to column (c) Net Income (Loss) Allowed and also to Line 9 Total.
- Form 565 Page 4 AMT I entered the same for Line 1 as on Page 3. It likewise carries to AMT Line 9 Total
- Form 565 Page 5 Federal Income/Loss and Passive Information:
- Line A "Partnership income reported on federal Schedule E", Federal net income (loss) allowed column is pre-populated with the above suspended loss Carryover negative amount.
- Line E "If this activity is a passive activity: Enter the current year net income or the current year net loss recorded on the federal Passive Activities Worksheet 1 (Or Passive Activities Worksheet 2, column A or B, whichever is applicable": I entered the amount from Federal Form Line 8582 Line 1a. This amount is positive and is due to a separate passive activity.
- QuickZoom to K-1 Partner At-risk Limitations Allocation Worksheet:
- In the Carryover Prior Year Loss column for Form 6198 Part A Line 1 Ordinary income or loss, I entered the same Carried over loss (negative value) as on Federal form. This results in a negative amount in the "Disallowed Loss" column, but '0.' in the "Allowed Income or Loss" column for Part A Line 1 total.
- These same amounts carry to Page 2 of this worksheet Part F Lines G and H "Total reported on Sched E"
- Enter At-Risk Information (Form 6198): pre-populated with current year loss (negative value). In the Disallowed Losses Summary at the bottom this negative amount is 100% disallowed;
At this point, exit/toggle out of Forms and observe the CA Refund amount increased favorably.
Might I have missed anything?
