State tax filing

This is usually caused by Passive loss carryovers. Beginning in 1994, for federal purposes only (not California), rental real estate activities of persons in the real estate business are not automatically treated as activities. California did not conform to this provision, so you may have had passive loss differences between federal and California in years since 1994, and therefore you may also have differences in passive loss carryovers for those years.

If this applies, go back to California and look for the screen below to make the adjustment.