I’ll check back in the next day to see if others correct my understanding, but now that I received Form 1001 from the FTB it looks like carryover PALs are not allowed to offset the gains made during the sale of my rental. The CA carryover PAL is only tracked to offset the federal return carryover PALs. I wish I had known about this ahead of time to prepare for the tax consequences (like maybe paying off my loan to avoid the carryovers) Hopefully someone has a better answer. CA taxes are 💩
