I have rental property with active participation, so each year my losses were allowed to offset income on my Federal tax but not on the California taxes because Cal treats all Rentals as passive income. As such, each year I reached loss limitations on the CAL form that didn't allow any of the losses to offset my income. That's fine. But now I've just sold the property (totally disposed of the property) in a 1031 partial exchange, which generated a taxable event/ gain (boot) for both Federal and Cal taxes. The taxable gain exceeds my CAL accumulated disallowed losses. So, I should be able to claim those accumulated, previously disallowed losses shown on Cal form 3801against the taxable gain incurred, but I don't know how to input that on the Cal form only. If I input this info into my federal info as passive activity losses carried from a previous year, it would give me the deduction on my federal tax twice because it's already being counted/has been counted as a loss based on my active participation as a real estate prof. So, I'm left trying to only input the info into the CAL tax return as a disallowed loss carryforward from form 3801. I guess I could generate the passive loss carryover form in Fed tax to see how it populates the Cal form and then override the info in Federal return, etc. I mail in my returns regardless because of have QBI forms that have to be signed that aren't supported in TT electronic submissions, so I don't mind the override if that's the best solution. Regards.
