California Schedule E worksheet, where do I record the last years passive losses carryover?

[chung-weber]

California Schedule E worksheet, where do I record the last years passive losses carryover?

[PhyllisG]

Passive loss carryovers are not reported on the Schedule E.  They are reported on the federal  Form 8582 and on the California Form 3801.

To enter the information, do the following if you have 2017 passive loss carryovers for California:

• You should make sure that such amounts are entered in the TurboTax/California (TT/Calif) activity. 
• Go to that activity (rental, k-1, etc.) and Edit it. 
• You will be asked if you have any carryovers associated with that activity. Select Yes and you will then have the opportunity to enter them.

The amounts are usually transferred in from your prior year TT/Calif return, but you must enter them if using TurboTax for the first time.

The above instructions were contributed by TurboTaxTerry with modifications.

[simba]

Turbotax for california never transfered from previous year passive losses for real estate. For the last 7-8 years I always had to enter manually by looking at at previous return.  This should be fixed.

[lori58sf]

this is NOT TRUE for 2019 TT Business version.  It seems to eliminate F3801 generation and generate only page 1 of F8582.   Furthermore, one can no longer input CA K-1 adjustment , the feature is gone.   So is this a problem TT is fixing or starting 2019, f3801 is no longer required by CA and page 2 of F8582 is no longer required by IRS?  I usually do most via Forms.  but cannot even download form to do.   plz advise. 

[rhfrank]

I have been using TT for many years.  Until TT2020 the prior year passive losses on Fed form 8582 were correctly transferred to CA form 3801.  They are not transferred for 2020, and I cannot find a way to enter them.  How do I fix this situation?

[MarilynG1]

Try this suggestion from Employee @TerryA:

"If you have passive loss carryovers for Calif purposes on an activity you should make sure that such amounts are entered in the TT/Calif activity.

Go to that activity (rental, k-1, etc.) and Edit it. You will be asked if you have any carryovers associated with that activity. Select Yes and you will then have the opportunity to enter them."

[rhfrank]

This is only if you have not used TT or had a previous year passive loss.  Otherwise the passive loss should transfer from your previous year TT file during import.  TT2020 has a possible import glitch, see @rhfrank 

[ucjade]

Turbo tax has programming bug in prior year loss carryover in CA. I have to delete the auto-filled number and manually enter the correct one. 

[rhfrank]

See my post for the fix @rhfrank

[skbeltran]

Your suggestion works for the Federal 8582, but the carryforward amounts don't seem to transfer to the CA3801 and TT isn't generating a form 3801. How can we get TT to generate the 3801 form with the carryforward?

[rhfrank]

@rFrank, see:

"TurboTax 2021 - Glitch & solution transferring passive loss information to late CA Form 3801"

[hqueue]

@MarilynG1 - related to this question, and 99% sure is the case, but would you be able to confirm - assuming that I have resided in CA during all historical years of rental property operation, that prior unallowed passive losses carryover amount going in Form 3801 - Part I - Line 1c - should reflect carried over total from full history / all prior years (same as Federal Schedule E) rather than only the amount from immediate prior tax year? The wording here of "Prior year..." rather than "Prior years" (with the s) threw me off a bit and just wanted to make sure. Thank you!

[rhfrank]

Yes, prior years is correct - the cumulative passive loss.

[lori58sf]

s/b the cumulative passive losses.  so lets say you have $10k per year for the past 3 and haven't used any, then it is $30k.  TT usually calculate how much passive loss you can use...and non used ones, TT tracks it too.  you should check that to make sure your record matches last year's return re unused amount which s/b your remaining passive loss that can be claimed in the future against LTGain.

[KingFisher100]

On 2023 TurboTax Home and Business, under the real estate income section related to the California return, there was a question about whether there are carried over passive losses from 2022 (the question about losses was embedded in a list of items, any one of which would require you to respond yes).  You need to answer yes, and then TurboTax shows you what it thinks the passive losses were based on last year's filing and you can check them.  The carryover number is imported from Part 1, Section 1b of the 2022 CA Form 3801.  If you don't answer yes, then there will an adjustment to Part 1, Section B, Item 5, Column C of Form CA (540).  When you answer yes, then that adjustment should clear if the Federal allowed loss from Form 8582 (reflected in Part 1, Section B, Item 5, Column A of Form CA (540)) is the same as the California allowed loss.