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Passive loss on sale of rental house in California

I have a sizable passive loss on the rental property from prior years (mostly due to depreciation).    My understanding is that passive loss can offset the capital gains on the rental property sale.  And when I enter everything in TurboTax, that works on Federal.  BUT the CA 540 adjustments seems to reject that passive loss resulting in much higher taxes than expected.

Am I misunderstanding the CA laws?   Or just mis-entering something in TurboTax?


Thanks in advance

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1 Reply

Passive loss on sale of rental house in California

Suspended passive losses cannot be used to offset capital gains with respect to federal income taxation.

 

California most likely follows federal law and regulations.

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