Treatment of former passive activity credit - Spidell

Treatment of former passive activity credit

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Message Board Treatment of former passive activity credit

This topic contains 1 reply, has 2 voices, and was last updated by Sandy Weiner 1 week, 6 days ago.

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  • #184056
    Sophie Yu
    Participant

    According to IRS publication 925, any prior year unallowed passive activity credits from a former passive activity can be offset the allocable part of current year tax liability.  I believe Ca is also conformed to Federal’s treatment of former passive activity rule. My question is where can I indicate the allocable part of current year tax liability that’s allocable to the current year net income from the “former” passive activity on  Form 3523, Seciton C?  Should I override on line 45 with explanation statement to FTB?   Thanks!

  • #184095
    Sandy Weiner
    Participant

    California generally conforms to the passive activity credit provisions (see R&TC Sec. 17561). The Passive Activity loss limitations and credits are computed on FTB Form 3801 and 3801-CR and if it relates to the Research Credit would be entered on Line 44 of the Form 3523