Instructions For Form Ftb 3801-Cr - Passive Activity Credit Limitations

Part IV — Special Allowance for Low-Income

However, if you have low-income housing

Part II

Housing Credit for Property Placed in Service

credits for property placed in service after 1989,

Special Allowance for Credits from Rental

After 1989

include those credits in Worksheet 3 instead of

Real Estate Activities with Active Participation

Worksheet 2. If you held an indirect interest in

Use Part IV to figure the credit allowed if you

the property through a partnership, S corpora-

have any low-income housing credits for

Line 9 – Married persons filing separate returns

tion, or other pass-through entity, use Work-

property placed in service after 1989. If you

who lived together at any time during the year

sheet 3 only if you acquired your interest in the

held an indirect interest in the property through

are not eligible to complete Part II.

pass-through entity after 1989.

a partnership, S corporation, or other pass-

Line 10 – Enter your federal modified adjusted

through entity, use this part only if your interest

Caution: If you were married filing a separate

gross income from federal Form 8582-CR,

in the pass-through entity was also acquired

return and lived with your spouse at any time

line 10.

after 1989.

during the year, include the credits in Worksheet 4

Line 15 – Figure the tax attributable to the amount

but not in Worksheet 2 or Worksheet 3.

Part V — Passive Activity Credit Allowed

on line 14 using the following worksheet.

Use Part V to figure the amount of the passive

Line 3a through Line 3c – Individuals, including

A. Taxable income . . . . . . . A______

activity credit (as determined in Part I) that is

limited partners, and qualifying estates who had

B. Tax on line A . . . . . . . . . . . . . . . . . B______

allowed for 2000 for all passive activities.

low-income housing credits for property placed

C. Enter amount from

in service after 1989, should include those

Part VI — Election to Increase Basis of Credit

line A above . . . . . . . . . C ______

credits on line 3a and line 3b instead of

Property

D. Enter amount from

Worksheet 2. If you held an indirect interest in

Use Part VI if you disposed of your entire

form FTB 3801-CR,

the property through a partnership, S corpora-

interest in a passive activity in 2000 and elect to

line 14 . . . . . . . . . . . . . D ______

tion, or other pass-through entity, use line 3a

increase the basis of credit property used in a

E. Subtract line D from

and line 3b only if you also acquired your

passive activity.

line C . . . . . . . . . . . . . . E ______

interest in the pass-through entity after 1989.

F. Tax on line E . . . . . . . . . . . . . . . . . F ______

Specific Line Instructions

Line 4a through Line 4c – Individuals should

G. Subtract line F from line B and

include on line 4a and line 4b credits from

enter the result on form

passive activities which were not entered on

For purposes of these instructions, “worksheet”

FTB 3801-CR, line 15 . . . . . . . . . . G ______

line 1a and line 1b, line 2a and line 2b, or line 3a

refers to Worksheet 1 through Worksheet 9 in

Note: When using taxable income in the above

and line 3b. Estates (other than qualifying

the instructions for federal Form 8582-CR. You

computation, it is not necessary to refigure

estates), trusts, and S corporations, should

must use California amounts when completing

items that are based on a percentage of

include credits from all passive activities on

these worksheets. Use only the credits subject to

adjusted gross income.

line 4a through line 4c.

the California passive credit limitation rules

(described in General Information C, Who Must

Part III

Line 1, Line 2, Line 3, and Line 4 – If you are

File). Keep these worksheets for your records.

using a different form to report credits from the

Special Allowance for Low-Income Housing

same activity, keep them separate by listing the

Part I

Credits for Property Placed in Service Before

activity each time for each credit.

1990 (or from Pass-Through Interests Acquired

Line 6 – If form FTB 3801, line 3, shows net

Computation of 2000 Passive Activity Credits

Before 1990)

income or if you did not complete form

Line 1a through Line 1c – Individuals and

Note: Married persons filing separate returns

FTB 3801 because you had net passive income,

qualifying estates that actively participated in

who lived together at any time during the year

you will have to figure the tax on the net passive

rental real estate activities (other than rental real

are not eligible to complete Part III.

income. If you have an overall loss on an entire

estate activities with low-income housing

disposition of your interest in a passive activity,

Caution: In computing the special allowance for

credits) should include the credits from these

reduce net passive income, if any, on form

rental real estate activities with active participa-

activities on line 1a through line 1c. Use

FTB 3801, line 3, to the extent of the loss (but

tion, the dollar limitation for the low-income

Worksheet 1 to figure the amounts to enter on

not below zero) and use only the remaining net

housing credit is more than the amount allowed

line 1a and line 1b.

passive income in the computation below. If you

under federal law. The California limitation is

A qualifying estate is one that is treated as

had a net passive activity loss, enter -0- on

$75,000 ($37,500 if married filing a separate

actively participating for the two tax years

line 6, and go on to line 7.

return, and you lived apart for the entire year).

following the death of the taxpayer. The

Figure the tax on net passive income as follows:

Line 21 – The special allowance for low-income

decedent must have actively participated in the

housing credits for property placed in service

A. Taxable income

rental real estate activity in the tax year he or

before 1990 (or from pass-through interests

including net

she died.

acquired before 1990) is completely phased out

passive income . . . . . . A ______

Caution: If you were married filing a separate

once federal modified adjusted gross income

B. Tax on line A . . . . . . . . . . . . . . . . . B ______

return and lived with your spouse at any time

reaches $350,000 ($175,000 if married filing a

C. Taxable income without

during the year, even if you actively participated in

separate return and you lived apart for the entire

net passive income . . . C ______

rental real estate activities, include the credits in

year). If you completed Part II of this form and

D. Tax on line C . . . . . . . . . . . . . . . . . D ______

Worksheet 4 but not on Worksheet 1.

your federal modified adjusted gross income on

E. Subtract line D from line B

line 10 was $200,000 or less ($100,000 or less

Caution: You may take credits that arose in a

and enter the result on form

if married filing separate and you lived apart for

prior tax year (other than low-income housing

FTB 3801-CR, line 6 . . . . . . . . . . . E ______

the entire year), enter $75,000 on line 24

credits) under the special allowance only if you

Note: When using taxable income in the above

($37,500 if married filing a separate return and

actively participated in the rental real estate

computation, it is not necessary to refigure

you lived apart for the entire year).

activity for both that prior year and this year. If

items that are based on a percentage of

you did not actively participate for both years,

Line 22 – Enter your federal modified adjusted

adjusted gross income.

include the credits in Worksheet 4 but not in

gross income from federal Form 8582-CR,

Line 7 – If line 7 is zero because the tax on net

Worksheet 1.

line 22.

passive income on line 6 is more than your

Line 2a through Line 2c – Individuals, including

credits from passive activities on line 5, all of

limited partners, and qualifying estates who had

your passive activity credits are allowed. In this

low-income housing credits for property placed

case, enter the amount from line 5 on line 37.

in service before 1990, should include the

Report the credits on the related credit forms.

credits from those activities on line 2a and

Do not complete Worksheet 5 through

line 2b.

Worksheet 9.

Page 2 FTB 3801-CR Instructions 2000

Instructions For Form Ftb 3801-Cr - Passive Activity Credit Limitations - 2000 Page 2

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