California Form 3802 - Corporate Passive Activity Loss And Credit Limitations - 2002

Corporate Passive Activity Loss

TAXABLE YEAR

CALIFORNIA FORM

2002

3802

and Credit Limitations

Attach to Form 100 or Form 100W (personal service corporations and closely held C corporations only).

Name(s) as shown on return

California corporation number

Part I 2002 Passive Activity Loss

1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2

Caution: Before completing Part I, complete federal Worksheet 1 and Worksheet 2 in the instructions for federal Form 8810 using California amounts.

1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2

1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2

1 a Current year income from federal Worksheet 2, column (a) . . . . . . . . . . . . . . . . . . . . . .

1a

1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2

1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2

b Current year deductions and losses from federal Worksheet 2, column (b) . . . . . . . . . .

1b

1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2

1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2

c Prior year unallowed losses from federal Worksheet 2, column (c) . . . . . . . . . . . . . . . .

1c

1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2

d Combine line 1a, line 1b, and line 1c. If the result is net income or zero, see instructions . . . . . . . . . . . . . . . . . . . . . . . .

1d

2 Closely held C corporations, enter net active income. See instructions. Personal service corporations, enter -0- on this line

2

3 Unallowed passive activity deductions and losses. Combine line 1d and line 2. If the result is net income or zero,

see the instructions for line 1d and line 3. Otherwise, go to line 4 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

3

4 Total deductions and losses allowed. Add the income, if any, on line 1a and line 2 and enter the result. See instructions .

4

Part II 2002 Passive Activity Credits

Caution: Before completing Part II, complete federal Worksheet 5 in the instructions for federal Form 8810 using California amounts.

1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2

1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2

1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2

5 a Current year passive activity credits from federal Worksheet 5, column (a) . . . . . . . . . .

5a

1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2

1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2

b Prior year unallowed credits from federal Worksheet 5, column (b) . . . . . . . . . . . . . . . .

5b

1 2 3 4 5 6 7 8 9 0 1 2 3 4 5 6 7 8 9 0 1 2

6 Combine line 5a and line 5b . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

6

7 Enter the tax attributable to net active income and net passive income. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . .

7

8 Unallowed passive activity credit. Subtract line 7 from line 6. If zero or less, enter -0-. See instructions . . . . . . . . . . . . .

8

9 Allowed passive activity credit. Subtract line 8 from line 6. See instructions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

9

Part III Election to Increase Basis of Credit Property

10 If the corporation disposed of its entire interest in a passive activity or former passive activity in a fully taxable transaction, and it elects to increase the

basis of credit property used in that activity by the unallowed credit that reduced the property’s basis, check here . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

11 Name of activity disposed of

__________________________________________________________________________________________________

12 Description of the credit property for which the election is being made

________________________________________________________________

__________________________________________________________________________________________________________________________

13 Amount of unallowed credit that reduced the property’s basis for California purposes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ __________________

•

Passive loss rules – IRC Section 469(c)(7):

exceed the sum of the total income from all its

General Information

Beginning in 1994, and for federal purposes

passive activities and its net active income.

only, rental real estate activities of taxpayers

In general, California law conforms to the Internal

A personal service corporation has passive activity

engaged in a real property business are not

Revenue Code (IRC) as of January 1, 2001.

credits if the passive activity credits (including prior

automatically treated as a passive activity.

Therefore, California has conformed to the income

year unallowed credits) exceed the tax attributable to

California did not conform to this provision. For

tax changes made to the IRC by the federal Internal

net passive income. A closely held C corporation has

California purposes, all rental activities are

Revenue Service Restructuring and Reform Act of

a passive activity credit for the year if its credits from

passive activities.

1998 (Public Law 105-206), the Tax and Trade Relief

passive activities (including prior year unallowed

•

Amortization of certain intangibles (IRC Section

Extension Act of 1998 (Public Law 105-277), Surface

credits) exceed the sum of the tax attributable to net

197): Property classified as IRC Section 197

Transportation Revenue Act of 1998 (Public

passive income and the tax attributable to net active

property under federal law is also IRC Section

Law 105-178), the Ricky Ray Hemophilia Relief Fund

income.

197 property for California purposes; there is no

Act of 1998 (Public Law 105-369), the Ticket to Work

Form FTB 3802 closely follows federal Form 8810,

separate California election required or allowed.

and Work Incentives Improvement Act of 1999

Corporate Passive Activity Loss and Credit

However, for California purposes, in the case of

(Public Law 106-170), the Miscellaneous Trade and

Limitations. In general, if you completed federal

IRC Section 197 property acquired before

Technical Corrections Act of 1999 (Public Law 106-

Form 8810 to determine the amount of the federal

January 1, 1994, the California adjusted basis as

36), the FSC Repeal and Extraterritorial Income

PAL and credit limitations, you must also complete

of January 1, 1994, must be amortized over the

Exclusion Act of 2000 (Public Law 106-519), the

form FTB 3802.

remaining federal amortization period.

Consolidated Appropriations Act of 2001 (Public Law

106-554), and to technical corrections made by the

Using California amounts and federal Worksheet 1

A Purpose

Economic Growth and Tax Relief Reconciliation Act

through Worksheet 6 in the instructions for federal

of 2001 (Public Law 107-16). However, there are

Form FTB 3802 is used by closely held

Form 8810, determine the amounts to enter on form

continuing differences between California and Federal

C corporations and personal service corporations to

FTB 3802. Keep both the California and federal

law. California has not conformed to some of the law

figure the amount of any passive activity loss (PAL)

worksheets for your records. The following

changes made by the Economic Growth and Tax

or credit for the current taxable year and the amount

information provides instructions for figuring the PAL

Relief Reconciliation Act of 2001 (Public Law 107-

of losses and credits from passive activities allowed

for California purposes.

16) or the federal Job Creation and Worker

on the corporation’s tax return.

B Special Notes

Assistance Act of 2002 (Public Law 107-147).

A personal service corporation has a PAL for the year

Note: Fiscal year taxpayers are subject to California

S Corporations

if the total losses (including prior year unallowed

tax law as it conforms to federal law that is applicable

S corporations must use form FTB 3801, Passive

losses) from all of the corporation’s passive activities

for taxable years beginning prior to January 1, 2002.

Activity Loss Limitations, and form FTB 3801-CR,

exceed the total income from all of the corporation’s

Passive Activity Credit Limitations, instead of form

The following may affect the computation of the

passive activities. A closely held C corporation has a

FTB 3802 to figure the California PAL and credit

corporation’s passive loss and credit limitation:

PAL for the year if the total losses (including prior

limitations.

year unallowed losses) from all its passive activities

380202104

FTB 3802 2002