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Corporate Passive Activity Loss

INCOME YEAR

CALIFORNIA FORM

1999

and Credit Limitations

3802

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

Name(s) as shown on return

California corporation number

Part I 1999 Passive Activity Loss

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

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) . . . . . . . . . .

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) . . . . . . . . . . . . . . . .

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 . . . . . . . . . . . . . . . . . . . . . . . .

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

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

Part II 1999 Passive Activity Credits

Part II

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

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

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) . . . . . . . . . . . . . . .

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

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

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

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

Part III Election to Increase Basis of Credit Property

Part III

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 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

$ __________________

A Purpose

Using California amounts and federal Worksheet 1

General Information

through Worksheet 6 in the instructions for federal

Form FTB 3802 is used by closely held

Form 8810, determine the amounts to enter on

In general, California tax law conforms to the

C corporations and personal service corporations

form FTB 3802. Keep both the California and

Internal Revenue Code (IRC) as of January 1,

to figure the amount of any passive activity loss

federal worksheets for your records. The following

1998. However, there are continuing differences

(PAL) or credit for the current income year and the

information provides instructions for figuring the

between California and federal tax law. California

amount of losses and credits from passive

PAL for California purposes.

has not conformed to most of the changes made

activities allowed on the corporation’s tax return. A

to the IRC by the federal Internal Revenue Service

B Special Notes

personal service corporation has a PAL for the year

Restructuring and Reform Act of 1998 (Public Law

if the total losses (including prior year unallowed

S Corporations

105-206) and has not conformed to any of the

losses) from all of the corporation’s passive

S corporations must use form FTB 3801, Passive

changes made by the Tax and Trade Relief

activities exceed the total income from all of the

Activity Loss Limitations, and form FTB 3801-CR,

Extension Act of 1998 (Public law 105-277).

corporation’s passive activities. A closely held

Passive Activity Credit Limitations, instead of form

The following may affect the computation of the

C corporation has a PAL for the year if the total

FTB 3802 to figure the California PAL and credit

corporation’s passive loss and credit limitation:

losses (including prior year unallowed losses)

limitations.

from all its passive activities exceed the sum of the

•

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

Publicly Traded Partnerships (PTPs)

total income from all its passive activities and its

Beginning in 1994, and for federal purposes

A PTP is a partnership whose interests are traded

net active income.

only, rental real estate activities of taxpayers

on an established securities market or are readily

engaged in a real property business are not

A personal service corporation has passive activity

tradable on a secondary market (or its substantial

automatically treated as a passive activity.

credits if the passive activity credits (including

equivalent).

California did not conform to this provision. As

prior year unallowed credits) exceed the tax

Because California and federal laws differ, PTPs

a result, rental activities are passive activities

attributable to net passive income. A closely held

may have different income amounts for state and

for California purposes.

C corporation has a passive activity credit for the

federal purposes (see form FTB 3801). However,

•

Amortization of certain intangibles (IRC

year if its credits from passive activities (including

when figuring PALs, California PTPs are treated the

Section 197): Property classified as IRC

prior year unallowed credits) exceed the sum of

same as federal PTPs. Follow the “Special

Section 197 property under federal law is also

the tax attributable to net passive income and the

Instructions for PTPs” in the instructions for

IRC Section 197 property for California

tax attributable to net active income.

federal Form 8582, Passive Activity Loss

purposes; there is no separate California

Form FTB 3802 closely follows federal Form 8810,

Limitations.

election required or allowed. However, for

Corporate Passive Activity Loss and Credit

California purposes, in the case of IRC

C Who Must File

Limitations. In general, if you completed federal

Section 197 property acquired before

Form 8810 to determine the amount of the federal

Personal service corporations and closely held

January 1, 1994, the California adjusted basis

PAL and credit limitations, you must also complete

C corporations that have losses or credits from

as of January 1, 1994, must be amortized over

form FTB 3802.

passive activities must file form FTB 3802. See the

the remaining federal amortization period.

instructions for federal Form 8810 for the

380299109

FTB 3802 1999

California Form 3802 - Corporate Passive Activity Loss And Credit Limitations - 1999

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