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

C Who Must File

If your credits from all passive activities exceed

real estate activities with low-income housing

the tax attributable to net passive income, you

credits) should include the credits from these

Form FTB 3801-CR is filed by individuals,

may have a suspended passive activity credit

activities on line 1a and line 1b.

estates, trusts, and S corporations with any of

for 2013. Generally, you have net passive

Use Worksheet 1 to figure the amounts to

the following credits from passive activities:

income if form FTB 3801, line 3 shows income.

enter on line 1a and line 1b.

Credit

Code

See the instructions for line 6 for details.

A qualifying estate is one that is treated as

Orphan drug credit carryover

185

Part II — Special Allowance for Rental Real

actively participating for the two taxable

Low-income housing

172

Estate Activities with Active Participation

years following the death of the taxpayer. The

Research

183

Use Part II to figure the credit allowed if

decedent must have actively participated in the

Enter the code number for your credit on your

you have any credits from rental real estate

rental real estate activity in the taxable year of

tax return when you are able to claim the credit.

activities in which you actively participated

death.

(other than low- income housing credit). Get

D Passive Activities

If you were married/RDP filing a separate

instructions for federal Form 8582-CR, see

return and lived with your spouse/RDP at

“Rental Activities.”

See the instructions for federal Form 8582-CR

any time during the year, even if you actively

for information about passive activities and

Part III — Special Allowance for Low-Income

participated in rental real estate activities,

passive activity credits.

Housing Credits for Property Placed in

include the credits on Worksheet 4 but not on

Service Before 1990 (or from Pass-Through

Worksheet 1.

Dispositions

Interests Acquired Before 1990)

Unallowed passive activity credits, unlike

You may take credits that arose in a prior tax

Use Part III to figure the credit allowed if you

unallowed passive activity losses, are not

year (other than low-income housing credits)

have any low-income housing credits for

allowable when you dispose of your interest in

under the special allowance only if you actively

property placed in service before 1990. Also,

an activity in a taxable transaction. However,

participated in the rental real estate activity

use this part if your low-income housing credit

you may elect to increase the basis of the

for both that prior year and this year. If you

is from a partnership, S corporation, or other

credit property by the amount of the original

did not actively participate for both years,

pass-through entity in which you acquired your

basis reduction of the property to the extent

include the credits on Worksheet 4 but not on

interest before 1990, regardless of the date the

that the credit has not been allowed under the

Worksheet 1.

property was placed in service.

passive activity rules. No basis adjustment may

Line 2a through Line 2c – Individuals,

be elected on a partial disposition of an interest

Part IV — Special Allowance for Low-Income

including limited partners, and qualifying

in a passive activity.

Housing Credit for Property Placed in Service

estates who had low-income housing credits

After 1989

In computing the special allowance for rental

for property placed in service before 1990,

real estate activities with active participation,

Use Part IV to figure the credit allowed if

should include the credits from those activities

the dollar limitation for the low-income

you have any low-income housing credits

on line 2a and line 2b.

housing credit is more than the amount

for property placed in service after 1989. If

However, if you have low-income housing

you held an indirect interest in the property

allowed under federal law. The California

credits for property placed in service after

limitation is $75,000 ($37,500 if married/RDP

through a partnership, S corporation, or other

1989, include those credits on Worksheet 3

filing a separate return and you lived apart the

pass-through entity, use this part only if your

instead of Worksheet 2. If you held an indirect

entire year).

interest in the pass-through entity was also

interest in the property through a partnership,

acquired after 1989.

E Passive Activity Credit

S corporation, or other pass-through entity,

Part V — Passive Activity Credits Allowed

use Worksheet 3 only if you acquired your

Carryovers

Use Part V to figure the amount of the passive

interest in the pass-through entity after 1989.

activity credit (as determined in Part I) that is

Passive activity credits are suspended and

If you were married/RDP filing a separate

allowed for 2013 for all passive activities.

carried forward indefinitely. Unlike losses,

return and lived with your spouse/RDP at

suspended credits are not allowed when you

Part VI — Election to Increase Basis of Credit

any time during the year, include the credits

dispose of the activity. However, you may elect

Property

on Worksheet 4 but not on Worksheet 2 or

to increase your basis (by the amount of the

Use Part VI if you disposed of your entire

Worksheet 3.

original basis reduction) to the extent the credit

interest in a passive activity in 2013 and elect

Line 3a through Line 3c – Individuals,

has not been used.

to increase the basis of credit property used in

including limited partners, and qualifying

a passive activity.

The credit becomes allowable under the

estates who had low-income housing credits

passive loss rules when there is sufficient

for property placed in service after 1989,

passive income to allow its use or it is within

should include those credits on line 3a and

Specific Line Instructions

the scope of the rental real estate rule. Once

line 3b instead of Worksheet 2. If you held

the credit becomes allowable under the passive

For purposes of these instructions,

an indirect interest in the property through a

loss rule, it is subject to the other limitations

“worksheet” refers to Worksheet 1 through

partnership, S corporation, or other pass-

applicable to the use of credits, such as the

Worksheet 9 in the instructions for federal

through entity, use line 3a and line 3b only if

limitation that credits may not reduce regular

Form 8582-CR. Use California amounts

you also acquired your interest in the pass-

tax below tentative minimum tax.

when completing these worksheets. Use only

through entity after 1989.

the credits subject to the California passive

In addition, the treatment of passive activity

Line 4a through Line 4c – Individuals should

credit limitation rules (described in General

credits is determined in all respects by the

include on line 4a and line 4b credits from

Information C, Who Must File). Keep these

general rules applicable to those credits,

passive activities which were not entered

worksheets for your records.

including carryover periods.

on line 1a and line 1b, line 2a and line 2b,

or line 3a and line 3b. Estates (other than

Part I

F Overview of Form

qualifying estates), trusts, and S corporations,

should include credits from all passive

The form consists of six parts.

Computation of 2013 Passive Activity Credits

activities on line 4a and line 4b.

Line 1a through Line 1c – Individuals and

Part I — 2013 Passive Activity Credits

qualifying estates that actively participated in

Use Part I to combine your credits from

rental real estate activities (other than rental

passive activities to determine if you have

passive activity credits for 2013.

Page 2 FTB 3801-CR Instructions 2013

Instructions For Form Ftb 3801-Cr - Passive Activity Credit Limitations - 2013 Page 2

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