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California Passive Losses

faccini
Level 1

I can't get Lacerte to deduct real estate losses in California for real estate professionals, with income over $150K. Is this not deductible in 2020?

 

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6 Replies 6
abctax55
Level 15

Were you able to get Lacerte to deduct it in 2019?

(I wanna be a member of the pot stirring club too)
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faccini
Level 1

Yes, lacerte deducted in 2019.

I've checked the boxes:

not a passive activity

actively participated in real estate

real estate professional

number of significant participation hours 500

 

Lacerte deducts federal , but for California, just adds to previous years passive losses

 

 

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abctax55
Level 15

A. Purpose

Individuals, estates, trusts, and S corporations use form FTB 3801, Passive Activity Loss Limitations, to figure both of the following:

  • Allowable California passive activity loss (PAL).
  • Adjustment you must make to account for any difference between your California PAL and your federal PAL.

Generally, California law is the same as federal law concerning PAL limitations. However, differences, such as the special treatment for real estate professionals (as described in General Information) may cause your California PAL to be different from your federal PAL.

(I wanna be a member of the pot stirring club too)
faccini
Level 1

I appreciate you replies. thank you. I was in the Form 3801 instructions yesterday, and the General Information section said nothing about "real estate professionals" Below is the text. Obviously I'm doing something wrong. I can't figure what. Lacerte is not honoring real estate professionals. I was thinking about going to Spidell, but somehow I don't think they will be able to help. General Information

GENERAL INFORMATION

In general, for taxable years beginning on or after January 1, 2015, California law conforms to the IRC as of January 1, 2015. However, there are continuing differences between California and federal law. When California conforms to federal tax law changes, we do not always adopt all of the changes made at the federal level. For more information, go to ftb.ca.gov and search for conformity. Additional information can be found in FTB Pub. 1001, Supplemental Guidelines to California Adjustments, the instructions for California Schedule CA (540), California Adjustments - Residents, or Schedule CA (540NR), California Adjustments - Nonresidents or Part-Year Residents, and the Business Entity tax booklets.

The instructions provided with California tax forms are a summary of California tax law and are only intended to aid taxpayers in preparing their state income tax returns. We include information that is most useful to the greatest number of taxpayers in the limited space available. It is not possible to include all requirements of the California Revenue and Taxation Code (R&TC) in the instructions. Taxpayers should not consider the instructions as authoritative law.

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abctax55
Level 15

CA does NOT allow more than the $ 25000.  CA treats (as my link showed) all rental losses as passive, unlike the IRS, even with active/material/R.E. Pro classification.

IF you got Lacerte to take more in 2019, you may need to amend the return.

(I wanna be a member of the pot stirring club too)
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abctax55
Level 15
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