Instructions For Form Ftb 3801-Cr - Passive Activity Credit Limitations - 1999 Page 2
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3a partnership, S corporation, or other pass-
Caution: If you were married filing a separate
Line 10 – Enter your federal modified adjusted
through entity, use this part only if your interest
return and lived with your spouse at any time
gross income from federal Form 8582-CR,
in the pass-through entity was also acquired
during the year, include the credits in Worksheet 4
line 10.
after 1989.
but not in Worksheet 2 or Worksheet 3.
Line 15 – Figure the tax attributable to the amount
Line 3a through Line 3c – Individuals, including
on line 14 using the following worksheet.
Part V — Passive Activity Credit Allowed
limited partners, and qualifying estates who had
Use Part V to figure the amount of the passive
A. Taxable income . . . . . . A______
low-income housing credits for property placed
activity credit (as determined in Part I) that is
B. Tax on line A . . . . . . . . . . . . . . . . B______
in service after 1989, should include those
allowed for 1999 for all passive activities.
C. Enter amount from
credits on line 3a and line 3b instead of
line A above . . . . . . . . C ______
Part VI — Election to Increase Basis of Credit
Worksheet 2. If you held an indirect interest in
D. Enter amount from
Property
the property through a partnership, S corpora-
form FTB 3801-CR,
Use Part VI if you disposed of your entire
tion, or other pass-through entity, use line 3a
line 14 . . . . . . . . . . . . D ______
interest in a passive activity in 1999 and elect to
and line 3b only if you also acquired your
E. Subtract line D from
increase the basis of credit property used in a
interest in the pass-through entity after 1989.
line C . . . . . . . . . . . . . E ______
passive activity.
Line 4a through Line 4c – Individuals should
F. Tax on line E . . . . . . . . . . . . . . . . F ______
include on line 4a and line 4b credits from
G. Subtract line F from line B and
Specific Line Instructions
passive activities which were not entered on
enter the result on form
line 1a and line 1b, line 2a and line 2b, or line 3a
FTB 3801-CR, line 15 . . . . . . . . G ______
For purposes of these instructions, “worksheet”
and line 3b. Estates (other than qualifying
Note: When using taxable income in the above
refers to Worksheet 1 through Worksheet 9 in
estates), trusts, and S corporations, should
computation, it is not necessary to refigure
the instructions for federal Form 8582-CR. You
include credits from all passive activities on
items that are based on a percentage of
must use California amounts when completing
line 4a through line 4c.
adjusted gross income.
these worksheets. Use only the credits subject to
Line 1, Line 2, Line 3, and Line 4 – If you are
the California passive credit limitations rules
Part III
using a different form to report credits from the
(described in General Information C, Who Must
same activity, keep them separate by listing the
File). Keep these worksheets for your records.
Special Allowance for Low-Income Housing
activity each time for each credit.
Credits for Property Placed in Service Before
Part I
Line 6 – If form FTB 3801, line 3, shows net
1990 (or from Pass-Through Interests Acquired
income or if you did not complete form
Before 1990)
Computation of 1999 Passive Activity Credits
FTB 3801 because you had net passive income,
Note: Married persons filing separate returns
Line 1a through Line 1c – Individuals and
you will have to figure the tax on the net passive
who lived together at any time during the year
qualifying estates that actively participated in
income. If you have an overall loss on an entire
are not eligible to complete Part III.
rental real estate activities (other than rental real
disposition of your interest in a passive activity,
estate activities with low-income housing
Caution: In computing the special allowance for
reduce net passive income, if any, on form
credits) should include the credits from these
rental real estate activities with active participa-
FTB 3801, line 3, to the extent of the loss (but
activities on line 1a through line 1c. Use
tion, the dollar limitation for the low-income
not below zero) and use only the remaining net
Worksheet 1 to figure the amounts to enter on
housing credit is greater than the amount
passive income in the computation below. If you
line 1a and line 1b.
allowed under federal law. The California
had a net passive activity loss, enter -0- on
limitation is $75,000 ($37,500 if married filing
line 6, and go on to line 7.
A qualifying estate is one that is treated as
separate, and you lived apart for the entire
actively participating for the two tax years
Figure the tax on net passive income as follows:
year).
following the death of the taxpayer. The
A. Taxable income
decedent must have actively participated in the
Line 21 – The special allowance for low-income
including net
rental real estate activity in the tax year he or
housing credits for property placed in service
passive income . . . . . . A ______
she died.
before 1990 (or from pass-through interests
B. Tax on line A . . . . . . . . . . . . . . . B ______
acquired before 1990) is completely phased out
Caution: If you were married filing a separate
C. Taxable income without
once federal modified adjusted gross income
return and lived with your spouse at any time
net passive income . . . C ______
reaches $350,000 ($175,000 if married filing
during the year, even if you actively participated in
D. Tax on line C . . . . . . . . . . . . . . . D ______
separate and you lived apart for the entire year).
rental real estate activities, include the credits in
E. Subtract line D from line B
If you completed Part II of this form and your
Worksheet 4 but not on Worksheet 1.
and enter the result on form
federal modified adjusted gross income on
FTB 3801-CR, line 6 . . . . . . . . . E ______
Caution: You may take credits that arose in a
line 10 was $200,000 or less ($100,000 or less
prior tax year (other than low-income housing
Note: When using taxable income in the above
if married filing separate and you lived apart for
credits) under the special allowance only if you
computation, it is not necessary to refigure
the entire year), enter $75,000 on line 24
actively participated in the rental real estate
items that are based on a percentage of
($37,500 if married filing separate and you lived
activity for both that prior year and this year. If
adjusted gross income.
apart for the entire year).
you did not actively participate for both years,
Line 7 – If line 7 is zero because the tax on net
Line 22 – Enter your federal modified adjusted
include the credits in Worksheet 4 but not in
passive income (plus the tax on net active
gross income from federal Form 8582-CR,
Worksheet 1.
income in the case of an S corporation) on
line 22.
Line 2a through Line 2c – Individuals, including
line 6 is greater than your credits from passive
limited partners, and qualifying estates who had
activities on line 5, all of your passive activity
low-income housing credits for property placed
credits are allowed. In this case, enter the
in service before 1990, should include the
amount from line 5 on line 37. Report the
credits from those activities on line 2a and
credits on the related credit forms. Do not
line 2b.
complete Worksheet 5 through Worksheet 9.
However, if you have low-income housing
Part II
credits for property placed in service after 1989,
include those credits in Worksheet 3 instead of
Special Allowance for Credits from Rental
Worksheet 2. If you held an indirect interest in
Real Estate Activities with Active Participation
the property through a partnership, S corpora-
Line 9 – Married persons filing separate returns
tion, or other pass-through entity, use Work-
who lived together at any time during the year
sheet 3 only if you acquired your interest in the
are not eligible to complete Part II.
pass-through entity after 1989.
Page 2 FTB 3801-CR Instructions 1999
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