DanielV01
Expert Alumni

State tax filing

@CurtE350  It is complicated, as I mentioned in my post.  The correct figure is probably neither $0 nor -$30K, because of how California calculates the loss.  But what is the future implication that makes it a good idea to figure out?  A future rental gain in California.  Passive activity losses are limited.  When the loss is limited, certain losses may be disallowed in the current year.  But when passive activity gain is reported, the losses are carried forward and applied against that gain.  So that is why you ideally do want to figure out what the Passive Loss Limitation is, and what Passive Loss is reportable in 2020 to CA, as the rest is "limited" and therefore carries forward until it can be applied.  That could happen in a future year in which you have gain from your passive activity in California that would be taxable.

 

But a 0 or a negative number is going to produce the same result for California this year:  0 tax.

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