3461: California Limitation on Business Losses (2024)
California · FTB · Used for tax years 2024
California Form 3461 calculates the limitation on business losses for 2024. It uses income, losses, and prior-year excess business loss carryovers to determine any excess business loss carried forward to 2025 and any adjustment included as income on your California tax return.
Who files this form
Form 3461 calculates the limitation on business losses for tax year 2024.
- If line 16 is negative, that amount is your 2024 excess business loss. The form directs you to attach Form 3461 to your California tax return.
- If line 16 is zero or greater, you do not have an excess business loss. Do not attach Form 3461 to your return.
What you'll need
Have the following information available to complete the form:
- Your name as shown on your tax return and your SSN or ITIN.
- Schedule CA (540), Part I, Section A, lines 1z and 7, and Section B, lines 3 through 6, including columns A, B, and C.
- Amounts of other trade or business income, gains, or losses not reported on Form 3461, lines 1 through 6.
- Amounts included on lines 1 through 8 that are not attributable to a trade or business.
- Any excess business loss carryover from prior years. If you have a carryover, you also need the excess business loss adjustment amounts included as income on prior-year Schedule CA (540).
How to file
Attach Form 3461 to your California tax return unless line 16 is zero or greater. If line 16 is zero or greater, the form says not to attach it.
The provided form does not give a mailing address or e-file directions. If you are filing a return other than Form 540, it directs you to see the instructions, which were not provided.
Common mistakes
- Attaching the form when line 16 is zero or greater. The form specifically says not to attach it in that case.
- Transferring line 16 directly to Schedule CA (540) when you have a carryover on line 14b. Instead, follow line 17 to determine your adjustment.
- Reporting an adjustment when the carryover rule says not to. If you have an amount on line 14b and the positive amount of line 16 is less than the excess business loss adjustment included as income in prior years, the form says you have no excess business loss adjustment for 2024.
- Using the Form 540 references for another return without checking the instructions. The form directs filers using other returns to see the instructions.
Questions people ask
What amount goes on line 15 for 2024?
Enter $305,000, or $610,000 if married/RDP filing jointly.
What happens to my 2024 excess business loss?
A negative amount on line 16 is your 2024 excess business loss to be carried forward to 2025.
Where do I report the adjustment if I have no prior-year carryover?
If line 14b has no amount and line 16 is negative, enter line 16 as a positive number on Schedule CA (540), Part I, Section B, line 8p, column C. This is your 2024 excess business loss adjustment included as income.
How does a prior-year carryover affect the adjustment?
If you have an amount on line 14b, follow line 17 rather than transferring line 16 directly. If the positive amount of line 16 exceeds the excess business loss adjustment included as income in prior years, subtract that prior-year adjustment amount. Enter the result on line 17 and as a positive number on Schedule CA (540), Part I, Section B, line 8p, column C.