3801: Passive Activity Loss Limitations (2025)
California · FTB · Used for tax years 2025
California Form 3801 figures the passive activity losses allowed for 2025 using California amounts. It reports passive activity income, current-year losses, prior-year unallowed losses, and any special allowance for rental real estate activities with active participation. It also
What you'll need
Have these forms and records available to complete FTB 3801:
- Your California return: Form 540, Form 540NR, Form 541, or Form 100S.
- Federal forms or schedules showing each passive activity’s income or loss, and any California forms or schedules used to calculate adjustments.
- Records of current-year income and losses and prior-year unallowed losses for each activity.
- Your federal modified adjusted gross income for Part II, line 6.
- The federal Form 8582 instructions, which FTB 3801 refers to for completing Parts IV through IX.
The Side 2 worksheets ask for federal and California income or loss amounts both before and after applying the passive activity loss rules.
How to file
Attach FTB 3801 to Form 540, Form 540NR, Form 541, or Form 100S. Attach Side 2, the California Worksheets, to your California tax return as well.
Parts IV through IX do not have to be filed with your California return. You may detach them before filing, but keep a copy for your records.
The supplied form does not list a mailing address or give e-file instructions.
Common mistakes
- Using federal amounts in Part I. The form specifically reminds you to use California amounts.
- Completing Part I before the supporting parts. Complete Part IV before lines 1a through 1c, and Part V before lines 2a through 2c. Read the referenced federal Form 8582 instructions first.
- Entering negative numbers in Part II. Enter all numbers in Part II as positive amounts. Line 6 must not be less than zero.
- Missing the line 6 skip rule. If line 6 is at least line 5, skip lines 7 and 8, enter zero on line 9, and go to line 10.
- Exceeding the printed line 8 limit. Do not enter more than $25,000 on line 8.
- Overlooking the separate-return instruction. If married/RDP filing a separate return, line 5 tells you to see the instructions.
Questions people ask
Where does the form show my total allowed passive activity losses for 2025?
Part III, line 11 shows total losses allowed from all passive activities for 2025. Add lines 9 and 10 to calculate it.
Where do I enter prior-year unallowed losses?
Enter them in column (c) of Part IV or Part V, as applicable. Transfer the totals to Part I, line 1c or line 2c.
What are the two types of worksheets on Side 2 for?
The California Passive Activity Worksheet figures California income or loss before applying the passive activity loss rules. The California Adjustment Worksheets figure California adjustments after applying those rules.
Do I have to submit Parts IV through IX?
No. The form says these parts are not required to be filed with your California return. You may detach them, but keep a copy for your records.