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State of California Franchise Tax Board

Changes to 2003 Forms

2003 Updates to FTB 3801 Instructions

Revision Date: 06/29/2007

Revision Details:This revision is needed so that the taxpayer reports the correct amount of passive activity loss on the correct form, which is needed to arrive at the correct amount of net income after state adjustments for an S Corporation.

Page 4 of 2003 3801 Instructions; Page 524 of Package X

  • Page 4 of instructions, first column, under S Corporations, number 4, last bullet

It should read:

If the result is negative, enter the result on Form 100S, line 13 as a positive amount.

If the taxpayers followed our current instruction they may report their passive activity loss for an S corporation on a C corporation's form.

The revised internet version is available for download.

2003 Updates to Form 3801

Revision Date: 09/17/2004

Revision Details:3801 - Instructions for Passive Activity Loss Limitations

These revisions are due to the chaptering of SB 615, (Stat. 2004, CH 388). The bill will have the taxpayer backing out the military income included in their federal adjusted gross income.

The revision is required on the stand-alone form FTB 3801 Instructions, Page 1 and 2, and within the 2003 Package X on Pages 522 and 523

  • FTB 3801 Instructions, Page 1, column 1, above "General Information"

It should read:

What's Changed?

The California Legislature enacted SB 615 (Stats. 2004 CH 388), which makes California law compatible with the Servicemembers Civil Relief Act (Public Law 108-189). This means that servicemembers domiciled outside of California, and their spouses, may exclude the member's military compensation from gross income when computing the tax rate on nonmilitary income.

Amended Returns - If you are an active duty military member domiciled outside California and you included your military compensation in income from all sources, you may file an amended return for tax years with an open statute of limitations. Get FTB Publication 1032, Tax Information for Military Personnel and Form 540X, Amended Individual Income Tax Return, for additional information.

  • FTB 3801 Instructions, Page 2, column 3, insert below 6th paragraph

It should read:

Line 6 - Enter your modified federal adjusted gross income from federal Form 8582, line 7.

Note: If you are a nonresident military servicemembers domiciled outside of California, subtract your military compensation from your federal AGI and enter on line 6.

The revised internet version is available for download.

Back to Tax Form Changes for 2003

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