Crosstalk in circularly polarized (CP) liquid crystal display (LCD) with polarized glasses (passive 3D glasses) is mainly caused by two factors: 1) the polarizing system including wave retarders and 2) the vertical misalignment (VM) of light between the LC module and the patterned retarder. We show that the latter, which is highly dependent on the vertical viewing location, is a much more significant factor of crosstalk in CP LCD than the former. There are three contributions in this paper. Initially, a display model for CP LCD, which accurately characterizes VM, is proposed. A novel display calibration method for the VM characterization that only requires pictures of the screen taken at four viewing locations. In addition, we prove that the VM-based crosstalk cannot be efficiently reduced by either preprocessing the input images or optimizing the polarizing system. Furthermore, we derive the analytic solution for the viewing zone, where the entire screen does not have the VM-based crosstalk.