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Capital gains from other states

Forum|Forum|5 years ago
March 18, 2021
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Hi,

I lived in Texas from Oct 2018 to Sep 2020 and moved back to California in Oct 2020. While in Texas, I sold some stocks and earned capital gains in 2020. It's my understanding that I don't report stock capital gains for 2020 California income tax because I sold them before moving to California. Is this correct? California Turbox Tax form has a question like "Earned/Rec'd From CA Source as if CA Nonresident for Full Year" One stock I sold is that I bought them when I worked in California about 5 years ago. Do I need to care about this?

Best answer by DavidD66

You are correct, you don't have to pay California tax on the gains you realized when you were not a resident of California. Buying a stock (or other investment) while living in California does not make that investment California sourced. The question is referring to things like employer stock plans that were issued while living and/or working in California, and the leaving the state before they vest or are exercised, triggering a taxable event. California taxes such employer stock, as it was earned/awarded while living/working there. You don't have to worry about thing you bought while living there.

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DavidD66Answer

You are correct, you don't have to pay California tax on the gains you realized when you were not a resident of California. Buying a stock (or other investment) while living in California does not make that investment California sourced. The question is referring to things like employer stock plans that were issued while living and/or working in California, and the leaving the state before they vest or are exercised, triggering a taxable event. California taxes such employer stock, as it was earned/awarded while living/working there. You don't have to worry about thing you bought while living there.

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