Are stock sells considered CA sources for partial residents? Schedule D (540)

Forum|Forum|3 years ago
April 12, 2022
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As part of the Allocating Capital Gain or Loss section, I get asked a few questions for an individual sell:

* Earned/Rec'd from CA Source as if Nonresident for Full Year

* Allocation Type

* Earned/Rec'd While a CA Resident

* Earned/Rec'd from CA Source While a CA Nonresident

I'll use the following example for a small -$16 January sell. I moved TO California in October, so this sell occurred in Washington.

How does "California Source" apply to stocks?

In a real estate example, it's possible to earn money in California even though you're in another state. If you sell a property in CA, you made money in CA. Therefore, you could consider that a Californian source of income.

However, stocks aren't tied to an area. How should I answer these questions? For example: for "Earned/Rec'd from CA Source as if Nonresident for Full Year", shouldn't I put $0 because, if I were a non-resident, then the sell would be a non-CA source?

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LeonardS

Yes, The capital gain income from the sale of the stock is taxable by California if you were a California resident when you sold the stock.

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josalvatorreAuthor

@LeonardS So what would the answers to the 4 questions be?

GeorgeM777

It appears that your entries on the Allocating Capital Gain or Loss page are correct based on your CA residency dates. Because the $16 loss was realized when you were not a CA resident, it was proper to allocate the entire loss to your state of residency which at the time of the sale was Washington.

@josalvatorre

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