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March 24, 2024
Question

CA and AZ Both Taxing AZ Source Capital Gain

  • March 24, 2024
  • 2 replies
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Hi.  My issue is I am being taxed twice on AZ source income (capital gain) since I am now a resident of CA.  I sold my AZ home in June 2023; however, I became a resident of CA end of May.  So CA is taxing me on all my source income including the home sale since I am a resident of CA now, and AZ is also taxing me on the capital gain since the home was in AZ.  I did not qualify for the capital gain exclusion.  Can I file forms 301 and 309 to get a tax credit from AZ for the double taxation amount? Or should I file CA Schedule Schedule S to get the tax credit from CA?  I am filing a CA Form 540NR and AZ Form 140PY.

    2 replies

    CatinaT1
    April 1, 2024

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    Employee
    April 1, 2024

    California will not grant its residents an "other state credit" for taxes paid to Arizona.

    https://www.ftb.ca.gov/forms/2023/2023-540-s-instructions.html

     

    You must request the credit on your AZ tax return.

    **Answers are correct to the best of my ability but do not constitute tax or legal advice.