Question

California tax on Indian Income

Forum|Forum|4 years ago
January 29, 2022
1 reply
0 views

Hi,

I live in California and do my taxes as MFJ with my spouse. I recently sold an apartment back in India and have some capital gains. Also, I have some other income in India as interests on my bank accounts and fixed deposits.

I understand that I need to pay taxes on my worldwide income while doing the Federal taxes. Can you please confirm if I also need to pay California state taxes on this income from India? If not, how do I exclude it in Turbotax while doing state taxes? (as turbotax auto imports the gross income from federal tax returns)

TurboTax Premier Online

G

GeorgeM777

Yes, it would appear that you need to pay taxes on this income even though such income, or perhaps part of it, was eligible for exclusion on your federal return. The following is an excerpt from the CA Franchise Tax Board website that relates to Income Adjustments for CA residents.

"Foreign income. If you excluded income exempted by U.S. tax treaties on your federal Schedule 1 (Form 1040) (unless specifically exempt for state purposes), enter the excluded amount in column C..."

It does not appear that any of your foreign capital gains, or bank interest, are specifically exempted from taxation under CA tax regulations. Thus, it would appear the India income you reference would be taxable income on your CA return.

**Say "Thanks" by clicking the thumb icon in a post**Mark the post that answers your question by clicking on "Mark as Best Answer"