non-resident capital gain tax calculation

Forum|Forum|2 years ago
February 27, 2024
1 reply
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Moved from Calif to Florida mid-year. Sold Calif home after move. As best I can read the rules, the gain must be taxed by Calif as a "California source while non-resident". But I've tried entering the information multiple ways into TurboTax and it always excludes the gain from by California liability. Is this a TurboTax error, or is there some counter-intuitive rule I'm missing?

mglauner

You should be filing a Part-Year Resident return to California if you moved mid-year.

It doesn't matter that the property was sold after you moved from CA, it is California-source income as you mention.

However, don't forget that your gain may be excluded for both Federal and California if it was your personal residence you sold.

Here's more info from California FTB on Selling Your Home.

@rdbayse

rdbayseAuthor

I know all that. I did some digging to make absolutely sure that selling my California house is considered a "California source" income, so Calif taxes me on it even if I reside out-of-state. The problem is that TurboTax does NOT include it in state taxable income, despite trying multiple ways of answering the related questions. I'm now convince this is an error in TurboTax.

MayaD

You didn't mention if house sold was your principal residence.

CA conforms to the IRS rules and allow you to exclude, up to a certain amount, the gain you make on the sale of your home. You may take an exclusion if you owned and used the home for at least 2 out of 5 years.

During the 5 years before you sell your home, you must have at least:

2 years of ownership and
2 years of use as a primary residence

Ownership and use can occur at different times.

Individuals

You do not have to report the sale of your home if all of the following apply:

Your gain from the sale was less than $250,000/$500000 for Married/Registered domestic partner (RDP)
You have not used the exclusion in the last 2 years
You owned and occupied the home for at least 2 years

CA Sale of your principal residence

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