California state taxes for military stationed oversees

Forum|Forum|1 year ago
November 9, 2024
1 reply
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Hello,

I've been stationed in Japan for 4 years now. I'm originally from California when i joined the military in 2013. This year i will sell a portion of my stock portfolio. Will i have to pay California state taxes on the capital gains i receive from it?

TomD8

Employee

California's rule is that California military servicemembers who leave California under PCS orders become nonresidents of California for income tax purposes. California taxes non-residents only on California-source income.

https://www.ftb.ca.gov/forms/2023/2023-1032-publication.pdf

The gain or loss from the sale of stocks or bonds has a source where you are a resident at the time of the sale. Since you were considered a non-resident of CA at the time you sold your stocks, the capital gain is not California-sourced and therefore not taxable by CA.

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