Hi Stephaniemajor99,
Let's start with federal law. As a US citizen (which I presume you both are), you are taxed on all of your worldwide income, no matter where you live for the rest of your life. So any income you earn in that other country is taxable in the US (subject to earned income exclusions and foreign tax credits).
Selling your personal residence in 2026 is also problematic. Your gain on the sale of your personal residence is taxable. However if you lived in the house for at least 2 years within the 60 months ending with the close on the sale, you would be entitled to a $500,000 gain exclusion as married filing joint. So selling in 2026 gets you very close to the edge there. For California, they are reluctant to give up residency for people moving abroad (as opposed to another state). But this is moot, as the tax consequences of a sale of a CA house (whether you are taxed as a resident or non-resident) are the same as federal.
So it is important to sell your house early enough to meet the personal usage requirement for two years of the past five when you sell it.
So in conclusion, you must continue to file US tax returns, and maybe CA also, as long as you live (provided you make enough money that you are required to file). If you are treating your CA home as a rental property in the interim, you must (for sure) file CA returns (at least as a non-resident) for the rental income and expense. And when you sell your home in 2026, you must report the gain (and maybe get and exclusion if you meet the test). I will post more below on what it takes to break residency in CA.
Moving to another country does not make your house "sold" in 5/2023. Only actually selling it does that.
I hope this answers your question.
Marty
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