@dresslered California collects/withholds taxes on the transfer of a property at source i.e. at the time of closing. This done through then use of form 593. If you look at the form , you will see that it is asking for details of the transaction and "roughly" the gain in the transaction without considering your taxable income as a whole i.e. the transaction in isolation.
It then computes the tax on this income ( the gain ) at a nominal rate -- think now its is 3.3% . This tax is withheld and then transmitted to the state by the closing entity/ title company. One thing to note is that when you file your tax return for California ( next year ) you need to include this withholding as amount " withheld" not as "estimated" payment. I made that mistake and learned the hard way.
You do not need to compute your 2024 tax return to file the form 593.
Does this help ?
This answer has been verified for accuracy by an Intuit expert employee
