If you select box I on the capital gain worksheet it will put the letter Q on form 8949. There will be no federal tax on the amount. I also live in California and it does handle it correctly by taxing the amount. Then you can print the return and manually change the Q to a Z and then file the taxes manually. What do you think of this idea? Also I am frustrated the TT has not responded to this issue and I do not understand why they would not provide the system to handle this.
