There is a mandatory 3.3% California State withholding tax on rental real estate sales on form 593.
Here are my old notes on how to enter it. See if it's still the same.
To Enter it go to the state tab and step though all the screens (many screens) until the very end and it will ask for Any Real Estate or other withholding forms. But then it says to also enter it under the Federal side. So go to.....
Federal Taxes (or Personal for Desktop HB)
Deductions and Credits
Then scroll way down to Estimates and Other Taxes Paid
Other Income Taxes - Click the Start or Update button
Next page scroll down to bottom section Other Income Taxes Paid
Click Start or Update by Withholding not already entered on a W-2 or 1099
Then you need to go though the CA return to the very last screen and put it in again so it shows up on the CA 540 line 73 for Real Estate Withholding and not line 71 as income tax withholding.
