Yes, you will report the capital gains in both states but will get a credit for the taxes paid to AZ. Review your personal information to ensure that you selected that you made money in another state. Complete your federal tax return first, then your AZ non-resident tax return and lastly your CA tax return. Make sure that you write down the gain from you sale. When you prepare your AZ tax return, enter the gain from your home sale when you are prompted. You will be taxed on that amount as an Arizona nonresident. However, you will receive a credit for the amount you must pay on that income in Arizona for your California return.
Please refer to the TurboTax Help articles Where do I enter the sale of a second home, an inherited home, or land on my 2022 taxes? and How do I file a nonresident state return? for instructions.
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