In the California section, the questionnaire is to help you identify changes needed to the California return. The California return starts with Federal adjusted gross income. So, if you have investment expense entered in the Federal return but some of the expenses are to produce income that isn't taxed by California, you would only need to subtract that portion of the expenses. You can only deduct investment expenses for California that were incurred in generating income that is taxed by California.
See the Instructions for California Schedule CA for line-by-line guidance.
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