The program is correct. Here's how it works:
Both states can tax you on your full $50,000 gain. On your CO return, you can't subtract the CA taxes and claim that your gain is $44.3K (50K minus $5700 CA tax). CO can tax you on the full $50K gain, but then CO will give you a CREDIT for the taxes you pay to CA. Therefore you will not be double-taxed. When you do your state returns, be sure to complete the non-resident return (CA) BEFORE you do your home state return (CO), so that the credit flows correctly.
**Answers are correct to the best of my ability but do not constitute tax or legal advice.
