The U.S. Supreme Court ruled against double taxation in 2015,
stating that two or more states are no longer permitted to tax the same
earnings. So, if you live in California but sell a house in Connecticut and pay taxes on
that income in Connecticut, California cannot tax you on it as well. California must offer you a credit for taxes you paid to Connecticut.
So you won't pay taxes on the same money twice. You'll have to
spend a little more time preparing multiple state returns, however. You will first file a Non-Resident Connecticut tax return, calculating the tax you owe them for the house you sold. Then you will calculate your California Resident return, also showing the sale and claiming the tax credit for taxes paid to Connecticut..
