BillM223
Expert Alumni

Deductions & credits

Gains or losses inside an HSA are reportable on Schedule CA (540) on line 7 - see Line 7 in Section A in the instructions for Schedule CA (540). This should result in the gains being reported as California ordinary income (since all capital gains - long and short - are taxed as ordinary income).

 

There is no mention of whether or not they were part of distributions. 

 

 

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