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Deductions & credits
What CI Guy says is true and confirms what we said earlier. You must treat the HSA in California as a regular investment account, with the exception that all capital gains, both long term and short term, as taxed as ordinary income.
This because the California Instructions state "California taxes long and short term capital gains as regular income. No special rate for long term ...."
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March 13, 2025
2:29 PM