Level 13

Investors & landlords

Assuming you were a resident of California when you sold the securities, there's no separate "reporting" of the sales over in the California income tax return.

Mechanically, your federal taxable income becomes the starting point for reporting your California taxable income.  It's reported on line 13 of the Form 1040 ( ) and then you make adjustments to that number, e.g., your state income taxes are not an itemized deduction for State purposes, to come to your California taxable income.  Adjustments to reported capital gains and losses arising from security sales can occur, but they are pretty darn rare.  Absent any needed adjustments to capital gains and losses from security sales the net gain or loss reported on the federal income tax return is just part of your California taxable income.

California doesn't use the concept of "capital gains" in determining the tax to assess.  Capital gains are taxed as ordinary income, so these rates also apply to any gain on the sale of personal or investment property.  

Tom Young