Unfortunately Dave you are incorrect. And the Lacerte program does track federal and CA traditional IRA basis differences. And, as I stated in my 1st response to you Lacerte will use the 8606 form for CA and put "California Form 8606" on the top of the page. Then it does the computation for CA for the taxable portion and non-taxable portion of the IRA distribution. Why CA doesn't have its own F8606 is beyond me but CA does accept that there are differences in CA and federal IRA basis because of the early years of reduced allowable IRA contribution amounts on the CA tax return. The fact that CA doesn't have its own version of F8606 does not mean that differences in fed and CA basis are ignored! So it appears that Turbo Tax is lacking in its ability to prepare CA tax returns correctly. Very disappointing...and I guess a waste of my money.
The Guidebook to CA Taxes (the CA version of the Master Tax Guide) states that the CA treatment of distributions from IRA's is the same as the federal, EXCEPT (1) Contributions that were not allowed as a CA deduction and (2) Interest earned in 1975 and 1976 on contributions. So there it is...in black and white. And TT is not allowing for this difference.
