As part of the Allocating Capital Gain or Loss section, I get asked a few questions for an individual sell:
* Earned/Rec'd from CA Source as if Nonresident for Full Year
* Allocation Type
* Earned/Rec'd While a CA Resident
* Earned/Rec'd from CA Source While a CA Nonresident
I'll use the following example for a small -$16 January sell. I moved TO California in October, so this sell occurred in Washington.
How does "California Source" apply to stocks?
In a real estate example, it's possible to earn money in California even though you're in another state. If you sell a property in CA, you made money in CA. Therefore, you could consider that a Californian source of income.
However, stocks aren't tied to an area. How should I answer these questions? For example: for "Earned/Rec'd from CA Source as if Nonresident for Full Year", shouldn't I put $0 because, if I were a non-resident, then the sell would be a non-CA source?
Yes, The capital gain income from the sale of the stock is taxable by California if you were a California resident when you sold the stock.
@LeonardS So what would the answers to the 4 questions be?
It appears that your entries on the Allocating Capital Gain or Loss page are correct based on your CA residency dates. Because the $16 loss was realized when you were not a CA resident, it was proper to allocate the entire loss to your state of residency which at the time of the sale was Washington.
@GeorgeM777 If the transaction happened in WA, shouldn't I put down:
Yes, and thank you for the additional information. The image provided in the earlier post had a low contrast and was difficult to read. But yes, if the transaction at issue took place while you were a resident of WA, then none of it was from a CA source, and furthermore, none of it should be allocated to CA.
What if the stock transaction loss was generated when I was I CA resident? Can the loss be carried over to next year when I was a nonresident?
If you sold the stock while a California resident, report the income or loss on your CA Part Year Resident return.
Depending on your tax situation, you may not be able to take the loss in 2024, then it will carry over to the next year, but you do have to use it if you're able to.
Here's more info on Allocating Income for a Part-Year Resident and CA Instructions for Schedule CA.