Do I owe California state income tax on the sale of California rental real estate if I reside in 100% of the year in Illinois?

[cfaeyoung]

If we do owe California tax, do we get a credit for our Illinois state taxes, or do we owe state taxes in Illinois, too, because we are residents of Illinois?

[Coleen3 · Accepted solution]

Yes. The state of California will require you to pay tax on the profit.

How California taxes residents, nonresidents, and part-year residents

• California residents - Taxed on ALL income, including income from sources outside California.
• Nonresidents of California - Taxed only on income from California sources.
• Part-year residents of California - Taxed on all income received while a resident and only on income from California sources while a nonresident.

The gain or loss from the sale of real estate has a source where the property is located. If you sell your California real estate and move out of state, the gain is taxable by California. The gain is taxable by California even if the real estate is sold when you are a nonresident.

https://www.ftb.ca.gov/individuals/filertn/nonresidents-part-year-residents.shtml#how_taxed

[cfaeyoung]

Thank you so much!

[Critter]

To get the credit for the taxes paid on the CA return  on the IL return you MUST complete the non resident CA return FIRST and then the IL return even if you will not file them in that order.

[morganvams]

I am in this position for tax year 2019. My wife and I have lived in a different state for 8 years, but still belong to a real estate investment partnership in California. We sold some of that land in 2019. How do we report our share of the proceeds and pay the tax? (Meaning what form(s)

[morganvams]

I am in this position for tax year 2019. My wife and I have lived in a different state for 8 years, but still belong to a real estate investment partnership in California. We sold some of that land in 2019. How do we report our share of the proceeds and pay the tax? (Meaning what form(s)