I live in WA and own a rental property in CA. If I am filing with a single status where I gained $100k from the sale, what is the tax calculation?

[anonymous-fin]

I live in WA and own a rental property in CA. If I am filing with a single status where I gained $100k from the sale (including depreciation recapture), what is the tax calculation?

Am I correct in saying:

1. The gain is treated as regular income

2. If so, is it as simple as plugging $100k into this income tax calculator for California? https://smartasset.com/taxes/california-tax-calculator#kzBqr1xhyj where it shows I am taxed at a marginal rate of: Fed 24%, FICA 7.65%, and State 9.3% for a total of $28,943

[Opus 17]

Why do you think that the capital gain would be treated as ordinary income? Even if it was treated as ordinary income, it would not be subject to FICA.

I believe that depreciation recapture is taxed at ordinary income rates, with a cap of 25%, so the recapture might be taxed at 15% or 22% or 24%, depending on your other income.  The rest of the gain would be a long-term capital gain and taxed at the lower capital gains rate.

This is all taxable income on your federal return of course. I believe that you will be required to file a California nonresident return to report and pay California tax on this California source income. Since Washington state does not have a state income tax, you should not have to deal with it on a Washington tax return.

@Carl can you add anything?

[Critter-3]

@anonymous-fin 

If you are using the Downloaded version then you can do a test or what if return ... do NOT try this with the ONLINE version   ...  

https://ttlc.intuit.com/questions/1933977-i-sold-my-rental-property-how-do-i-report-that?jump_to=ans...

This is my mini version of  a tutorial  that should be in the downloaded program: 

What is Forms Mode?

Forms Mode lets you view and make changes to your tax forms "behind the scenes."

If you're adventurous, you can even prepare your return in Forms Mode, but we don't recommend it. You may miss obscure credits and deductions you qualify for, and you may forget to report things that will come back and haunt you later.

Forms Mode is exclusively available in the TurboTax CD/Download software. It is not available in TurboTax Online.

Related Information:

• Why would I use Forms Mode?
• How do I switch to Forms Mode in the TurboTax for Windows software?
• How do I switch to Forms Mode in the TurboTax for Mac software?

If you want to play around with different figures and tax scenarios without affecting your original return you can ….

• >>>In the TurboTax CD/Download software by creating a test copy: 
• 1.  Open your return in TurboTax. 
• 2.  From the File menu, choose Save As. 
• 3.  Give the copy a new name to distinguish it from the original (for example, by adding "Test" or "Example" to the file name). 
• 4. Click  Save. You are now safely working in the test copy and anything you do here will not affect the original. 
•  https://ttlc.intuit.com/questions/1900642-how-to-make-a-test-copy-of-your-return

• >>  use the WHAT IF tool: 
• - Click Forms Icon (upper right of screen) or Ctrl 2 (forms view) 
• - Click on the Open Form Icon 
• - In the “Type a form name.” area type What-If (with the dash), click on the name of the worksheet - click on Open Form 
• - You will see the worksheet on the right side of the screen; enter the information right into the form 
• - To get back to interview mode - click on the Step-by-Step Icon (upper right of screen) or Ctrl 1

It's always a good idea to make a backup copy of your tax data file, in case your original gets lost or corrupted. Here's how:

1. From the File menu in the upper-left corner of TurboTax, choose Save As (Windows) or Save (Mac).
2. Browse to where you want to save your backup.
   • Tip: If you're saving to a portable device, save it to your computer first to prevent data corruption. Then, after completing Step 4, copy or move the backup file to your device.
3. In the File name field, enter a name that will distinguish it from the original tax file (for example, add "Backup" or "Copy" to the file name)
4. Click Save and then close TurboTax.
5. Restart TurboTax and open the backup copy to make sure it's not corrupted. If you get an error, delete the backup and repeat these steps.

If you make changes to your original tax return file, repeat these steps to ensure your original and backup copies are in-synch.

Related Information:                             

• Retrieve a Tax File from a Portable Device
• What's the difference between the tax data file and the PDF file?

AND save it as a PDF so you have access to a copy even if you don’t have the program still installed and operational :

• How do I save my return as a PDF in the TurboTax software for Windows?
• How do I save my return as a PDF in the TurboTax software for Mac?

AND protect the files :

• How can I protect the tax files on my computer?

[Carl]

I really can't add anything, as from my perspective the CA tax rules are just as convoluted as NY. I really don't have a clue how CA would treat the gain, other than to say I know they will tax it. As for the depreciation recapture, while I would expect CA to treat that separately when it comes to the maximum tax rate, I can't say I'm definitive on that assumption or that the state would tax it under the same rules the IRS does.

[TomD8]

California does not have a lower rate for capital gains. All capital gains are taxed as ordinary income.

https://www.ftb.ca.gov/file/personal/income-types/capital-gains-and-losses.html

[anonymous-fin]

From what I've read online, CA treats the capital gain on a rental property as ordinary income. Also see Tom's response below. I was hoping somebody could help confirm.

[Opus 17]

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@anonymous-fin wrote:

From what I've read online, CA treats the capital gain on a rental property as ordinary income. Also see Tom's response below. I was hoping somebody could help confirm.

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According to this, CA does not have a lower capital gains rate.

https://www.ftb.ca.gov/file/personal/income-types/capital-gains-and-losses.html

However, you will still pay the lower capital gains rate on your federal return, and you don't pay FICA, so your original estimate is incorrect.  Your total tax is likely to be 15%-18% federal (if you are in the 24% bracket for ordinary income, your recapture is 24% and the rest of the capital gains is 15%) and 10% CA.  No FICA.