If you filed jointly with your spouse, and she had enough income to meet the filing threshold, returns should have been filed for the intervening years. Otherwise, you don't need to file California returns for the intervening years, but you do still need to recalculate the capital loss carryover as if you had lived in California. See the 2024 California FTB Instructions for Schedule D:
Line 6 – California capital loss carryover from 2023
If you were a resident of California for all prior years, enter your California capital loss carryover from 2023. However, if you were a nonresident of California during any taxable year that generated a portion of your 2023 capital loss carryover, recalculate your 2023 capital loss carryover as if you resided in California for all prior years...Enter your California capital loss carryover amount from 2023 on line 6.
See also the page on part-year residents and nonresidents (the link to Pub 1100 is no longer available).
Near the end of the instructions is the "worksheet" for capital loss carryovers:
California Capital Loss Carryover Worksheet
- Enter loss from Schedule D (540), line 11, as a positive number.
- Enter amount from Form 540, line 17.
- Enter amount from Form 540, line 18.
- Subtract line 3 from line 2. If less than zero, enter as a negative number.
- Combine line 1 and line 4. If less than zero, enter -0-
- Enter loss from Schedule D (540), line 8, as a positive number.
- Enter the smaller of line 1 or line 5.
- Subtract line 7 from line 6. This is your capital loss carryover to 2025.
When you prepare the California return in TurboTax, at the screen "Here's the income that California treats differently", under Investments, you can click on the item "Capital Loss Carryover from Last Year" and make any needed adjustments.
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