topic CA sources income in State tax filing

CA sources income

tdo061803 — Thu, 26 Mar 2020 11:10:25 GMT

Dear experts,

I am a nonresident the entire year of 2019 and I have an investment account with a financial brokerage company that has an office in CA. There in the account I have some funds.

Do I need to pay tax because the office is in CA?

How do I figure out whether the funds I have are considered CA sources?

CA tax

For purposes of computing “taxable income of a nonresident or part-year resident” under paragraph (1) of subdivision (i) of Section 17041 , income of nonresidents from stocks, bonds, notes, or other intangible personal property is not income from sources within this state unless the property has acquired a business situs in this state, except that if a nonresident buys or sells such property in this state or places orders with brokers in this state to buy or sell such property so regularly, systematically, and continuously as to constitute doing business in this state, the profit or gain derived from such activity is income from sources within this state irrespective of the situs of the property.

thanks,

Re: CA sources income

Hal_Al — Thu, 26 Mar 2020 15:14:42 GMT

Q. Do I need to pay tax because the office is in CA?

A. No.

Re: CA sources income

tdo061803 — Thu, 26 Mar 2020 16:27:50 GMT

Thank you, that answered my first question!

Can anyone help me with my second question?

Re: CA sources income

Hal_Al — Thu, 26 Mar 2020 16:32:40 GMT

What's the question?

Re: CA sources income

tdo061803 — Sun, 29 Mar 2020 07:35:37 GMT

How do I figure out whether the funds I have are considered CA sources?

Re: CA sources income

Hal_Al — Sun, 29 Mar 2020 11:56:09 GMT

The funds in your account, with a stock broker, located in CA, are not normally CA source funds. If that is your only connection to CA, you do not need to file a CA return. For example if you own shares of Exxon stock, a Delaware corporation, you do not file a DE tax return for the dividend income.

If you have sophisticated investments, like partnerships, you need to direct that question to your broker. Although the paper work that comes with the 1099-Div or K-1 usually tells you how to handle states.