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Level 2

Question

Cap Gains for part year CA resident

Forum|Forum|4 years ago
March 25, 2022
1 reply
0 views

I moved from TX to CA in July 2021. I have held several stocks for multiple years while living in TX. In September and December 2021, I sold the stocks resulting in gains and losses with a net overall gain. TurboTax program can allocate each stock transaction net gain or loss by either method: (1) date of sale, or (2) ratio of days I became a CA resident. Which method is correct for my situation?

Level 15

California law allows you to use either option. Under date of sale, your entire capital gain will be taxed by California. The second option will smooth out the gains, so some will be allocated to Texas which has no state income tax.

Try it both ways, but the second option will probably save you tax.

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GoldensunsetAuthor

Level 2

Thanks for replying.

Yes, the second option results in less CA tax, by a significant margin in my case.