California Part-Year return: Prior Year Carryover Loss as if CA Nonresident for All Prior Years.

[Deth_n_Taxes]

I became a CA resident in 2014.  For my 2016 return, I had no capital loss carryover, but incurred a large capital loss in 2016 (let's say 15K).  For 2017, I have a capital loss carryover (let's say 12K).  Mid-2017, I moved to another state.  I am filing a part-year resident return for CA.  

TT asks me these two questions: (1) Prior Year Carryover Loss as if CA Resident for All Prior Years, (2) Prior Year Carryover Loss as if CA Nonresident for All Prior Years.  

For question 1, TT automatically added a figure (the 12K).  For question 2, TT wants me to put the answer in.  I think that because I had no carryover going into 2016, the answer is zero.  But, I'm not sure.

Thanks!

[TerryA · Accepted solution]

Question 2 is asking for your net carryover loss from property located in Calif - real estate, etc. Those would count on your Calif nonresident return while gain/loss on sale of things like stock wouldn't.

[mfm-ca]

Thank you for posting this.  We are in a very similar situation.  We moved from CA to TX in October 2018.  The sale of our CA house closed escrow that same month, leaving us with a large capital gains bill (greater than the $500k exemption).

TurboTax kept prorating our carryover loss based on the date we last lived in CA.  Like the OP, Entry #1 was set to our total carryover loss by TurboTax.  Entry #2 was defaulted to zero.

The amount of the carryover loss from 2017 came from the sale of a house (located in CA) my wife and her siblings inherited years ago and ended up selling for a loss a few years back.

Once I entered the full amount of the carryover loss into Entry #2, the entire carryover loss was applied to the capital gains for the CA part-year return as the sum of two prorated calculations.  Is this correct?

[TerryA]

#2 isn't "defaulted" - every user has to enter that since TT/Calif has no way of knowing how to allocate that. I think that's computed on the "Calif Schedule D Worksheet for Nonresidents and Part-Year Residents" based on your entries there (since you are Calif part-year residents for 2018). It sounds like your total capital gains/losses/carryovers are Calif source. If so, then the "Calif-source" capital gain/loss in line 13, Column E of Schedule CA (540NR) should be the same as Column D, Total amounts.

[mfm-ca]

It sounds like your total capital gains/losses/carryovers are Calif source.

- They are, for the carryover losses remaining after 2017

If so, then the "Calif-source" capital gain/loss in line 13, Column E of Schedule CA (540NR) should be the same as Column D, Total amounts.

- They are, provided I set Entry #2 (CA Nonresident for All Prior Years) above to be the same as Entry #1 (CA Resident for All Prior Years)