2017 California Nonresident Income Tax Return

[Stonestreetw]

I am being directed by the State of California to submit a 2019 non-resident tax return for the capital gains on the sale of a house that had been rented since 2008.  Can Intuit help me with that process?

[DoninGA]

Was the rental property sold in 2018 or in 2019?

[Stonestreetw]

The property was sold in 2017...

[Stonestreetw]

My Federal taxes via Intuit capture the expense associated with the loss of rental income while the house was prepared for sale.  The carryover loss from previous years is also listed as well as the expenses associated with preparing the house for sale.  

I hope to capitalize on that info to populate the California nonresident form 540 NR.  

[DoninGA]

The rental property sale should have been reported on a 2017 nonresident CA tax form 540NR.

I will ask for assistance from a California SuperUser.

@Lisa995  Could you help with this California nonresident sale of rental property?

[Lisa995]

You've had a rental property in California since 2008 and you've never filed a CA non-resident tax return this whole time?  

I'm honestly not well versed with how the state modules work, especially non-resident ones.    I would think that when you reported the sale on the federal return, since it was located in CA, TurboTax would have let you know a CA return would need to be done as well.

[Stonestreetw]

Hello Lisa,

I wasn’t directed by Turbo Tax to complete a CA tax return as you suggested.  I paid, via Chicago Title, the California withHolding (3.33%) to the Franchise Tax Board which in my case amounted to $30,136.50 on August 15, 2017.  I presumed that was the end of it and completed my taxes as guided by Turbo.  Please note that I also had a loss (rental income) carried forward which affected my 2017 taxes.  

I was not a resident of CA post 2010 when I returned from an International assignment to Indonesia.  While working to prepare 540NR the form seeks my total federal AGI from form 1040, line 37 and uses that amount as the basis of my resulting tax.  I fail to see why they should have any ability to Tax that income whatsoever...

[Lisa995]

It will use the fed AGI, but down on Lines 32-39 of the 540NR it should do the computation for what portion is CA income vs. total income and compute the CA tax by that % ratio.

[Stonestreetw]

Hi Lisa,

Could I receive the Intuit version of 540 NR that is populated with detail from my 2017 Federal form?  It would be nice to progress through the lines with detail regarding what should be considered or indeed what CA is looking for, in addition to having a calculation feature to determine the resulting tax.

I don’t know if you can do that for me - if not can you pass on my request?

Best regards,

...Bill

[Stonestreetw]

Hi Lisa,

Are you working my request for a CA 540 NR form linked to info in my 2017 form 1040.  I must provide CA with my completed 540 NR prior to 29 June and if I can’t send it electronically via Intuit, I must allow enough time for snail mail to deliver it.

Thanks,

...Bill

[Hal_Al]

Nobody here can work on your return.

You may want to go to a tax pro, to get this done.  If I understand your situation, you may have a big refund coming ($30,136.50 withholding?)

That said, in TurboTax,  you need to re-enter the 2017 software. In the personal info section, indicate that you made money in another state (CA). that will get Turbotax (TT) to generate a CA non-resident return.

You have other issues. You do not get to deduct "the loss of rental income while the house was prepared for sale" on either the federal or state returns.  After filing a CA return, you may have to file an amended return for your home state, to take (or adjust) the credit for tax paid to another state.