2023 Capital Loss Carryover for CA State Tax - how to enter in 2024

[MNYL]

Hi All,

CA Form 540 Schedule D, Line 6 is blank on Turbo Tax, it didn't transfer from 2023 and ask to enter "capital loss carryover".  Some post mentioned to use the 2023 CA Capital Gain or Loss Adjustment in Schedule D's line #8 and minus $3000, which ended up is the same number as the capital loss of federal return.   But the way some post experts said to calculate using 2023's CA 540 & Schedule D, which ended up to be the same number as Schedule D's Line #8 ($3000 more on capital loss carryover than the Federal return).  

Please kindly confirm as I am not sure which is the correct number to put on 2024 tax return.  I need to submit asap before 4/15/25 due date.   Many thanks for everyone's assistance!!

[MonikaK1]

Check your Federal return to see how any capital loss carryover affected your Federal AGI, which is the starting point for the California return. You would only need to enter any adjustment/ difference on the California return.

The California tax return Form 540 package will include a California Schedule D if you have any California capital gains and losses from the entries you make while completing the Federal return. In some cases, there may be California differences in how the gains and losses are calculated. 

TurboTax will ask questions in the California interview in order to capture any information needed to adjust the entries on the California Schedule D. If there aren't any differences, then any California Schedule D prepared by TurboTax will show the same gains and losses as the Federal return.

The California Form 540 starts with your Federal Adjusted Gross Income and summarizes any differences between Federal and California on Schedule CA where the additions and subtractions are listed.

Yes, California also allows capital loss carryovers. However, unlike the federal government, California makes no distinction between short-term and long-term capital gains. It taxes all capital gains as income, using the same rates and brackets as the regular state income tax.

See the Instructions for California Schedule D for more information. Near the end of the instructions is the "worksheet" for capital loss carryovers:

California Capital Loss Carryover Worksheet

1. Enter loss from Schedule D (540), line 11, as a positive number.
2. Enter amount from Form 540, line 17.
3. Enter amount from Form 540, line 18.
4. Subtract line 3 from line 2. If less than zero, enter as a negative number.
5. Combine line 1 and line 4. If less than zero, enter -0-
6. Enter loss from Schedule D (540), line 8, as a positive number.
7. Enter the smaller of line 1 or line 5.
8. 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.