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CA and AZ Both Taxing AZ Source Capital Gain

Hi.  My issue is I am being taxed twice on AZ source income (capital gain) since I am now a resident of CA.  I sold my AZ home in June 2023; however, I became a resident of CA end of May.  So CA is taxing me on all my source income including the home sale since I am a resident of CA now, and AZ is also taxing me on the capital gain since the home was in AZ.  I did not qualify for the capital gain exclusion.  Can I file forms 301 and 309 to get a tax credit from AZ for the double taxation amount? Or should I file CA Schedule Schedule S to get the tax credit from CA?  I am filing a CA Form 540NR and AZ Form 140PY.

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2 Replies
CatinaT1
Expert Alumni

CA and AZ Both Taxing AZ Source Capital Gain

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TomD8
Level 15

CA and AZ Both Taxing AZ Source Capital Gain

California will not grant its residents an "other state credit" for taxes paid to Arizona.

https://www.ftb.ca.gov/forms/2023/2023-540-s-instructions.html

 

You must request the credit on your AZ tax return.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.
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