Do I have to pay California capital gain tax if I live aboard?

[tianhao64]

Hello friends,

I have a question about state(California) capital gain tax. My situations are:

* Green card holder

* Have been lived aboard for two years

* No US income

* Have a house in CA and rented out. Filed 2019 tax using CA address.

My question is that do I have to pay long/short term capital gain tax to CA?

Thank you!

[ThomasM125]

You will have to pay tax on the income year earned in California, but not on your foreign income since you are away from California for more than 546 days.

[tianhao64]

Thanks, @ThomasM125 . My understanding is that the stock long term capital gain is not considered as CA income. Is that right?

We have been away from CA for more than 546 days already, but we plan to return to CA and start to work around July 2021. Am I still qualify this policy when I file 2021 tax? Thanks again!

[ThomasM125 · Accepted solution]

If you owned stock traded on an exchange, income associated with it would not normally be California income under the safe harbor rule. However, if you were a partner or shareholder in a company located in California, and you were materially involved with the company, then you would have to report  income associated with your investment on your California tax return.

In 2021, you would file as a part-year resident, so the income you earned before you moved back would be factored out before your tax is calculated.