I Live and work in Wisconsin, and also have some income from California. I don't know where to deduct the California income on my WI return, and vise versa.

[lvhaccounts]

Turbo Tax doesn't say anything about income (from installment sale of business property) from one state while living in another. According to Turbo Tax, I've completed my Wisconsin return, but I haven't found any reference to income from another state, for which tax will be due in that state instead of Wisconsin.

I suspect when I do the California return, I'll run into the same problem.

[DanielV01]

When you live in one state and have income that is taxable in another, both states will tax the income.  However, your resident state will give you a credit for the tax you pay to the other state on the same income.  

Prepare a California nonresident return first.  California will only tax the portion of income that is allocated, or designated, to California.  (In this case, if it is an installment sale of business property, you might have to enter it in manually on the California allocation screens).  However, once California figures out the tax on that income, the information is transfered over to your Wisconsin return.

Wisconsin taxes all of your income because your resident state is allowed to tax all of your income regardless of where you earn it.  However, you will see a section dealing with "Credit for Taxes Paid to Another State".  You should see the amount of income and California tax in this section.  Wisconsin will give you a credit for the smaller of what California is taxing the income, or how much Wisconsin would tax the same income if the income was earned only in Wisconsin.