Solved: Part year resident of CA Nov-Dec 2016. Sold VA home-profit $200K. CA income was $0 in Nov- $7K in Dec 2016. TT says I owe CA about $335K for living 2 mo in CA. Why?
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k9yjy
New Member

Part year resident of CA Nov-Dec 2016. Sold VA home-profit $200K. CA income was $0 in Nov- $7K in Dec 2016. TT says I owe CA about $335K for living 2 mo in CA. Why?

I can't determine where TT is picking up all the income to determine I owe CA about $335K when my CA income for 2016 was only $7K.  The $200K I made on sale of our Virginia home should not be used to calculate CA taxes.

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Accepted Solutions
TerryA
Level 7

Part year resident of CA Nov-Dec 2016. Sold VA home-profit $200K. CA income was $0 in Nov- $7K in Dec 2016. TT says I owe CA about $335K for living 2 mo in CA. Why?

It sounds like you haven't allocated your income properly to Calif. Here's how it works in TT/Calif:

The Calif nonresident/part-year return, Form 540NR, computes your income and tax as if you were a resident the entire year, then computes a net tax rate by dividing the total tax by total taxable income. Your California-source taxable income is then multiplied by that net tax rate to determine your California tax. You can see this on Form 540NR lines 31-37.

So you do report everything but towards the end of the interview (Nonresident Adjustments) is where you allocate the California-source income which is multiplied by the net tax rate. See Form 540NR, lines 31 - 42 and Schedule CA(540NR). So for each federal income item on the left, be sure to enter only the Calif-source portion of that total: 1) all received while living in Calif, plus 2) income from a Calif-source (rental property there; property gain/loss located there; etc) while a nonresident, etc. If none, enter 0.


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1 Reply
TerryA
Level 7

Part year resident of CA Nov-Dec 2016. Sold VA home-profit $200K. CA income was $0 in Nov- $7K in Dec 2016. TT says I owe CA about $335K for living 2 mo in CA. Why?

It sounds like you haven't allocated your income properly to Calif. Here's how it works in TT/Calif:

The Calif nonresident/part-year return, Form 540NR, computes your income and tax as if you were a resident the entire year, then computes a net tax rate by dividing the total tax by total taxable income. Your California-source taxable income is then multiplied by that net tax rate to determine your California tax. You can see this on Form 540NR lines 31-37.

So you do report everything but towards the end of the interview (Nonresident Adjustments) is where you allocate the California-source income which is multiplied by the net tax rate. See Form 540NR, lines 31 - 42 and Schedule CA(540NR). So for each federal income item on the left, be sure to enter only the Calif-source portion of that total: 1) all received while living in Calif, plus 2) income from a Calif-source (rental property there; property gain/loss located there; etc) while a nonresident, etc. If none, enter 0.


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