"Prior Year Carryover Loss as if CA Nonresident for All Prior Years"

[dkaemmerer]

I moved out of CA last year part way through the year.

I'm being asked two questions in the "Allocating Capital Loss Carryover" section of the CA state taxes.

1) Prior Year Carryover Loss as if CA Resident for All Prior Years.

2) Prior Year Carryover Loss as if CA Nonresident for All Prior Years.

The first field was automatically filled in for me (20K) based on losses from stock sales in prior years that were sold for less than purchased.

But I'm unclear on what to put for the second question.  Should I put the same 20K since I would have had the same stock sales at a loss regardless of where I was a resident / nonresident?

[PatriciaV]

See the post by JohnB5677 below.

For more info, see FTB Pub. 1100, Taxation of Nonresidents and Individuals Who Change Residency.

[Edited 3/24/2022 | 8:33 AM PDT]

[dkaemmerer]

Why do gain/loss from stock sales count towards Question 1 but not Question 2?  That discrepancy doesn't make sense to me.

[JohnB5677]

@dkaemmerer You were correct.

The description of line (1) is "If you were a nonresident of California during any taxable year that generated a portion of your 2020 capital loss carryover, recalculate your 2020 capital loss carryover as if you resided in California for all prior years."  This is stated to be $20K. 

See line 6 California Capital Gain or Loss Adjustment

Line (2) states Prior Year Carryover Loss as if CA Nonresident for All Prior Years. In this case, you were a non-resident for the entire time that you incurred the loss.  so you would again enter $20K.

[jstar]

@JohnB5677 @PatriciaV  Sorry but these two answers seem to conflict, and are confusing.

@PatriciaV states that (2) is only if the property that generated the loss was a CA property.  Since it was stock, then it should be zero

@JohnB5677 states it has that you would enter $20K because you were non resident the entire time you generated the loss.  But if its a sales of stock, and not CA property, then shouldn't it be $0 since you were a non-resident the prior years?

[PatriciaV]

@jstar Please clarify if you were a resident of California when these losses were generated. The original poster moved from California during 2021.