Deferred gain on Sale of Personal Residence in California

[mglimbach]

There is a confusing section for CA regarding the sale of personal residences. It asks you to enter your previously deferred gain, and wants to use that to calculcate the overall gain on your property (it does not say if you had a gain within the last two years include it). According to the CA FTB site, CA conforms with the Feds, which allows you to exclude gains of up to $500K every two years as a married couple. Am I misinterreting something here?

[JoannaB2]

Under federal Section 121 exclusion, the amount of gain excluded from gross income with respect to any sale or exchange of a principal residence is limited to $500,000 ($250,00 for married filing separate). You're eligible for the exclusion if you have owned and used your home as your main home for a period aggregating at least two years out of the five years prior to its date of sale. However, you're not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home. 

California conforms to federal ruling.  If all of the above applies to you, you do not need to enter the amount of gain, if any ; skip that line or enter zero on California form.  You can respond back to us to let us know if the above step/s solve your issue.

[mglimbach]

Thank you for your assistance and resolving my issue.  

I would suggest that the software instructions should be changed to say “Enter deferred gain (if applicable” and a footnote as you provided to reduce the confusion for CA filers who are not tax experts.