TurboTax CA 540 Non-Resident problem

[uwprf]

I sold a home/house in 2021 in CA as a non-resident (Moved to FL in 2020).   The sale resulted in a net capital gain.   TurboTax Federal handled this without an issue.

That capital gain was transferred to TurboTax CA (I can see it when I look at the CA forms and on the TurboTax CA input screens).   Problem is that TurboTax CA says I owe $0 taxes.  I wish that was the case but it isn't.

I've tried support ... other than having me re-enter the data and go thru the screens 5 times, no help.

[LeonardS]

California conforms to the federal exemption on capital gain for the sale of your main home.  You can exclude $250,000 filing single and $500,000 filing jointly. The home must have been your main home for any 24 months in the five years prior to the sale to qualify. If your home sale was exempt you would owe no California tax.

[uwprf]

I should have explained a little more ... the net capital gain we had was after the $500K Section 121 exemption.   It should be taxable in California.

[JulieS]

California also offers a $9,606 standard deduction for married filing jointly. Is it possible the $500,000 and $9,606 standard deduction covered your entire gain?

[uwprf]

The capital gains was more than the $9606 standard deduction (glad to say :-)), so that isn't what is happening.   I am pretty sure the TurbTax CA has an issue in handling this kind of capital gain.

[uwprf · Accepted solution]

TurboTax has acknowledged that their 2021 California State Tax software does NOT handle this situation/transaction correctly when using the "Step by Step" data entry method.   Their current work around is to use the "Forms" entry mode and manually enter the required data innto the State Return ... not a great solution as I had to do a lot of reading of instructions to get the data from my Federal Return into the right places on the State Return, but it does work.

Also, the error checks that TurboTax runs prior to you filing this return does NOT catch this issue ... it will tell you everything is "good to go" ... it is NOT good to go.