The California taxable income of a nonresident individual is calculated as if all income were earned in California. The Federal Adjusted Gross Income (AGI) will be adjusted using the California adjustments to arrive at AGI from all sources. The AGI from all sources is used to determine the taxable income. After the taxable income is calculated, it is prorated using a percentage of the AGI from California sources divided by the AGI from all sources. This prorated tax is the California tax.
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