The short answer to your question is that you will "probably" pay taxes on this property sale (if you had a capital gain or you recaptured depreciation) to both California and Oregon. The long answer to your question will take some time and space to explain . . . as will the qualifier "probably" in the preceding sentence. We will do so below.
To begin, it is a fact that as an Oregon resident you are taxed on all of your income, worldwide, no matter what the source, by the state of Oregon. It is also a fact that the sale of property in California is considered "California-source" income; and so that requires paying taxes also to California.
The following webpage will confirm that the sale of California real property is California-source income:
https://www.ftb.ca.gov/individuals/filertn/nonresidents-part-year-residents.shtml#RealEstate
Normally, where a taxpayer has to pay taxes to two states on the same item of income (which often happens when a taxpayer lives in one state and has a wage-earning job in another state), they are then allowed to take a tax credit on their home state return for taxes paid to the other state. Similarly, the same principles typically apply to non-wage taxation by more than one state.
However, Oregon and California have a "special" relationship agreement
when it comes to interstate taxation. Instead of the usual method of claiming a state tax credit on the taxpayer's home state return, instead the tax credit here is claimed on the
nonresident California return.
While TurboTax can certainly compute this tax situation correctly, it
can be tricky. The "ordering" sequence of state tax preparation is crucial. In order to take the state tax credit correctly, for the double-taxed income, you would want to complete your federal return first, your Oregon resident return second, and then your California nonresident return third.
That said, all of the above may not even be necessary, if you don't have to file a California tax return in the first place. In that instance it would mean reporting the California property sale on your federal and Oregon tax returns only.
To determine if you need to file a California tax return or not, you can look to the following California Franchise Tax Board webpage:
https://www.ftb.ca.gov/individuals/fileRtn/
You can use the hyperlink there for nonresidents, and then the chart that accompanies the link. It will show you if you need to file in California, based on your household size and California-source income.
Thank you for your kind attention, and for asking this important question.
