How does casualty loss impact basis of house for California taxes?

[Banjer]

Taxpayer has a casualty loss that will lower taxes in California for 2024 (but not on the Federal return since it is not related to a declared disaster).

Taxpayer also plans to sell the house in 2025.  I am thinking forward to the capital gains taxes that will be owed upon sale of the house.

My question: How does the casualty loss in 2024 impact the cost basis of the house? Will the California and Federal cost bases differ if the casualty loss is taken in California?

[MonikaK1]

Yes, the California basis will be different from the Federal basis if there were adjustments to basis for California that are different from the Federal adjustments.

From the California FTB:

If your gain exceeds your exclusion amount, you have taxable income. File the following forms with your return:

• Federal Capital Gains and Losses, Schedule D (IRS Form 1040 or 1040-SR)
• California Capital Gain or Loss (Schedule D 540) (If there are differences between federal and state taxable amounts)

Visit Instructions for California Schedule D (540) for more information.