In 2023, I sold an investment property at a loss that I acquired in 2022. The property is in CA and I live in UT. There was never any income. Do I need to file in CA.

[curtistripoli]

This was a massive remodel that went the wrong direction and I lost money.

[rjs]

I don't know whether you are technically required to file in California. But the sale will be reported to the IRS, which will pass the information on to the California FTB. In the absence of a tax return, the FTB will assume that the amount you received for the property is all profit, and you will get a notice from them telling you that you have to pay CA tax on that amount. So, to avoid trouble, you should file a return to show the loss.

[curtistripoli]

That makes sense.  Thanks.

Where do I report this in TurboTax?

[rjs]

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@curtistripoli wrote:

Where do I report this in TurboTax?

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You enter it in TurboTax under Investment Income, the same place you would enter a sale of stock. If you are using TurboTax Online you will have to use the Premium version, or you can use any version of the CD/Download Desktop TurboTax software.

[TomD8]

From the California FTB website:

"All taxpayers must report gains and losses from the sale or exchange of capital assets."

https://www.ftb.ca.gov/file/personal/income-types/capital-gains-and-losses.html