Allocating Capital Gains (losses) as a partial year resident of CA

[Steerpike58]

I moved from AZ to CA in March 2022. I'm filing in AZ as a non-resident, and in CA as a part-year resident for 2022. 

I got about $7,000 net in Capital Gains in 2022.  All from either stocks, or common stock mutual funds (no bonds, no state exempt stuff). I'm choosing to allocate income based on a proportion of days resident in each state (23%/77%). There's a question in TT that reads: 

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"Allocating Capital Gain or Loss

Enter the amount of net gain (or loss) received from California Sources as if you were a nonresident for the entire year. Then enter gain (or loss) received while a California resident, and received from California sources as a nonresident."

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There are four boxes -

First is "Net gain/loss as if CA resident for full year" - this is prefilled with the $7,000 figure and can't be edited (this number comes straight from my 1099 brokerage statements). 

Second box is "Earned/rec'd from CA source as if CA nonresident for full year"

Third box is "Earned/rec'd while a CA resident"

Fourth box is "Earned/rec'd from CA source while a CA nonresident". 

If I do a 'show form' on this screen, I see that this is all for the Schedule D worksheet for nonresidents and part-year residents. 

First of all - since all the money is from stock mutual funds and common stocks, I'm assuming NONE of it is "CA source" specific - so I can enter $0 for both boxes (2nd and 4th) that mention 'CA sources'. So that leaves only the third box - "Earned / rec'd while a CA resident". For this, I am thinking I should put the original amount ($7,000) multiplied by the percentage of time spent in CA (77%) - so $7,000 * 0.77 = $5,390. 

Does this sound like the correct thing to do? I don't want to go with actual dates the gains/losses were received because there were hundreds of transactions across numerous mutual funds. 

Thanks! 

[AmyC · Accepted solution]

Yes, that is an acceptable solution due to the number of transactions. CA should only be taxing what was reasonably received while living there.

Note, CA always has the option to request additional information.

[Steerpike58]

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@AmyC wrote:

Yes, that is an acceptable solution due to the number of transactions. CA should only be taxing what was reasonably received while living there.

Note, CA always has the option to request additional information.

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A casual review of the numbers suggest 'most' of the cap gains were due to transactions that occurred while I was in CA, but as long as what I've done is acceptable, and won't result in a penalty if reviewed, I'll stick with what I did. 

I did what I often do in TT when I'm not sure how to answer; I put in a range of numbers, smallest to largest, and see how that affects my tax owed. In this case, worst-case scenario was only about $100 more, so I think I'll be fine.  Sometimes, I see a complicated question like 'how much of the amount 'x' was derived from California investments' ... so I put in 0%, 50%, 100% and ... sometimes, there is no change whatsoever so no point struggling to find the answer!