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I just have capital loss (CL) from stock trading all the years and using TT to do my taxes for a long time. No other gain or losses from other sources.
QUESTIONS:
1) running my state tax now, shouldn't my capital loss carryover from 2023 be the same?
2) Why TT said : I have capital loss carryover of $13,800 on my federal return and still asking for my California CL? Should it be the same in my case - $13,800?
Another Questions that I don't really understand:
I fully understand long & short terms capital gain and loss used in federal calculation. What I don't understand is why that also come up in State taxes?
1.) Let say, I have $5,000 long term only for 2024 and will pay 15% federal taxes. Do I also pay state taxes for the $5,000 gain? That is double taxation if yes.
2.) Less say, I have $5,000 long term loss instead, I will be deducting $3,000 of my ordinary income leaving $2,000 carryover to next year. Does the state filing deduct my state income for the $5,000 loss?
Thanks
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Your California capital loss carryover could be the same as the Federal, or it could be different. California law differs from Federal law in some areas that affect the calculation of capital gains and losses, particularly depreciation. Also, unlike the federal government, California makes no distinction between short-term and long-term capital gains. It taxes all capital gains as income, using the same rates and brackets as the regular state income tax.
See the Instructions for California Schedule D for more information. Near the end of the instructions is the "worksheet" for capital loss carryovers:
California Capital Loss Carryover Worksheet
When you prepare the California return in TurboTax, at the screen "Here's the income that California treats differently", under Investments, you can click on the item "Capital Loss Carryover from Last Year" and make any needed adjustments.
Look for this screen to appear in the California interview (screenshot below):
Yes, states that have an income tax are taxing you on many of the same income items as the Federal return does. States are separate governmental entities with their own laws and their own budgets. A few states, such as Alaska and Texas, get their needed revenue from other types of taxes instead of an income tax.
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