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Example needed for splitting capital gain/loss by state.

Maybe I'm dim but I don't understand TurboTax's response to my input.
Assume I sold XYZ stock in November 2018 and had a gain of $1,619.  I moved to another state in August.
TT copies from the Federal tax section the description, date acquired, date sold, and total gain/loss.  I then enter that amount in the first box "Earned/rec'd from CA source as if Nonresident for full year".  (Why that's even needed is unclear too but so be it.)
Allocation type is set to DATE - Allocate Based on Date Sold.
The CA Tax Due on the top increases by $160.
Since I sold this while no longer living in CA, I enter 0 in the "while CA resident" and the full 1619 in the "while CA NR" box.
To my surprise the CA Tax Due does not decrease?
In fact, even when entering for example 619 while CA and 1000 while NR, which is not factual, the CA Tax Due stays the same??  Regardless of entered split values, tax due remains the same? 
I would assume that this gain would not be taxed at all in CA but instead in my new home state?  What am I doing wrong?

Your guidance is appreciated!


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Accepted Solutions

Example needed for splitting capital gain/loss by state.

One error is including the gain in the Earned/Received from CA sources as if Non-resident for full year.  That should be zero, since if you were a CA non-resident all year, this would not be CA source income.  This could be the entire problem.

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8 Replies

Example needed for splitting capital gain/loss by state.

One error is including the gain in the Earned/Received from CA sources as if Non-resident for full year.  That should be zero, since if you were a CA non-resident all year, this would not be CA source income.  This could be the entire problem.

Example needed for splitting capital gain/loss by state.

Sorry but it's still not clear.
I lived in CA until August, and sold this stock in November.
To reiterate, I was not a NR all year, only from August through December (unless my interpretation of a NR is wrong).
Can you provide the exact values to enter in the "as if NR full year", "while CA resident" and "while CA NR" boxes?
My interpretation --clearly incorrect- is 1619, zero, and 1619 but as said, doing that *does* add to my CA taxes.

Example needed for splitting capital gain/loss by state.

Zero, zero, 1619 is my interpretation.

Example needed for splitting capital gain/loss by state.

Nope, because even then the CA Tax Due does not reduce back.  See my confusion?  Every possible permutation results in taxes added, but never taken out again.  
I'm starting to think this may be a bug but then again, surely someone else would've encountered it already, this late in the "game"?
Thanks for your help thus far!

Example needed for splitting capital gain/loss by state.

I highly doubt there is a bug.  Is there another choice for allocation type, such as manual, because this seems to be when the tax is added?

Example needed for splitting capital gain/loss by state.

Totally agree this "cannot" be a bug, it surely would have been found and fixed by now.
Yes, there is a different option for allocation type which is what I end(ed) up using: "N/A- Not Taxable to CA".
I truly wish TT would provide better explanation and examples.

Since it's in the same list of capital gains, what about my old CA house?  Again, I moved out of CA in August to my new, current state but the home didn't sell until December.  As I 'earned' this money while no longer a CA resident, there is an argument to be made of the gains (over and above the $250,000 exemption) to be taxed in my new state, not CA.  Can you comment on that?

Example needed for splitting capital gain/loss by state.

Sorry, the gain from the sale of the house is CA source income because it is located in CA and taxable by CA.  Residency is irrelevant in this case (it would be taxable by CA even if you were never a CA resident).

Example needed for splitting capital gain/loss by state.

And that makes perfect sense!  Would've been nice though 🙂
Thanks A LOT for your expertise, truly appreciated!!
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