In a short sale of principle residence with a non-recourse loan, what is the tax impact of a 1099-A in the state of California?

That depends on whether the short sale covers the cost of any underlying mortgage on the property.

If it does NOT, the mortgage company may either:

1) pursue collect from you the difference between what was owed and the proceeds from the sale through a collection agency and perhaps eventually via the courts.

2) write off the difference. If they choose to write it off, they may then originate a Form 1099-C and show the writeoff as implied income to you.

If you receive a Form 1099-C, you can file Form 982 under the Mortgage Forgiveness Debt Relief Act of 2007 to be relieved of any subsequent income tax on that Form 1099-C income, provided you meet the filing criteria.