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tomkovoor · Mar 17, 2011, 10:24 AM

I had a question with regards to capital gains and losses for CA. I am using turbo tax to do my taxes and in the capital gains and losses section they ask on CA source of income for the stocks. Not sure what is meant by CA source of income. I had questions about 3 situations

1: Stocks I brought when I lived in NJ and sold off there? Do I need to report these in CA?
2: Stocks I brouhgt when in NJ and sold when in CA? How do I calculate percentage of CA income in those
3: Stocks of company that I brought when in both states and sold in CA?

Also I was a resident of NJ in 2009 and lived there for 4 months in 2010 before moving permenantely to CA. Whne I file my NJ taxes do I file as part year resident or non resident? ANy kind of help is appreciated.

Regards
Tom

ebaines · Mar 17, 2011, 10:57 AM

You file in both CA and in NJ as a part-year resident. You pay tax to NJ on the income you made for the 4 months you lived there, and you pay taxes to CA on the income you made for the 8 months you lived there. For capital gains income you apportion your gains based solely on the date you sold the stock. So if you sell stock while living in NJ you pay tax on it to NJ (not CA), and if you sell stock while living in CA you pay tax on it it to CA (not NJ - even if you bought the stock while living in NJ). However - the way the tax forms work you will actually report ALL income to BOTH states - it's just that the actual taxes you owe to each will be based only on your income while living or working in that state.

tomkovoor · Mar 17, 2011, 11:49 AM

Does the same apply for dividends as well?

ebaines · Mar 17, 2011, 12:14 PM

Originally Posted by tomkovoor

Does the same apply for dividends as well??

Yes - you allocate dividends into one bucket for dividends received while a NJ resident (which you will pay NJ income tax on) and second bucket for when you lived in CA (and which you pay CA income tax on). Same thing with other income as well such as interest and wages. TurboTax will step you through the process, as long as you tell it that you moved from NJ to CA during the year.

tomkovoor · Mar 17, 2011, 01:44 PM

Thanks for you help on answering some of my question. One last thing I was doubtful about was a question that came up in turbo tax.

When my company moved me to CA there was a little mess up on my tax deduction and for a couple months ( 1 or 2) my paycheck did not deduct CA taxes but NJ taxes while I was here in CA. This has been corrected since

When in turbo tax I put part year resident and it asked if you received NJ source of income when not residing in NJ? Does the situation mentioned above mean that I did have NJ source of income while not residing.

Regards
Tom Kovoor

ebaines · Mar 17, 2011, 01:52 PM

Originally Posted by tomkovoor

When in turbo tax I put part year resident and it asked if you recieved NJ source of income when not residing in NJ?? Does the situation mentioned above mean that I did have NJ source of income while not residing.

No. At that time you were living and working in CA, so that money is CA source, not NJ source. You should find that you get a nice refund from NJ because of this withholding being paid to NJ which was a mistake. That's the good news. The bad news is that you may owe CA taxes for the time when you had CA source wages but no CA taxes were withheld. So be prepared to write a check.

tomkovoor · Mar 17, 2011, 02:02 PM

Thanks for all your help. Much appreciated. Yes after calculating CA I do have a big one to pay off. I need to complete the NJ one now. Once again thank you

Regards
Tom Kovoor

ebaines · Mar 17, 2011, 02:42 PM

You're welcome!