CA Home Sale Exclusion for a non-resident at the time of sale

TP is single with 2 kids. She sold a home in CA  ( 2016) while being domiciled in North Carolina. She qualified for Fed Home Sale Exclusion $250K but CA is after her for 540NR Form and for $25K prob for Cap Gain on the sale.  Does she have to pay CA Tax for the home sale?

01/11/2013 Home Purchased in CA

04/01/2015 Put Home into Rental, TP moved to NC (lived in home 26 months)

04/30/2016 Took Back home to get ready to sell (did not live in home)

05/25/2016 Sold Home (owned home 40 months)

She qualified for the Fed Home Sale Exclusion $250K and had to pay tax on less than $10K extra Cap Gain in Fed. 

There was no CA FTB withholding in HUD-1 shown, which I thought was odd.


(1) If she were to be a resident of CA, she would have qualified for CA Home Sale Exclusion other than over $250K gain due to CA conformity?

(2) Since she is a resident of NC, she does not have the privilege to enjoy the CA Conformity of Home Sale Exclusion, therefore, owe tax on the home sale?

(3) If taxable in CA, she would have to pay tax on the entire Cap Gain and not only the depreciation recapture?

Thank you. Could not find a situation during research on Non-resident + Home Sale Exclusion Conformity in CA.

No answers have been posted

More Actions

People come to Accountants Community for help and answers—we want to let them know that we're here to listen and share our knowledge. We do that with the style and format of our responses. Here are five guidelines:

  1. Keep it conversational. When answering questions, write like you speak. Imagine you're explaining something to a trusted friend, using simple, everyday language. Avoid jargon and technical terms when possible. When no other word will do, explain technical terms in plain English.
  2. Be clear and state the answer right up front. Ask yourself what specific information the person really needs and then provide it. Stick to the topic and avoid unnecessary details. Break information down into a numbered or bulleted list and highlight the most important details in bold.
  3. Be concise. Aim for no more than two short sentences in a paragraph, and try to keep paragraphs to two lines. A wall of text can look intimidating and many won't read it, so break it up. It's okay to link to other resources for more details, but avoid giving answers that contain little more than a link.
  4. Be a good listener. When people post very general questions, take a second to try to understand what they're really looking for. Then, provide a response that guides them to the best possible outcome.
  5. Be encouraging and positive. Look for ways to eliminate uncertainty by anticipating people's concerns. Make it apparent that we really like helping them achieve positive outcomes.

Select a file to attach: