Deferred gain from 1031 showing in California capital gain - help!

[PDYT]

Hello friends,

Individual return, HI resident.  Taxpayer completed a 1031 - exchanged a real property in California for a real property in HI.  There was a realized gain of $1.3mm and a recognized gain of $220k.  The deferred gain is showing in the the CA Amounts (Part II, Column E, Line 7) of the Schedule CA-NR.  The result of this is that the taxpayer's California tax is greatly overstated.  He should be taxed on the $220k recognized gain but he's paying on the realized gain.  

The CA-NR instructions say, "Complete Schedule D (540NR) Worksheet for Nonresidents and Part-Year Residents, to compute this amount." but Lacerte is not generating the worksheet.

Can someone tell me what I'm missing here?  Any input is greatly appreciated.

[amec]

Look at the input for the CA 3840. Pretty sure you have to file it indefinitely until the full gain is recognized. There may be special input on that form to makes only the recognized gain taxable.

[PDYT]

Yes, thank you.  It appears that the issue is in the Schedule CA 540NR - it is carrying the entire gain, not just the deferred gain, to the CA source capital gain which then impacts the CA AGI.  That impacts the CA taxable income on line 35 of the 540NR. 

[dthornton]

Were you able to resolve this? We have the same issue.