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Taxability of CA income (interest, dividends, capital gains) allocated to resident spouse in a non-community property State.

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last updated ‎December 06, 2019 9:40 PM

TP and spouse wish to file MFS for both federal and CA in 2018.  TP moved out of CA in January 2018 and is residing in a non-community property State.  Spouse is a CA resident the entire year in 2018.  Spouse has CA interest income, dividends and capital gains.  

Half of all spouse’s CA income will be allocated to TP.

However, TP will not pick up any of the CA income allocated to him as his residency is not CA (CA sourcing rules in interest, dividends, capital gains is based on recipient’s residency). Is this correct? 

Therefore, in his f540NR, TP will not pick up any half of the income from spouse.

Thank you for your help.
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Level 15
last updated ‎December 06, 2019 9:40 PM

FTB Pub 1031 https://www.ftb.ca.gov/forms/2016/16_1031.pdf page 12 lays it out pretty clearly as to what CA wants. 


ex-AllStar

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Level 15
last updated ‎December 06, 2019 9:40 PM

FTB Pub 1031 https://www.ftb.ca.gov/forms/2016/16_1031.pdf page 12 lays it out pretty clearly as to what CA wants. 


ex-AllStar

View solution in original post

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last updated ‎December 06, 2019 9:40 PM
@George4Tacks Thanks for your comment!
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