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Posted by Katie on April 29, 2008, 2:32 pm
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>
> Since he dosen't owe any CA taxes (I checked by filling out his CA tax
> return). So would it be simpler just filling out his CA return, so
> there won't be any question if California comes calling because his
> 1099 from his bank acct and investment acct all list a CA address?
>
As others have noted, California does not conform to the IRC Sec. 911
exclusion, so I doubt that he would owe no California tax if he were a
resident. However, it appears that he will meet the CRTC Sec.
17014(d) safe harbor. Therefore, he is a nonresident of California
regardless of where his domicile may be. He has no filing requirement
since he is a nonresident and has no California source income.
(Income from intangibles, such as bank and brokerage accounts, has its
source at the residence of the owner, not the location of the payer.)
Filing a California return would start the running of the statute of
limitations and forestall correspondence from the FTB generated by the
1099s from the bank and brokerage accounts. Note that in order to do
that you must disclose ALL of his 2007 income, from all sources, and
that there is no Sec. 911 exclusion. However, since his California
source income (Schedule CA-540NR, Col. (e) is zero, his tax liability
is zero.
Katie in San Diego
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