# Topic 8: California State Tax / California Tax, Part I Quiz

California property exchanged for out-of-state property in a Like Kind Exchange is handled in the following way: If an individual is a nonresident and exchange real or tangible property located within California for real or tangible property located outside California, the realized gain or loss will be sourced to California. Taxation will not occur until the gain or loss is recognized. This requires the individual to keep track of their deferred California sourced gains and losses to report them to California in the year they sell or otherwise dispose of the property received in the exchange. Using this tax rule, answer the following:
As a resident of Texas, an individual exchanged a condominium located in California for like-kind property located in Texas. They realized a gain of $15,000 on the exchange that was properly deferred under IRC section 1031. They then sold the Texas property in a non-deferred transaction and recognized a gain of$20,000. What is the California gain and is tax due to California?

Select one:
a. Because Texas does not have a state income tax, the $15,000 deferred gain is not taxed by California b. The$15,000 deferred gain has a source in California and is therefore taxable in California, regardless of where the property owner now lives
c. Not enough information is given to make a determination
d. The California gain is $15,000 and is taxed by California but only if and when the property owner moves back to California Click the card to flip 👆 1 / 30 Terms in this set (30) California property exchanged for out-of-state property in a Like Kind Exchange is handled in the following way: If an individual is a nonresident and exchange real or tangible property located within California for real or tangible property located outside California, the realized gain or loss will be sourced to California. Taxation will not occur until the gain or loss is recognized. This requires the individual to keep track of their deferred California sourced gains and losses to report them to California in the year they sell or otherwise dispose of the property received in the exchange. Using this tax rule, answer the following: As a resident of Texas, an individual exchanged a condominium located in California for like-kind property located in Texas. They realized a gain of$15,000 on the exchange that was properly deferred under IRC section 1031. They then sold the Texas property in a non-deferred transaction and recognized a gain of $20,000. What is the California gain and is tax due to California? Select one: a. Because Texas does not have a state income tax, the$15,000 deferred gain is not taxed by California
b. The $15,000 deferred gain has a source in California and is therefore taxable in California, regardless of where the property owner now lives c. Not enough information is given to make a determination d. The California gain is$15,000 and is taxed by California but only if and when the property owner moves back to California
Which of the following conditions must be met in order to not need to qualify to use the Head of Household filing status for 2020 for purposes of the Senior Head of Household Credit?
Select one:
a. The taxpayer was 65 years of age or older on December 31, 2020
b. Qualified as a head of household in 2018 or 2019 by providing a household for a qualifying individual who died during 2018 or 2019
c. Did not have adjusted gross income over $78,441 for 2020 d. All of the above are necessary to claim the credit without need to qualify Which of the following are key differences between the California Earned Income Tax Credit (EITC) and the federal version of the credit for the 2020 tax year? Select one: a. If the taxpayer was a nonresident, they must have earned income from working in California b. Both the taxpayer's earned income and federal adjusted gross income (AGI) must be less than$56,844 to qualify for the federal credit, and less than $30,000 to qualify for the California credit. c. California does not allow the credit for self-employment income. d. A and B are correct For the 2020 tax year, which of the following taxpayers is required to file a California State Income Tax Return? Select one: a. A 26 year old single filer with no dependents with a California gross income of$11,065
b. A 66 year old single filer with one dependent with a California gross income of $45,500 c. A 45 year old Married Filing Joint/RDP taxpayer with two dependents, a 41 year old spouse and a California gross income of$32,036
d. A 59 year old Qualifying Widow with one dependent and a California gross income of \$25,200.