California does the 'tax computation' on ALL the income (as adjusted for an CA tax law differences).

That tax amount is then multiplied by the ratio of CA source income divided by the total income.

Depending on the other state and the reciprocity agreement between the two states, there should be an OSTC in play based on the double-taxed income.

Also, capital gains don't get any special treatment by CA; all taxed at the going ordinary income tax bracket.