Please clarify George:  Does taxpayer qualify for Home Sale Exclusion?  I THINK yes

Looks like it.  Owned the house for 40 months and lived in it for 26 of those.

See page 10 https://www.ftb.ca.gov/forms/2017/17_1001.pdf
CA conforms to federal, so given your facts - YES

George4Tacks: Thank you for your answer. It makes a lot of sense what you said. Yes, I have read Page 10 of CA Pub 1001 and I have also done 540NR in the past.  This was client self-prepared Turbo Tax Returns. I hope she can get me the .tax file so I can upload to Proseries. I would rather not have to charge her for my time to recreate the 2017 Fed Return.  

Funny story: TP temporarily moved out of country with 2 kids within a year after selling CA home . FTB's notices went to her NC home and when she first got the notices that her fren opened her mail to sent to her, she thought it was a scam because the sender of letter from FTB had a Nigerian name! TP disregarded the FTB notices and until the notice became collection and she realized it is serious. Then she remembered to call me to help her.

Funny!   at least they were being cautious!

Funny!   at least they were being cautious!

Good discussion.

I have a similar experience and intend to file the CA 540NR. My problem is that I owned the home for 35 years with massive appreciation in value (~$4.5m over the original purchase cost). The Sale price and CA withholding doc shows the correct sale price just under $5m. My records as to improvements and thus the cost basis are very weak, partially due to a divorce 10+ years back where my Ex cleared out with some files. I'm wondering about my audit exposure and have some information that indicates that the FTB is very aggressive. What am I in for?? 

My problem is that I owned the home for 35 years with massive appreciation in value (~$4.5m over the original purchase cost).

Why would that be a problem?  You've enjoyed the Cali-sunshine for 35 years and the gravy train of appreciation.  If you're now retired, you'd have a great financial safety net that's envied by many.  I'm sorry, but I really don't see the problem.

"I'm sorry, but I really don't see the problem."

Paying taxes on an ungodly gain just seems so sad...

@mlk7205 

This is not a "good discussion" but a Discussion among users of ProSeries software for help preparing their clients' tax returns.

Are you using this program? If not...

You seem to be lost on the internet.

You’ve come to a Peer User community for Intuit Income Tax Preparation products supporting tax preparation professionals using ProSeries, Proconnect and Lacerte Tax Preparation programs, and you may be looking for support as an individual taxpayer using TurboTax. Please visit the TurboTax Help site for support.

Your sign in user info here is the same one you can use over at the TurboTax forum.

Thanks.

 

Paying taxes isn't a problem. From above:

"I'm wondering about my audit exposure and have some information that indicates that the FTB is very aggressive. What am I in for??"

@mlk7205 

Let me try this, again. If you are using ProSeries for preparing your clients' income taxes, this is the internet community for you and your peer users, because what is discussed is not Paying Taxes or Audit. It's how to Use The Program(s) to do what is needed for the Client's tax return. This specific topic relates to a Non-resident CA real estate sale.

If you simply want to discuss taxes, audit risk, how does my personal scenario apply to X, Y and Z, that is why Intuit has a similar community at the Turbo Tax forums. They have subforums for various categories.

This Community has none of these subforums; not to discuss Audit nor to discuss your Risk, and not to work on anyone's personal issues. I politely redirect you to the TurboTax forum, for that reason.

It's as if you walked into a Cowboy Bar and insist someone help you with your Ballet lessons. Not the Right Place.

As I also noted, you made a username here, that will also work for the TurboTax discussion community. Just go to that link I provided earlier, and log in.

Try this portal to the same forums, as a different view:

https://ttlc.intuit.com/community/discussions/discussion/03/302