My client inherited a small piece of land in California with her sister and sold it for a $5,000 total gain ($2,500 each sister) in a 10 year installment sale.  The gain recognized each year will be around $150, so under $10 CA tax annually.  It looks like technically they would be required to file when looking at the very low total income threshold for nonresidents.  Her sister (not my client) decided not to file.  My client is debating whether to file for such a small amount.  My concern is the possibility of an audit for my client and penalties for not filing in CA.  Is this warranted or am I just being overly concerned?