CA rental, client wants to do a 1031 exchange for a rental in another state....CA is still going to want tax on that sale?

[Just-Lisa-Now-]

I hadn't ever really thought about it before but CA isn't going to consider this an exchange since the property in another state, right?  

[George4Tacks · Accepted solution]

CA still wants to track the exchange, even though the replacement is out state. If a complete 1031, then no tax due to CA in the year of sale. Annually TP needs to file 3840. If the out of state property sells at a gain, then CA wants their piece of the pie at that time. https://www.ftb.ca.gov/file/personal/reporting-like-kind-exchanges.html

[Just-Lisa-Now-]

Thank you!

[George4Tacks]

You are welcome. It is payback for all the smoke your neighbors sent us this last week. I hope all is well up there.

[Just-Lisa-Now-]

Yea, my office was under mandatory evacuation, home was ok though, we didn't even lose power, but the whole county was crazy!

[George4Tacks]

:+1:

[abctax55]

Wow...I forgot you were in that area.  I've been too worried about my friend in Boyes Hot Springs; her power was turned off & she just brought her husband home after cancer surgery.
Glad you are OK Lisa.  This is turning into a regular routine.

[Just-Lisa-Now-]

October is a terrible month for high winds and fire danger here these past few years (our last big earthquake in '89 was in mid October too!). PG&E planned the outages for a couple days due to the high wind last weekend, but then the fire and the evacuations happened...Some people went 6 days with no power and/or not allowed in their home!  That's a long time when its landing in the high 30's in the morning.

Im still working on payroll and sales tax reports for clients that I got the paperwork for last week, (I figured I could get them all done Monday morning...nope!) and the final one arrived yesterday when he finally was able to get back into his shop....I spoke with the state on Tuesday, they told me not to worry, we can get relief from the penalties and interest due to the power outage....I'm thinking next year I make Oct 10th my deadline for paperwork, just in case it happens again!

So if anyone is planning a vacation in the wine country in Northern CA, don't schedule it for October!