What is true about capital gain income from the sale of property in California?

The capital gain income from the sale of property in California is considered taxable by the state, regardless of the seller's residency. This means that even if a seller resides in another state or country, any gain made from the sale of California real estate is subject to California state taxes. This rule is particularly relevant because it allows the state to tax income derived from its properties, ensuring that individuals who profit from the state's real estate market contribute to its revenue.

This taxation approach is grounded in California tax law, which distinguishes between income generated within the state versus that earned elsewhere. It highlights the importance for anyone involved in real estate transactions in California to be aware of their tax obligations, regardless of where they live. Understanding this principle ensures that sellers accurately report and pay taxes on the capital gains generated from their real estate sales in California.