The California Capital Gains Law

California tax law is generally the same as federal law, including the requirements for capital gains. When filling out California income tax forms, you start with the adjusted gross income shown on your federal tax form and figure the California tax from that.

Terms

Short-term capital gains are proceeds from the sale of assets you have held for one year or less. If you have had the assets for more than one year, the proceeds are long-term capital gains.

Tax Brackets

Short-term capital gains are taxed as ordinary income, regardless of your tax bracket, in California. If you are in the 10 percent or 15 percent tax bracket, individual capital gains tax will be zero until the end of 2010, when it will increase to at least 15 percent. If you are in the 25, 28, 33, or 35 percent tax bracket, tax on long-term capital gains is 15 percent.

Categories

Capital gains are profits on investments, including collectibles. Real estate that isn't your primary residence is included, but if you sell your primary residence, you may be able to deduct some of the gain. Check with your tax adviser in California or the IRS for the latest rules.

References

• State of California Franchise Tax Board