Told my bud that I got zinged on stock sales as I didn't pay long term cap gains tax (company was taken over and we were cashed out - didn't know at the time) so I'm not having to tak the hit on Fed AND state (CA) returns. He says I should ONLY be paying the Fed, not CA. I say I need to pay BOTH. Who's right?
2007-03-16 18:37:12 · 4 answers · asked by B 1 in Business & Finance ➔ Taxes ➔ United States
Well your friend is sort of right! California does not have long or short term capital gain tax rates. You will include any gain in your ordinary income and pay the same rate as other income such as wages. But you are right that you pay "taxes" on the gain to both the state and feds.
2007-03-17 11:54:42 · answer #1 · answered by ? 6 · 0⤊ 0⤋
You definitely get zapped by the Feds. Most states with income taxes also assess tases on capital gains and CA is one that does -- or at least they did when I lived there 25-odd years ago. The CA rate will probably be lower than the Fed rate but they will take their bite.
2007-03-16 23:33:37 · answer #2 · answered by Bostonian In MO 7 · 0⤊ 0⤋
You are - you need to pay both.
It's the federal that's the 5% or 15% rate.
2007-03-16 18:40:04 · answer #3 · answered by Judy 7 · 0⤊ 0⤋
Yes, you have to pay both.
2007-03-16 18:51:20 · answer #4 · answered by Rockies VM 6 · 0⤊ 0⤋