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B
Banjer
April 5, 2025
Question

How does casualty loss impact basis of house for California taxes?

  • April 5, 2025
  • 1 reply
  • 0 views

Taxpayer has a casualty loss that will lower taxes in California for 2024 (but not on the Federal return since it is not related to a declared disaster).

 

Taxpayer also plans to sell the house in 2025.  I am thinking forward to the capital gains taxes that will be owed upon sale of the house.

 

My question: How does the casualty loss in 2024 impact the cost basis of the house? Will the California and Federal cost bases differ if the casualty loss is taken in California?

1 reply

M
MonikaK1
April 8, 2025

Yes, the California basis will be different from the Federal basis if there were adjustments to basis for California that are different from the Federal adjustments.

 

From the California FTB:

 

If your gain exceeds your exclusion amount, you have taxable income. File the following forms with your return:

Visit Instructions for California Schedule D (540) for more information.

 

 

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