I am anticipated a few very large short term capital gains for selling investments in the stock market. If I change residences during the year, will I avoid paying California capital gains taxes?

ANSWER

The BIDaWIZ Team's Answer:

You're going to want to make sure that you are no longer a resident of California when you sell those investments. California state tax code Section 17301.3.(b) indicates that you are not subject to California capital gains taxes when you are no longer a resident. In addition, since these are investments held in the market, the source would not necessarily be California as is the case with real estate. This guidance would suggest that you should move out of state before recognizing any gain to avoid California capital gains tax.