Question
Deferred gain from 1031 showing in California capital gain - help!
Hello friends,
Individual return, HI resident. Taxpayer completed a 1031 - exchanged a real property in California for a real property in HI. There was a realized gain of $1.3mm and a recognized gain of $220k. The deferred gain is showing in the the CA Amounts (Part II, Column E, Line 7) of the Schedule CA-NR. The result of this is that the taxpayer's California tax is greatly overstated. He should be taxed on the $220k recognized gain but he's paying on the realized gain.
The CA-NR instructions say, "Complete Schedule D (540NR) Worksheet for Nonresidents and Part-Year Residents, to compute this amount." but Lacerte is not generating the worksheet.
Can someone tell me what I'm missing here? Any input is greatly appreciated.
