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Author: StockSleuth Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121095  
Subject: Re: State Taxes:Living in CA&TX, CG in joint acc Date: 6/1/2000 1:24 PM
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<<I live in CA and my wife lives in TX. We file tax returns (federal, CA and TX) with married file jointly status. We share a joint brokerage account with my wife as the primary account holder. The account has a TX mailing address.

I have income from CA and my wife has income from TX. We also have capital gains in the joint account.

My first question is how the capital gain in the joint account is taxed in terms of state taxes. Is it taxed according to CA tax rate or TX rate (TX has no state tax) or how the state taxes are splitted between the two states?

I have got ISO from my employer which is in CA. My second question is: Can I transfer the stocks exercised from the ISO to the above joint account in case we are able to pay less state taxes this way (after we sell the stock)?

Bigwolf>>

Bigwolf,

Check out these two resources. Speidell publishes a pretty decent report, "California Taxation of Non- Residents..." covering this issue. I think it is $35.00, but could be worth it to you for planning the best way to handle your situation. Look for the report under "Special Reports" (lower left hand corner) on their website home page. The report has lots of examples similar to yours (spouses living in different states)and community property issues and stock options.

http://www.caltax.com/


Also try the State of California Franchise Tax Board's website. It has a publication on this issue as well. You will need Adobe Acrobat to read the publication on-line.

http://www.ftb.ca.gov/forms/99_forms/99_1031.pdf

Good Luck

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