If your California capital gains or losses are different from your federal return, you may need to complete the California Schedule D Capital Gain or Loss Adjustment section. California uses this information to calculate the correct capital gain or loss amount for your state return.
What Is California Schedule D (540)?
These differences can occur because California does not conform to all federal tax laws and may calculate gain, loss, or basis differently for certain transactions.
Program Pathway
- State
- Edit California return (Click 3 dots)
- Miscellaneous Forms
- California Schedule D Capital Gain or Loss Adjustment
Entering California Schedule D Information
Net Loss from CA Schedule K-1 (enter as a positive figure)
Enter the combined net capital loss from all California Schedule K-1 forms (100S, 541, 565, and 568). California Schedule D instructions state that net gains and losses from California Schedule K-1s should be combined when calculating your California capital gain or loss adjustment.
Net Gain from CA Schedule K-1
Enter the combined net capital gain from all California Schedule K-1 forms (100S, 541, 565, and 568). Gains reported on your California Schedule K-1 should be included when figuring your California capital gain or loss.
CA Capital Loss Carryover
Enter your California capital loss carryover from the prior tax year. If you were a California resident for all prior years, use your California capital loss carryover amount from last year's California return. Special calculation rules may apply if part of the loss was generated while you were a nonresident.
What If These Fields Don't Apply to Me?
If you do not have California Schedule K-1 capital gains or losses and do not have a California capital loss carryover, leave these fields blank. Only enter amounts that apply to your situation and are supported by your California tax records.
Additional Information
California Schedule D (540) should only be completed when a California-specific adjustment is required. If all of your California gains and losses are the same as your federal gains and losses, Schedule D (540) generally is not required.
For further reference please review the California Schedule D (540) instructions here.