Whether you are in Palm Springs, West Hollywood or even San Francisco you will you will likely owe … [+] California Taxes.
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With more than 40 million people officially living in California, the great weather and beautiful beaches must be doing something right. The hurdles to be financially successful in this state are high. California has one of the highest costs of living in the US and is one of the highest income tax states. Taxation of capital gains in California is no less well taxing on investors’ budgets. The more taxes you pay, the harder it will be for you to build wealth.
California taxes all capital gains as income. In contrast, the Federal Government will differentiate between long-term capital gains and short-term capital gains for tax purposes. Capital gains tax rates range from zero percent up to 37%, depending on the type of capital gains being taxed. It has been my experience as a Los Angeles financial planner; many people ignore state capital gains taxes when doing their tax planning (that is, assuming they are doing any tax planning at all). Understanding California capital gains tax rate obligations can help you make proactive money moves to minimize your taxes owed to the Franchise Tax Board…