A California couple sells their home and realizes a $100,000 capital gain on the sale of the home. For federal tax purposes the home sale qualifies for the capital gains exemption and they owe no federal capital gains tax on the sale. The couple is in the 9.3% California tax bracket. What will their potential California tax liability be on the sale of the home?

Select one:

a. Zero just like the federal tax treatment of the sale because it qualifies for the home sale capital gains exemption.

b. $9,300 because unlike federal tax code, the sale of a home in California is not exempt from being taxed and will be taxed as ordinary income at the couples current tax rate (9.3%).

c. $10,000 - because unlike federal tax code, the sale of a home in California is not exempt from being taxed and will be taxed at a flat rate of 10%.

d. Cannot determine from the information given because the criteria for determining whether or not the sale is exempt from California capital gains tax is different from the federal criteria and we are not given enough information.