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Capital gains arise from the sale or exchange of capital assets and are recorded on federal Form 8 9 4 9 , categorized as short
Capital gains arise from the sale or exchange of capital assets and are recorded on federal Form categorized as shortterm or longterm based on their holding period. Occasionally in California, adjustments are required on Schedule D when there are differences between federal and state calculations. Which form should a taxpayer use to report capital gains in California when discrepancies with federal reporting exist?
a Report all capital gains and losses on federal Form using California Schedule D only when adjustments are necessary due to specific staterelated discrepancies Property inherited before
b Report capital gains only on federal Form without any statespecific adjustments.
c Use federal Form for reporting, and duplicate all information on California Schedule D regardless of discrepancies
d Report all capital gains and losses directly on California Schedule D ignoring federal classifications.
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