Tax rate for ex-Californians

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Here's another article that lightly addresses the "non-resident" aspect:

https://www.accruit.com/1031-news/california-drafts-like-kind-exchange-ftb-3840

 

[nwsteve]

While a total excess use of state power, as long as you hold physical assets in CA, CA can claim nexus--the right to tax those assets. A pretty well acceptable principle in taxation.
Your intangible assets--stocks and bonds--are just that intangible and have no "physical" presence so no nexus.
Nwsteve

 

[pb4uski]

Oh yes, I read that three times over. But it doesn't differentiate residence in CA. What's next, I move out of CA and I still need to file when I sell my stocks & funds so I can pay cap gains tax to CA? I'd like to see a challenge to the 3840 by a non-CA resident. If I'm out of CA jurisdiction in all ways, the state should have no right to know what I do and I should have no responsibility to file anything.

I think you're being unreasonable. From what I read it seems that the 3840 was put in place to prevent people with Ca property from avoiding Ca tax on the appreciation simply by doing a 1035 exchange to another state and then selling.

They just want the tax on the appreciation during the period that you owned the property as if you sold it rather than did a 1035. I suspect that if you went to them and said I'm doing a 1035 exchange to another state but will pay the tax as if I sold at fair market value as of the date of the 1031 exchange so I don't have to file these pesky 3840 then they would be fine with taking your money and relieving you of the filing obligation.

Also, there would never be double taxation because any tax paid to Ca could be claimed as a credit by your new resident state if that state has a state income tax.

It seems to be greedy to indignantly think you should never have to pay tax on the gain.

I guess that this does however, point out an advantage of being a bond/stock investor over a real estate investor in that if you were a bond/stock investor and had an investment with a significant appreciation and moved from Ca then if would never be subject to tax.

 

[nwsteve]

Here's another article that lightly addresses the "non-resident" aspect:

https://www.accruit.com/1031-news/california-drafts-like-kind-exchange-ftb-3840

Given this thread has been focused on the former CA taxpayer, the above referenced article makes the point that former residences of Oregon Montana Massachusetts are also exposed to claw-back provisions on 1031 exchanges.
So apparently a bunch of other folks "share the pain" of trying to escape the tax demands of their former home state.