Question

Your supervisor has asked you to research the following situation concerning Scott and Heather Moore. Scott and Heather are married and file a joint tax return. They used to live in Newport Beach, California but moved to Las Vegas, Nevada on December 31, 2017 because there was no state tax. Scott and Heather decided to rent out their old home in Newport Beach, California during 2018 which netted them $12,000 of rental income after taking the depreciation and other rental expenses. Besides the rental property, they each earned over $100,000 in W-2 wages from their jobs as lawyers. They both spent no time in California during 2018 because they hired a property manager for their rental property. They have also changed their driver's licenses and car registrations to Nevada. Since they live in Nevada, which has no state tax, they believe that they are only required to file a federal tax return for 2018 since they have relinquished all their ties to California.

Hi, Please help me answer these following questions :

If Scott and Heather are required to file a California tax return?

Should they be considered California residents, nonresidents, or part-year residents?

What form will they use to file their California tax return, if any?

Thank You!

Answer 1