Hi there,
I have a new client who came to me from a different CPA. We are in California.
In 2022, the client sold a primary residence. On the federal level there is a big capital loss carryover ($240,000) from previous years. It covers the gain. On California level, the capital carryover is only $4k. It is not enough to cover the gain and California shows tax liability.
The tax client is a very simple 1040. I will ask the client, but I am pretty sure that the California carryover was caused by a tax preparer making a data entry error.
What is my course of action here? Amend every single year of California 540 to properly carry over the loss?
Thank you in advance,