(The year 1978 marked the passage of famed Proposition 13, which capped property tax increases but did not limit sales tax or income tax rate increases.) California will likely apply the gift and estate tax to nonresidents with California-located assets in a manner similar to how it applies income tax to nonresidents with California-sourced income. To determine your California income tax liability, you do not simply look up the tax imposed on $100,000. Doing it that way puts you in a higher California income tax bracket. And, at first blush, you would say that your $3.5 million located in California is under the $3.5 million exclusion -- thus, no tax.

Source: Forbes May 08, 2019 16:18 UTC