Deducting foreign property taxes on Schedule CA - Spidell

Deducting foreign property taxes on Schedule CA

We received a question from a subscriber about including foreign property taxes as an itemized deduction on Schedule CA for purposes of computing California’s itemized deductions. The TCJA suspended the deduction for foreign property taxes. (IRC §164(b)(6)(a)) California has not conformed to this change.

The most likely place to take this deduction is on Schedule CA, Part II, line 6, Column C. Unfortunately, the current version of Schedule CA doesn’t allow for an entry to be made in Column C because that field is blacked out.

However, the FTB has stated that they will be revising the Form 540/540NR Schedule CA to remove the shading and allow for an entry on line 6, Column C.