California OTA Modifies Taxpayer’s Assessment for Non-Resident’s Rental Income

The California Office of Tax Appeals (OTA) modified a proposed tax assessment against a taxpayer, clarifying that net rental income is his only source of California income for the 2021 tax year. This decision results from an appeal filed by the taxpayer, a non-resident of California, who contested the Franchise Tax Board’s estimate of his income based on his mortgage interest payments. While acknowledging the taxpayer’s status as a non-resident, the Tax Board presented evidence showing that he earned rental income from a residential property in California, which he sold in 2022. The OTA concluded that, although the taxpayer had ...