The incorrect statement regarding the capital gain income of Ken is <u>D. California taxes the installment proceeds received by a nonresident to the extent the income from the sale was from a California source.</u>
<h3>What is capital gain income?</h3>
Ken's capital gain income is the increase in his California rental property's value. Capital gain is realized when Ken sells the property.
<h3>Two types of capital gain income:</h3>
- Short-term (one year or less)
- Long-term (more than one year).
<h3>Sources of Capital Gain Income or Loss:</h3>
As profits from the <u>sale of a capital asset</u>, such as Ken's California rental property, shares of stock, a business, a parcel of land, or a work of art, capital gains are taxable. The opposite of a capital gain is called a capital loss. A capital loss arises when an asset is <u>sold at price less than its basis value.</u>
<h3>Answer Options:</h3>
<em>A. The capital gain income is taxable by California in both 2019 and 2020 because the property was located in California.</em>
<em>B. The capital gain income is taxable by California only in 2020 because the property was located in California. </em>
<em>C. The interest income is not taxable by California and has a source in Ken's state of residence.</em>
<em>D. California taxes the installment proceeds received by a nonresident to the extent the income from the sale was from a California source</em>
Thus, the incorrect statement about the capital gain income is <u>Option D.</u>
Learn more about capital gains income and tax here: brainly.com/question/1259480
