When would a taxpayer include California Schedule D in their tax return and does CA have special rules for Long Term Capital Gains? A) Any time a taxpayer has capital gains or losses on California return. No, it does not. B) When a California resident sells his or her main home. No, it does not. C) Only if there is a difference between the federal and California capital gains or losses. No, it does not. D) If there is a mortgage forgiveness debt relief on the federal return. No, it does not