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Case study 1: US citizen lives overseas permanently; has no real estate in US; has no income in any state. Can that person declare residency in none of the states thus pay no state tax?
Case study 2: US citizen lives overseas permanently; has real estate in 2 or more states, can that person declare residency in any of those states and pay the declared state's state tax? And can a state declare that person a resident by reason of real estate ownership?
Depending on which state you most recently lived in before your move, you may need to file a non-resident state income tax return even if you are living abroad. ...
Most states, but not all, also allow the foreign earned income exclusion in determining taxable income. https://www.usexpattaxhelp.com › Expat-State-Tax-Return
Most American Expats Do Not Owe US Taxes
The US has put several important deductions, exclusions, and credits in place to ensure you aren't taxed twice
on the same income. Most expats are able to offset all of their foreign earned income with the following:
Foreign Tax Credit. Foreign Earned Income Exclusion. https://www.greenbacktaxservices.com › blog › 25-things-need-to-know-us-...
1) Of COURSE it's possible to be a US citizen, living in another country, earning a living there, having no assets in the US. Obviously someone in that situation owns no US taxes. Why would they?
2) While I know people play all kinds of games about official residency, for most people residency is where they live. If you do not live in a piece of property, it is not your residence. No state is going to try to "declare you a resident" solely on the grounds that you own property in that state. Think about it. There are thousands of people who own property in states of which they aren't residents. Of course if you own property in a US state, you'll pay property tax on that property in accordance with the tax laws of that state and municipalities.
If a US state attempted to make someone a legal resident (for purposes of collecting state income tax?) that didn't live there, it would be fairly straightforward to demonstrate that they didn't live there. Unless they actually did, and were trying to play games to avoid tax, in which case they should pay the tax they owe.
Depending on which state you most recently lived in before your move, you may need to file a non-resident state income tax return even if you are living abroad. ...
Most states, but not all, also allow the foreign earned income exclusion in determining taxable income. https://www.usexpattaxhelp.com › Expat-State-Tax-Return
Most American Expats Do Not Owe US Taxes
The US has put several important deductions, exclusions, and credits in place to ensure you aren't taxed twice
on the same income. Most expats are able to offset all of their foreign earned income with the following:
Foreign Tax Credit. Foreign Earned Income Exclusion. https://www.greenbacktaxservices.com › blog › 25-things-need-to-know-us-...
I eventually need to sell a foreign property with a lot of gains (900K as of today); so the usual foreign tax exclusions and credits won't cover. The last time I asked a tax accountant to estimate, he said even under long term cap gain I am looking at 23% tax on the profit (federal and CA). I hope by planning this right, I can save on the state part if not the federal part as well.
I am willing to go to the length of buying a little something (homes in many areas are in the 100K range) in a state with favorite state tax, and go there to visit for the required time each year, to establish residency there for facilitate the eventual sale.
Last edited by RobertFisher; 11-01-2019 at 06:49 AM..
1) Everyone should have to work and pay taxes (even if it’s only 1% of gross income)
2) Nobody should be allowed to be homeless
3) No illegal labor should be allowed to be paid under the table
There are residency requirements for states. The bigger issue is your former state pursuing you. CA and NY are especially known for this. You need to actually move.
Also if your profit is off of a CA property you'd probably owe tax there regardless of where you live, but I'm not certain with that. For such a large amount, pay a tax attorney an hour consult to ask them how to structure the deal.
You may be better off living in the house for two years to get the federal exemption.
World wide income has to be declared but no double taxation takes place.
Not the focus of my situation, but "No double taxation" only goes as far as the Foreign Earned Income Exclusion, which for tax year 2018 is $103,900, right? Beyond that, double taxation kicks in.
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