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Old 01-02-2010, 11:21 AM
 
71,741 posts, read 71,853,273 times
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usually the trigger is your working in one state and claiming deductions in another.. we both work and live in new york city but have a home in PA.....

you can be sure there is a good chance i would be flagged trying to take pa as my full time state especially my wife showing she comutes 2 hours each way for a job that pays so little... could someone do it? sure but its a flag.
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Old 01-02-2010, 01:14 PM
 
Location: We_tside PNW (Columbia Gorge) / CO / SA TX / Thailand
22,638 posts, read 40,010,157 times
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Originally Posted by janetvj View Post
A lot of states are cracking down on compliance by using data warehousing software that allows them to analyze and extract information about taxpayers based on specific criteria. You'd be surprised at how much information is out there and available publicy. ...
Yes, you may have to return to using 100% cash when in 'non-desired' state.

one swipe of the card for; Cash, parking, tolls, ... can leave a trail (as well as cell phone activity) ... I feel it would be safe to meet the minimum requirements of your 'filing' state, AND avoid meeting the minimum requirements of you secondary state (meaning you can NOT use your card for 546 days in CA! employment related...)
International Tax Blog: U.S. “State” Tax Residency (Domicile)

CA has very strict residency rules (what with prop 13 AND NV as a neighbor; - thus they even consider the value of structure in each state...mansion in CA vs. condo in NV = CA as assumed state of residence). Most of my CA managers in tax free WA kept their properties in CA to retain prop 13 benefits. Now they are swapping their bay area stuff for Palm Desert and San Diego 'distress' sales and making great positive cash flowing returns on these as rentals, with high probability of future capital gain. (all earnings are taxable in CA of course, but only on NET) Or you can convert income prop to personal for 5 yrs (instead of the normal 2yrs) and take the $250k / $500k primary residence gain - TAX FREE. (hint: don't depreciate rental property if you plan to do this!)

Here is a good summary for CA - and a good point 'Voter registration', do get that correct!!
Avoiding California Residency - The Busch Firm (http://buschfirm.com/articles/tpcArt_avoiding_ca.html - broken link)

http://www.ftb.ca.gov/aboutFTB/manua.../rstm/2000.pdf
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Old 01-02-2010, 01:57 PM
 
8,204 posts, read 11,925,738 times
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Originally Posted by StealthRabbit View Post
(hint: don't depreciate rental property if you plan to do this!)
I don't claim to be a tax expert, but I'm pretty sure that upon sale, the IRS requires you to recapture not only the depreciation that was claimed, but the depreciation that could have been claimed whether it was or wasn't.
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Old 01-02-2010, 02:15 PM
 
71,741 posts, read 71,853,273 times
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yep thats correct, whether you take it or not you will pay it back as unfair as it sounds.
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Old 01-04-2010, 01:04 AM
 
26,591 posts, read 52,344,141 times
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Originally Posted by evilnewbie View Post
I was thinking about that... but who is going to "check" if you actually lived in NV more than half a year? That is, can you live in CA without worrying about it? There is no stopping you from owning a NV license, have NV banks, NV voter registration, etc... the only problem may be in NV license plates in CA for extended time (but I have seen people with out of state license in other states without problem - such as college students)... albeit the car insurance company might not be happy about it... I wonder if anyone tried this without going back and forth...
Ask wealthy people that have fled New York...

The very wealthy have to document each and every day so as to no owe or minimize New York City Taxes... the amounts are staggering.

There was a story the Limbaugh is audited every year and he keeps video records showing his daily whereabouts...

CA tried to get Nevada to assist in collecting taxes on CA retirees now living in NV... NV said no way
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Old 01-04-2010, 01:08 AM
 
26,591 posts, read 52,344,141 times
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Originally Posted by mathjak107 View Post
yep thats correct, whether you take it or not you will pay it back as unfair as it sounds.
Yep... my understanding is the loophole is closed...

Also, there is recapture when converting a rental to personal residence... even if waiting a certain length of time...

Check with your Tax Professional
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