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Posted by Ron on April 9, 2007, 3:29 am
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I have a portfolio of stocks purchased over several years
while residing in CA. I plan on moving to Nevada later this
year and would like to sell some stocks once I move. Will I
still have to report this income to the state of CA and be
liable for CA state taxes. Nevada has no personal income tax
and CA runs nearly 10%.
If I change my mind about living in Nevada and return in
2008 would there be any liability for 2007 State income
taxes.
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Posted by Phil Marti on April 10, 2007, 10:25 am
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> I have a portfolio of stocks purchased over several years
> while residing in CA. I plan on moving to Nevada later this
> year and would like to sell some stocks once I move. Will I
> still have to report this income to the state of CA and be
> liable for CA state taxes.
No.
--
Phil Marti
Clarksburg, MD
<< ======================================================= >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ======================================================= >>
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Posted by Katie on April 12, 2007, 12:44 am
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> I have a portfolio of stocks purchased over several years
> while residing in CA. I plan on moving to Nevada later this
> year and would like to sell some stocks once I move. Will I
> still have to report this income to the state of CA and be
> liable for CA state taxes. Nevada has no personal income tax
> and CA runs nearly 10%.
>
> If I change my mind about living in Nevada and return in
> 2008 would there be any liability for 2007 State income
> taxes.
If you really move to Nevada, and sell the stocks after you
have become a nonresident of California, California will not
tax the gain.
You will have a filing requirement for 2007 as a part-year
resident of California. Any income you receive before you
move to Nevada will be subject to California tax.
However, if you return to California within a short time,
there may very well be an issue as to whether you actually
moved to Nevada with the intent of remaining there. A
person who is domiciled in California remains a resident
while absent for a temporary or transitory purpose. It does
not matter how long the absence is; it can be a year, two
years, or more. The point is the purpose of the absence.
In order to make an effective move to Nevada, you must sever
your ties to California (sell or lease your home, move your
household goods, etc.,), move to and reside in a new
location (buy or lease a place of abode, register to vote,
get a driver's license, register your vehicles, etc.), and
intend to remain in the new location permanent or
indefinitely. If you do not meet all three of those
requirements, your domicile and probably your tax residence
will remain in California during your absence. In that
case, your gains would be taxable.
Katie in San Diego
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>
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Posted by Mark Bole on April 12, 2007, 12:44 am
Please log in for more thread options Ron wrote:
> I have a portfolio of stocks purchased over several years
> while residing in CA. I plan on moving to Nevada later this
> year and would like to sell some stocks once I move. Will I
> still have to report this income to the state of CA and be
> liable for CA state taxes. Nevada has no personal income tax
> and CA runs nearly 10%.
>
> If I change my mind about living in Nevada and return in
> 2008 would there be any liability for 2007 State income
> taxes.
California's maximum rate is normally 9%, but there is no
favorable capital gains rate. Do you expect to be at the
maximum rate? How do you know you will be able to sell the
stocks at a gain?
You domicile for state tax purposes will be determined by
facts and circumstances, not the least of which is the
strength of your ties to your new home in Nevada and the
cleanliness with which you have severed all ties to CA. If
you are simply moving to NV to avoid CA taxes for a year and
then thinking of moving back, as you already state, it
probably won't pass muster.
Plus, you'll have to file a part-year resident return for
both the year you leave and the year you come back, and both
returns will need to identify NV as the state you moved
to/from.
-Mark Bole
<< ------------------------------------------------------- >>
<< The foregoing was not intended or written to be used, >>
<< nor can it used, for the purpose of avoiding penalties >>
<< that may be imposed upon the taxpayer. >>
<< >>
<< The Charter and the Guidelines for submitting posts >>
<< to this newsgroup as well as our anti-spamming policy >>
<< are at www.asktax.org. >>
<< Copyright (2006) - All rights reserved. >>
<< ------------------------------------------------------- >>
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