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Old 12-25-2013, 09:11 PM   #1
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Domicile and Residency

I just found this in depth article on state tax, domicile and residency. I hope it is primarily academic, but the gist of the article is that you can not establish domicile or residency when you live in an RV. Has anyone found this to be an issue or is this a lawyers view point that would apply to really high income individuals?

Personal Income Tax Issues Related To
Residency And Domicile http://www.lanepowell.com/wp-content...205_Gadon1.pdf

As I am considering moving from California to a lower tax state, is this a real problem where CA has come after anyone?
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Old 12-25-2013, 09:26 PM   #2
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Domicile/Residency laws can be tricky and vary from state-to-state. In general tax courts have ruled that you can't simply get a driver's license and mailbox in another state and magically change residency, you must provide a clear demonstration and documentation that your actual domicile has moved. Drastic things like terminating all employment and income and selling all property in one state and buying in another will do the trick, but short of that you need to clearly document that you have cut all ties with your prior state of residence, no longer consider it home, and now have a bona fide residency in another state. Some states are more of a stickler on this than others but I wouldn't mess with California as they are one of the touchier ones. I would be certain to carefully document your 'move' if you don't want to have some unpleasant dealings with the Franchise Tax Board down the line.
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Old 12-25-2013, 10:30 PM   #3
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Agree with the above post.
You have to move physically from California, and not have any property. Be sure you consult with a tax lawyer just to be sure. On a personal note. I lived in California. When i joined the navy and was stationed in Hawaii. The state tried to have me pay state income tax for Four years Straight. I always went to H & R Block there is a regulation that California residence in the Military stationed out side of California are not required to pay state income tax while absent. I always sent this letter through H & R Block to the State and it was corrected every time. I haven't been back to California since. Best of luck.
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Old 12-25-2013, 10:44 PM   #4
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Also important to establish your voting right's in another state and if you Vote in Ca your still a Resedent. Keep records (fuel, grocery, rv parks) showing your out of state more then 6 mos.
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Old 12-26-2013, 01:52 AM   #5
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I was a CA resident for 59 years (20 while active duty in the Army). I changed my residency to So. Dakota 2 year ago using http://www.alternativeresources.net/. My vehicles are registered in SD and I am registered to Vote there. I am only required to pay state tax to CA for CA employment and investments such as rental property. I no longer own property in CA but I do visit it and winter there.
TX and SD both recognize and appreciate full time RVer's.
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Old 12-26-2013, 06:46 AM   #6
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One item on page 19 of the cited document is worth noting. In the year you change domcile states, it is important to file a partial year tax return in the state you formerly had residence in; this puts that state on notice that you are terminating your domicile there. Once they accept that tax return they have accepted the fact that you are no longer a resihedent. The article points out that if you fail to file the state's right to challenge your domicile remains open.

In the first year that we started fulltiming I maintained careful fueling and campground records that proved we had spent less than two weeks in our former state. We had no problem having our SD address accepted as our domicile. All our legal affairs, voting,healthcare, pensions, etc, now use that address.
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Old 12-26-2013, 07:57 AM   #7
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Quote:
Originally Posted by docj View Post
One item on page 19 of the cited document is worth noting. In the year you change domcile states, it is important to file a partial year tax return in the state you formerly had residence in; this puts that state on notice that you are terminating your domicile there. Once they accept that tax return they have accepted the fact that you are no longer a resihedent. The article points out that if you fail to file the state's right to challenge your domicile remains open.
That sounds like a good tip but I seriously doubt that merely filing a partial year tax return proves anything or has any effect on a state's ability to challenge your domicile. The Federal and state governments accept and process tax returns in a perfunctory manner and their merely doing so proves nothing. They will still have the right to challenge anything about the return up until the statute of limitations. By all means file the return, but keep good independent records and don't depend on the filing in itself to provide some kind of absolute defense if you should be questioned.
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