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Merlo
Merlo, Accountant
Category: Tax
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Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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we live in california. we just paid the state $141,000 in income

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we live in california. we just paid the state $141,000 in income tax. I want to retire and move to nevada while my business continues to operate in ca. It is a "s" corp so my wife and I report its profit on our tax return. I want to keep my residence in ca as a secondary residence and establish a primary residence in nev. How do I do this so I am in compliance with the law?
Submitted: 7 years ago.
Category: Tax
Expert:  Merlo replied 7 years ago.
Hello rricca,

No, the time that you live in a state to establish residency does not have to be continuous.

There is no exact formula or checklist that is used in order to establish domicile in a certain state.    Domicile is actually based more on your “intent” of where you intend for your home to be.

However, if a situation were to arise where you were questioned about your residency, the state would look at a number of factors. The biggest factor is physical presence in the state. In other words, do you own or rent or otherwise maintain a regular place of residence in the state. Even though you may have a residence in another state, your domicile state should be your main place of residence, where you spend the majority of your time. Other factors considered in determining your domicile state would be such things as:

·     where your driver’s license is registered
·     where your vehicle is registered
·     where you are registered to vote
·     where you receive your mail
·     where your bank accounts are established
·     memberships with local organizations
·     local church affiliation

If you have a physical presence in the state of Nevada, then as long as you have also established some or all of the things on this list, this would be sufficient proof that you intend for Nevada to be your domicile, regardless of whether or not you maintain a second home in California.

If this was helpful please press the Accept button. Positive feedback is also appreciated.

Thank you.


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Customer: replied 7 years ago.
Thank you, XXXXX XXXXX I have an additional question which I am happy to pay a fee for. Once we establish a primary Nevada residence and my business continues to operate in Cal ,will any income my wife and I receive from it ,since it is a cal-based "S" corp, still be subject to state income tax becaue it is a Cal corp? We have 3 salaried employees inh the home office and 10 independent field agents. My wife and I were also on the payroll in 2008 but do not intend to be in 2009.