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Lane
Lane, JD, CFP, MBA, CRPS
Category: Tax
Satisfied Customers: 10163
Experience:  Law Degree, specialization in Tax Law and Corporate Law, CFP and MBA, Providing Financial & Tax advice since 1986
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I own a home in and am thinking about buying a home in

Customer Question

I own a home in Virginia and am thinking about buying a home in Florida. Do I have to pay Virginia income tax?
Submitted: 1 year ago.
Category: Tax
Expert:  Lane replied 1 year ago.

Hi,

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The task here will be to ESTABLISH RESIDENCY in florida.

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MANY states, especially if you re moving to a state that does not have an income tax, will want to make the xcase that ytur intent is to move back to VA, and that if you don't cut all ties, your time in the other state is "transitory."

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Hang on and I'll get the Virginia rules...

Expert:  Lane replied 1 year ago.

OK from VA ... (the next step is to see how they define domicile):

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"

Virginia law imposes individual income tax filing requirements on virtually all Virginia residents, as well as on nonresidents who receive income from Virginia sources. The correct method for filing your income tax return and reporting Virginia taxable income depends on your residency status. Following the brief definitions shown below, each residency status, with corresponding filing requirements, is discussed in detail.

Resident: -- A person who lives in Virginia, or maintains a place of abode here, for more than 183 days during the year, or who is a legal (domiciliary) resident of the Commonwealth is considered a Virginia resident for income tax purposes."

Expert:  Lane replied 1 year ago.

Now, see this:

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Virginia Residents

There are two types of Virginia residents: actual and domiciliary.

Actual Residents: -- Individuals who are physically present in Virginia, or who maintain a place of abode here for more than 183 days during the taxable year are actual residents. The period of residency does not have to be consecutive days. Most Virginia residents are actual residents of Virginia.

It is possible to be an actual resident of Virginia and a domiciliary resident of another state. For example, dual status commonly occurs when a resident of another state enrolls in a Virginia school and lives here during the school year.

Domiciliary Residents: -- Individuals whose state of legal residence in the technical sense is Virginia are domiciliary residents. Most domiciliary residents actually live in Virginia. Examples of individuals who are domiciliary residents but who do not live in Virginia are shown below:

  • An individual who enters the military from Virginia (i.e., claims Virginia as his/her home of record) will remain a domiciliary resident of Virginia, unless appropriate steps are taken to abandon Virginia as the state of domicile.

  • A student who attends school in another state, but maintains Virginia as his/her legal state of residence, is a domiciliary resident.

  • A resident of Virginia who accepts employment in another country is a domiciliary resident, unless appropriate steps are taken to abandon Virginia as the state of domicile.

If you are a Virginia resident, file your income tax return on Form 760. Some points you should keep in mind:

  • A Virginia resident return must include income from all sources.

  • No subtractions are allowed for income reported to other states. Income taxes paid to other states are addressed through tax credits.

  • No tax credits are allowed for income taxes paid to foreign countries, except on foreign source pension income. In addition, no tax credits or deductions are allowed for taxes paid to any city, county or other local government or to the federal government.

Expert:  Lane replied 1 year ago.

So, here's the bot***** *****ne ... simply buying a house iin Florida will not ALONE be enough to abandon domicile.

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"An individual may be subject to Virginia resident income tax even though he or she resides outside of Virginia if the individual has established, and has not abandoned, a Virginia domicile."

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Expert:  Lane replied 1 year ago.

First there's that 183 day rule:

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An individual who is not a Virginia resident pays Virginia income tax only on the portion of his or her income that was generated in Virginia. Va. Code §58.1-325.

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For this purpose, an individual is a Virginia resident if he or she maintains his or her place of abode in Virginia for at least 183 days during the year. Even if the individual does not live in Virginia during the year, the individual will be a Virginia resident for income tax purposes if he or she is domiciled in Virginia. Va. Code §58.1-203 (definition of “resident”)

Expert:  Lane replied 1 year ago.

Now, if this comes down to things being unclear, "in a gray area," so to speak. ... VA will say that it is your INTENT [to return to VA] that establishes domicile

Expert:  Lane replied 1 year ago.

From an excellent overview of this issue, by Thompson McMullan:

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"Va. Code §58.1-302 defines an individual’s domicile as his permanent place of residence and the place to which he intends to return, even though he may reside elsewhere from time-to-time.

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Section 302 suggests that objective factors such as: financial independence, business pursuits, employment, income sources, residence for federal income tax purposes, marital status, residence of parents, spouse and children, if any, sites of personal and real property owned or leased by the individual, motor vehicle and other personal property registration, and voter registration be taken into consideration in determining an individual’s domicile."

Expert:  Lane replied 1 year ago.

Now 23 VAC 10-110-30 goes further...

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...saying that "a change in domicile requires two concurrent actions — residence in a new locale and the intention to remain there indefinitely."

Expert:  Lane replied 1 year ago.

The other tow pieces addressed Code § 10-110-30 are as follows:

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(1) The regulation states that the return of an individual to Virginia within six months after moving from the Commonwealth is prima facie evidence that the individual did not intend to move his domicile from Virginia, and

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(2) The regulation imposes the burden the burden of proving abandonment or failure to establish domicile in Virginia on the individual seeking to avoid a Virginia domicile.

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Expert:  Lane replied 1 year ago.

I hope this helps

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As I never saw you come into the chat here, I tried to give you enough information to apply YOUR facts against the law here.

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Please let me know if you have questions

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Lane

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this HAS helped, and you don't have additional questions on this, I'd appreciate a positive rating (by clicking the stars or smiley faces on your screen) ... that's the only way I'll be credited with a portion of what you've paid JustAnswer.
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Lane

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Customer: replied 1 year ago.
I dont really think you answered my question. I am planing on living in Florida for 8 months of the year and in Virginia for the other 4. Does that mean I can avoid Virginia income tax because I am not here for 183 days. Mark
Expert:  Lane replied 1 year ago.

No, it does not.

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As i mentioned above ...

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For this purpose, an individual is a Virginia resident if he or she maintains his or her place of abode in Virginia for at least 183 days during the year. Even if the individual does not live in Virginia during the year, the individual will be a Virginia resident for income tax purposes if he or she is domiciled in Virginia. Va. Code §58.1-203 (definition of “resident”).

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It's not about where YOU are for 183 days ... it's about whether you "maintain the place of abode in VA for at least 183 days..."

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That, along with the definitions of Domicile and intent (your intent to return being evidenced BY your not relinquishing the VA property) make this VERY clear.

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You will file a VA resident return and pay taxes on all worldwide income

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Sorry for the data dump above, but I wanted you to see that you have problems in three areas (1) Place of abode not being relinquished (2) domicile and the related (3) intent to return

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Hope this helps to clarify

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Lane

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I hope you'll rate me positively, using the stars on your screen … (that's the only way we get credit for the work here) … based on thoroughness and accuracy, rather than any good news/bad news content ... Hopefully having all the facts will help you see around some corners.

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