tax[at]together-dot-net.no-spam.invalid says...

- quote -

The total gain is well over $1 million (must be half of the
state!). The clients have other homes, so the residency
issue is a little sticky. It looks like they will be
nonresidents for 2005, so the mandatory withholding on the
sales price will apply.

The good news for them is that with a large gain, some of
their charitable contribution carryforward will get used.

Gary

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Gary: I guess it is a good thing Vermont is 1250 miles from
Lower Alabama. Vermont simply taxes on a % of the federal
tax minus a few federal credits. This equally applies to a
resident for all income (minus a credit if another state is
involved) and a non-resident for only Vermont income done
on the % of Vt Income to total income. Your clients sale of
home will result in no Federal Tax thus no Vermont Tax
whether he is a resident or non-resident.

Aside: Don't know why but I am being double posted.
Usually when someone else answers my last post. Perplexing!

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Gary Goodman wrote:

- quote -

Yes. All states nearby that I'm familiar with allow the
federal type exlusion to residents only. Hence if someone
has already moved away, how can he be a resident?

ChEAr$,
Harlan Lunsford, EA n LA

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You are correct, the State of Vermont accepts federal
taxation rules of sales of residences. Attorney might have
been referring to the fact that a non-resident will have 2
1/2 % of proceeds state income tax withheld from sale of any
Vermont property which means filing a Vt return to get it
back. (common in many states). Also if your client owns
the house on Apr 1st next year the state education tax rate
will be 49 cents per 00 higher than residents because they
are now non-residents and because unfortunately the Vt
Legislature has no non-residents in it plus they will no
longer be elgible for a state property tax rebate since they
will be non-residents (might have not been anyway since it
is income sensitive).

Other than the above minor issues, assume either the
attorney doesn't know (not unheard of) or the client
misunderstood something that was said (happens more than we
want to believe).

Hope this helps:

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >

A client is contemplating a move from Vermont to another
state. He told us that his lawyer says that if they move
first, then sell their home in VT, that they will miss out
on a tax break. Supposedly, the lawyer said that they should
sell the house, then move.

I can't find anything about this other than VT following the
federal Section 121 on home sales (they will qualify).

Has anybody else heard of this?

Thanks,
Gary

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directly, please send an e-mail to: gary at gdgoodman dot com.

<< ================================================== ===== > << The foregoing is intended for educational purposes only > << and does NOT constitute legal OR professional advice. > << > << The Charter and the Guidelines for submitting > << messages to this newsgroup are at www.asktax.org. > << Copyright (2005) - All rights reserved. > << ================================================== ===== >