Ken Meyer <KenMe...[at]noemail.net> wrote:

- quote -

California and Arizona have very similar statutory
definitions of a resident for tax purposes. In either
state, you are a resident if you are present in the state
for a purpose that is not temporary or transitory. If you
are domiciled in the state, you remain a resident if you are
absent for a temporary purpose. A person who is present in
the state for 9 months or more of the taxable year is
presumed to be a resident, although the presumption can be
overcome by proof that the presence is for a temporary
purpose. According to the California regulations, the state
of residence is the state where the taxpayer has the closest
connection during the taxable year. Ariz. Rev. Stat. Ann.
=A7 43-1011; Cal. Rev. & Tax. Code Sec. 17014; 18 Cal. Code
Regs. Sec. 17014.

In a situation like yours, the FTB would look at all of the
facts and circumstances. An auditor would ask for all of
your cancelled checks, credit card records, utility bills,
investment records, etc to determine your "closest
connection." As Gil suggested, the cleanest way to do this
is to definitively change your domicile from California to
Arizona. In order to do that, you must move away from
California, move to Arizona, and intend to remain in Arizona
permanently or indefinitely. Otherwise your domicile
remains in California. The downside of that is that Arizona
may then say you are a resident because when you are present
there, you are present for a purpose that is not temporary
or transitory. At the same time, California could say that
when you are in California, that is also for a purpose that
is not temporary or transitory. You could get into a
situation where you are considered a resident by both states
at the same time. In that case, both states would tax your
investment and retirement income, and it is not likely that
either would allow you any credit for taxes paid to the
other.

One of the facts the FTB would look at is the relative
substantiality of your home in each state. In other words,
if you own a substantial home in California and a condo in
Arizona, that would be evidence that your primary residence
is in California.

If you want to do this, you should sever as many of your
ties to California as possible, and create as many ties as
possible to Arizona. As you suggested, register to vote in
AZ (and actually vote there), register your cars there, get
an Arizona driver's license, move your bank accounts to AZ,
find doctors, dentists, accountant, lawyer, etc. in Arizona,
and spend as little time as possible in California. Keep a
diary and documentary records of your travels and the time
you spend in each place and elsewhere. Air ticket
confirmations, gas receipts, etc. should be retained to
document travel to and from CA and elsewhere. If possible,
any travel outside those two states should begin and end in
AZ, not CA -- in other words, fly in and out of Phoenix, not
a California airport. Renting your California house would
be very helpful, but if you want to retain it as a vacation
home, minimize the time you spend there, especially until
the statute of limitations expires on the tax return for the
year in which you change your residence. (That's 4 years in
California.)

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. > << ================================================== ===== >

- quote -

Keep in mind that California wants to keep collecting your
tax money, so to them you are a resident. The best way to
stop being a resident is to stay away.

Even if you want to vacation in California, I recommend you
move all your bank and investment accounts to Arizona (why
not pick a state free of income and estate tax, while you
are at it?), rent out you California house, and don't set
foot in California for a couple of years. Then, after that,
just visit briefly.

This may be a bit of overkill, but then again, it might not.

<< ================================================== ===== > << 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. > << ================================================== ===== >

"Ken Meyer" <KenMeyer[at]noemail.net> wrote:

- quote -

The only way to be a part year resident is to move in or out
of a given state. Whether you are a resident of a state can
be a complex matter & has been the subject of much
litigation.

So, you should start by reading the instructions to the tax
forms. It ususally indicates the criteria of being
considered a resident. You should also take a look at the
relevent court cases for your situation.

___________________________________
<<< Benjamin Yazersky, CPA [NJ & NY] > > -----> real address on hobokeni or hobokenx <-----

<< ================================================== ===== > << 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. > << ================================================== ===== >

I have been a California resident for many years. I've paid
state income tax the whole time, and had various homes in
California. I'm retired; my income comes entirely from
investments, many of them are California tax-free muni
bonds. I vote in California, and I have some relatives in
California, but nobody very close by.

A year ago, I built a vacation home in Arizona; I purchased
and registered a car in Arizona (I have a car in California
too, and my driver's license is from California).

Over the last year, I've found I'm spending more time in
Arizona and less time in California. This year, it looks
like I'll be in Arizona just over 6 months, California about
5 months, and neither state the remainder. I like Arizona,
and I'd like to be considered a resident of Arizona. Doing
that would also have have some tax benefits for me. So, I'm
looking into what it would take to be considered an Arizona
resident. And more importantly, what it would take NOT to be
considered a California resident anymore.

If I take out a driver's license in Arizona, register to
vote in Arizona, consider Arizona my main home, and continue
to live in Arizona more than half of each year, am I an
Arizona resident? Will California (properly) decide that I
am still a California resident? Would it take selling my
California home to renounce California residency? Does
selling the CA tax-free bonds help?

How does one STOP being a resident of California while still
owning and occasionally occupying a home in California? If I
take steps to show that my intent is to consider Arizona my
main place of residence, how high is the risk that I'll wind
up with both states considering me a resident or part-year
resident? That's certainly not the goal.

All help appreciated.

Ken

<< ================================================== ===== > << 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. > << ================================================== ===== >