Ron Hardin wrote:
- quote -

two states at the same time.

On Nov 27, 2:04 pm, "R. Pile" <michael.br...[at]wdn.com> wrote:
- quote -

It depends on the laws of the states involved, and the facts and
circumstances of the particular case. It is entirely possible for an
individual to be a tax resident of two states at the same time, and as
someone else here suggested, it often happens in that situation that
neither state will allow credit for tax paid to the other on income
from intangible assets such as stocks, bonds, CDs, etc. Such income
generally has its source at the residence of the owner; therefore, in
cases of dual residence, each state considers it to be source income.
Many "other state tax credit" statutes allow credit for taxes paid to
another state only on income with a source in that state. As a
result, neither state will allow credit for tax paid to the other on
that income.

Virginia allows credit for taxes paid to another state on income
sourced outside Virginia (Va. Code Ann. §58.1-332(A)). New York has
a similar provision (N.Y. Tax Law §620(a) ; NYCRR 20 §120.1).
Therefore, if your SIL is a resident of both states, and has income
from intangibles, neither state will give her credit for the tax paid
to the other on that income.

New York law defines a resident to include every individual domiciled
in the state, and every individual domiciled elsewhere who maintains a
permanent place of abode and spends more than 183 days of the taxable
year in the state (NYTL Sec. 605(b)). However, a NY domiciliary who,
during an entire tax year, does not maintain any permanent place of
abode in NY, does maintain a permanent place of abode somewhere else,
and spends 30 days or less of the tax year in NY is a nonresident.
NYCCR (Regulation) Sec. 105.20.

Virginia law defines a resident to include every individual domiciled
in the state ("domiciliary resident"), and every individual domiciled
elsewhere who maintains a place of abode in the state for more than
183 days of the taxable year ("actual resident") (Va. Code Ann.
§58.1-302 ; Va. Admin. Code 23 §10-110-30(B)). Note that the
language is a little different from New York's; Virginia does not use
the term "permanent" with reference to a place of abode.

Although a person can be a resident of two states at the same time
(for example, a NY domiciliary who meets the definition of an "actual
resident' of Virginia), one can have only one domicile at a time. In
order to change domicile, generally an individual must move away from
the previous domicile, move to and reside in a new location, and
intend to remain in the new location permanently or indefinitely. If
all three conditions have not been met, the domicile remains in the
previous location even if the individual has severed all ties to it.
Whether your SIL has established a new domicile in Virginia depends on
whether the arrangement with her sister is intended to be temporary,
or permanent or indefinite. If it is a temporary arrangement, she is
probably still domiciled in NY, especially if she has not taken other
actions consistent with a change of domicile such as registering to
vote in Virginia, obtaining a Virginia driver's license, licensing her
vehicle(s) in Virginia, moving her bank accounts to Virginia, etc.
Also, if the arrangement with her sister is temporary, she has not met
the requirements of the NY regulation to be treated as a nonresident
because she has no permanent place of abode outside NY.

Since she has lived with her sister for a year already, it seems
likely that their arrangement is at least indefinite, if not
permanent. Unless she has plans to move to a place of her own in the
near future, it sounds indefinite. That would make it a "permanent
place of abode" for purposes of the NY definition, and also suggest
that she may have made an effective change of domicile from NY to VA.

It sounds as though she is at least an "actual resident" of Virginia
for 2007, if not a domiciliary resident. In NY, even if her domicile
remains there, she is a nonresident if her sister's home is a
"permanent place of abode," because she has met all the other
requirements to be treated as a nonresident.

Based on the information provided, I'd probably consider her a full-
year resident of Virginia and a nonresident of NY for 2007. Of course
she would be required to file a nonresident return with NY to report
the rental income. Her pension income would be taxable only in
Virginia, which, alas, does not exempt it. However, there may be
other facts and circumstances not evident here that could change the
result.

Katie in San Diego

The foregoing is intended for educational purposes only and does not
constitute legal or professional advice. Nothing contained herein is
intended to be used, or can be used, by any person to avoid penalties
that may be imposed under federal or any state law.

Alan wrote:
- quote -

My assumption is that you're a resident of one or the other, and a part-time
resident of the other, whichever way it goes. In which case (in my experience)
the home state gives you credit for the taxes you paid on the part-time state
return.

--
rhhardin[at]mindspring.com

On the internet, nobody knows you're a jerk.

Ron Hardin wrote:
- quote -

resident. Intangible income is taxed by the state of residence.
In this instance both states would tax the intangible income.
Neither state will give you a credit for taxes paid to the other
state on intangible income. You usually get a credit for taxes
paid on income sourced in the other state. E.g., State A would
provide a credit (not to exceed State A tax rates) for taxes paid
to State B on compensation earned in State B.

Intangible income is such things as interest and dividends and
capital gains on securities.

"R. Pile" <michael.bratt[at]wdn.com> wrote in message
news:77a10193-1e46-47a9-a59a-400a3be69ee7[at]p69g2000hsa.googlegroups.com...
- quote -




For residency, consider 2 things.

1. domicile
2. number or days in the state

It is possible to be a resident of two states.





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





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Every state likes to have you as a resident ; it's sort of a wash for the
payer, since you get credit for taxes paid to the first state from the
second state, and thus wind up paying a total that's the tax of the highest
tax state, until you're free from the part-time resident status entirely.

I'd go with the 180 day rule as to where you're a full-time resident,
and pay the part-time resident tax for the other state.
--
rhhardin[at]mindspring.com

On the internet, nobody knows you're a jerk.

My sister-in-law and her husband are now in divorce proceedings.
Until late 2006 they lived together in a rented house in upstate NY.
He retired and filed for divorce and moved to another city in NY. She
does not work and moved in with her sister in VA, where she has now
lived for about a year.

Under terms of their settlement, he has been sending her money every
month; she will soon start to receive a portion of his NY State
pension. She solely owns a rental condominium in upstate NY that will
either break even or show a small loss in 2007. Otherwise, she has no
other income.

In 2006 she and her soon-to-be-former husband filed jointly; for 2007,
she will likely file separate at least to report the rental income and
expenses and, perhaps, the pension income.

She continues to claim she is a "legal resident" of NY, although she
has lived in VA for well over 183 days in 2007. Other than occasional
short visits to her son, other family and friends, she has not been in
NY all year. She has no obvious reason to return to NY (the son lives
near the rental property and is available, if needed), but also no
obvious reason holding her in VA either (other than low-cost
accommodations with her sister). NY does not tax NY State pension
income, hence the benefit of a claim of NY residency.

What State is she a resident of and what State tax return will she
need to file for 2007 - NY, VA? Both due to her living in VA with NY-
based rental income?

Thanks for any assistance.