Why moving to a low-tax state like billionaire Carl Icahn may backfire for you.
To be considered a statutory resident — and taxed as a resident of that state — you had to have spent 183 days there during the year and you must maintain a permanent place of abode there.
The domicile test considers five key aspects that determine whether your true home — the place you return to after you've been on the road — is in fact in that state. These are the five factors that determine your domicile and that are likely to be studied in any audit.Ty Wright | Bloomberg | Getty Images"If you want to lose your case with the auditor, you keep your big and beautiful home in Minneapolis, but you rent in Boca Raton," said Mark S. Klein, tax attorney and partner at Hodgson Russ in New York City.
While moving south, this client decided to maintain his fishing license in western New York, where he paid $12 as a resident. Had he purchased a fishing license for visitors, he would have ponied up $75. An auditor would seize on this slip-up and cite it as evidence that this individual was still a resident of the Empire State.2. Your businessGot a business headquarters in New York or in California? Do you maintain an office there?Icahn strengthened his case that he's moving to Florida by shutting down the office in Manhattan. "If I close my office in New York and open an office in Florida, how can they say I'm based in New York when I live and work in Florida?" asked Steiner.
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