[PatentGuy]

Flu,

Convincing Nevada that you have your “legal residence” in NV is nice, but what matters is convincing a court (should it come to that), should California disagree.

There are lots (millions?) of U.S. citizens that have homes in more than one state, and picking which one is your “principal” residence should be done with care. At a minimum, I would expect your drivers license to match, and also where you register to vote. As far as I know, you can only have one active, valid drivers license, and you have to surrender any others as a condition.

Having said this, I understand that most (all?) states that have an income tax have laws (upheld by federal courts) that entitle them to collect income tax from you based on all wages earned while you are present in their state. For example, if you are visiting for a sales meeting, or a deposition, or the like. They love to pick on high wage earners like sports starts and media personalities (Google Rush Limbaugh and New York state taxes).

But, I am talking about retirement, when our income will be derived solely from a combination of already taxed savings plus taxible pension plan distributions (CB Plan, IRA, 401K, 403(b), 457). for whatever reasons, the federal courts spanked California for trying to come after Nevada residents for taxes on 401k distributions, even though the plan was funded from tax-free earnings made in California. Doesn’t seem much different than the “you owe us cause that’s where you earned it” laws, but ….

[PatentGuy]

Flu,

Convincing Nevada that you have your “legal residence” in NV is nice, but what matters is convincing a court (should it come to that), should California disagree.

There are lots (millions?) of U.S. citizens that have homes in more than one state, and picking which one is your “principal” residence should be done with care. At a minimum, I would expect your drivers license to match, and also where you register to vote. As far as I know, you can only have one active, valid drivers license, and you have to surrender any others as a condition.

Having said this, I understand that most (all?) states that have an income tax have laws (upheld by federal courts) that entitle them to collect income tax from you based on all wages earned while you are present in their state. For example, if you are visiting for a sales meeting, or a deposition, or the like. They love to pick on high wage earners like sports starts and media personalities (Google Rush Limbaugh and New York state taxes).

But, I am talking about retirement, when our income will be derived solely from a combination of already taxed savings plus taxible pension plan distributions (CB Plan, IRA, 401K, 403(b), 457). for whatever reasons, the federal courts spanked California for trying to come after Nevada residents for taxes on 401k distributions, even though the plan was funded from tax-free earnings made in California. Doesn’t seem much different than the “you owe us cause that’s where you earned it” laws, but ….

[PatentGuy]

Flu,

Convincing Nevada that you have your “legal residence” in NV is nice, but what matters is convincing a court (should it come to that), should California disagree.

There are lots (millions?) of U.S. citizens that have homes in more than one state, and picking which one is your “principal” residence should be done with care. At a minimum, I would expect your drivers license to match, and also where you register to vote. As far as I know, you can only have one active, valid drivers license, and you have to surrender any others as a condition.

Having said this, I understand that most (all?) states that have an income tax have laws (upheld by federal courts) that entitle them to collect income tax from you based on all wages earned while you are present in their state. For example, if you are visiting for a sales meeting, or a deposition, or the like. They love to pick on high wage earners like sports starts and media personalities (Google Rush Limbaugh and New York state taxes).

But, I am talking about retirement, when our income will be derived solely from a combination of already taxed savings plus taxible pension plan distributions (CB Plan, IRA, 401K, 403(b), 457). for whatever reasons, the federal courts spanked California for trying to come after Nevada residents for taxes on 401k distributions, even though the plan was funded from tax-free earnings made in California. Doesn’t seem much different than the “you owe us cause that’s where you earned it” laws, but ….

[PatentGuy]

Flu,

Convincing Nevada that you have your “legal residence” in NV is nice, but what matters is convincing a court (should it come to that), should California disagree.

There are lots (millions?) of U.S. citizens that have homes in more than one state, and picking which one is your “principal” residence should be done with care. At a minimum, I would expect your drivers license to match, and also where you register to vote. As far as I know, you can only have one active, valid drivers license, and you have to surrender any others as a condition.

Having said this, I understand that most (all?) states that have an income tax have laws (upheld by federal courts) that entitle them to collect income tax from you based on all wages earned while you are present in their state. For example, if you are visiting for a sales meeting, or a deposition, or the like. They love to pick on high wage earners like sports starts and media personalities (Google Rush Limbaugh and New York state taxes).

But, I am talking about retirement, when our income will be derived solely from a combination of already taxed savings plus taxible pension plan distributions (CB Plan, IRA, 401K, 403(b), 457). for whatever reasons, the federal courts spanked California for trying to come after Nevada residents for taxes on 401k distributions, even though the plan was funded from tax-free earnings made in California. Doesn’t seem much different than the “you owe us cause that’s where you earned it” laws, but ….

[PatentGuy]

Flu,

Convincing Nevada that you have your “legal residence” in NV is nice, but what matters is convincing a court (should it come to that), should California disagree.

There are lots (millions?) of U.S. citizens that have homes in more than one state, and picking which one is your “principal” residence should be done with care. At a minimum, I would expect your drivers license to match, and also where you register to vote. As far as I know, you can only have one active, valid drivers license, and you have to surrender any others as a condition.

Having said this, I understand that most (all?) states that have an income tax have laws (upheld by federal courts) that entitle them to collect income tax from you based on all wages earned while you are present in their state. For example, if you are visiting for a sales meeting, or a deposition, or the like. They love to pick on high wage earners like sports starts and media personalities (Google Rush Limbaugh and New York state taxes).

But, I am talking about retirement, when our income will be derived solely from a combination of already taxed savings plus taxible pension plan distributions (CB Plan, IRA, 401K, 403(b), 457). for whatever reasons, the federal courts spanked California for trying to come after Nevada residents for taxes on 401k distributions, even though the plan was funded from tax-free earnings made in California. Doesn’t seem much different than the “you owe us cause that’s where you earned it” laws, but ….

[PatentGuy]

Bob2007,

I agree it is more complicated than just the tax.

Assuming California prices remain significantly higher than in other suitable states/areas, staying in CA means having too much cash tied up in a house. In HI, at least we get a premium location for the $ that we hope to enjoy for many years to come, but the premium we pay in CA (we live in Los Gatos-Saratoga area south of SF) is mostly for our kids (e.g., schools), and that premium will no longer be useful to us in retirement.

I would rather own a $500K house someplace outside of California and get to spend that extra $1M over the course of retirement, than stay in a $1.5M house in California that my kids inherit, or that gets sold to pay medical bills when one or both of us hits the end of life medical care phase.

[PatentGuy]

Bob2007,

I agree it is more complicated than just the tax.

Assuming California prices remain significantly higher than in other suitable states/areas, staying in CA means having too much cash tied up in a house. In HI, at least we get a premium location for the $ that we hope to enjoy for many years to come, but the premium we pay in CA (we live in Los Gatos-Saratoga area south of SF) is mostly for our kids (e.g., schools), and that premium will no longer be useful to us in retirement.

I would rather own a $500K house someplace outside of California and get to spend that extra $1M over the course of retirement, than stay in a $1.5M house in California that my kids inherit, or that gets sold to pay medical bills when one or both of us hits the end of life medical care phase.

[PatentGuy]

Bob2007,

I agree it is more complicated than just the tax.

Assuming California prices remain significantly higher than in other suitable states/areas, staying in CA means having too much cash tied up in a house. In HI, at least we get a premium location for the $ that we hope to enjoy for many years to come, but the premium we pay in CA (we live in Los Gatos-Saratoga area south of SF) is mostly for our kids (e.g., schools), and that premium will no longer be useful to us in retirement.

I would rather own a $500K house someplace outside of California and get to spend that extra $1M over the course of retirement, than stay in a $1.5M house in California that my kids inherit, or that gets sold to pay medical bills when one or both of us hits the end of life medical care phase.

[PatentGuy]

Bob2007,

I agree it is more complicated than just the tax.

Assuming California prices remain significantly higher than in other suitable states/areas, staying in CA means having too much cash tied up in a house. In HI, at least we get a premium location for the $ that we hope to enjoy for many years to come, but the premium we pay in CA (we live in Los Gatos-Saratoga area south of SF) is mostly for our kids (e.g., schools), and that premium will no longer be useful to us in retirement.

I would rather own a $500K house someplace outside of California and get to spend that extra $1M over the course of retirement, than stay in a $1.5M house in California that my kids inherit, or that gets sold to pay medical bills when one or both of us hits the end of life medical care phase.

[PatentGuy]

Bob2007,

I agree it is more complicated than just the tax.

Assuming California prices remain significantly higher than in other suitable states/areas, staying in CA means having too much cash tied up in a house. In HI, at least we get a premium location for the $ that we hope to enjoy for many years to come, but the premium we pay in CA (we live in Los Gatos-Saratoga area south of SF) is mostly for our kids (e.g., schools), and that premium will no longer be useful to us in retirement.

I would rather own a $500K house someplace outside of California and get to spend that extra $1M over the course of retirement, than stay in a $1.5M house in California that my kids inherit, or that gets sold to pay medical bills when one or both of us hits the end of life medical care phase.

[PatentGuy]

Bob2007 asks “why not relocate now?”, especially to quit paying high state income taxes. Good question.

I’ve met more than one self-employed professional who maintains their primary residence in NV (or FL) just for income tax reasons, but still spends lots of time in Silicon Valley for work reasons.

But, for now, we are tied to CA. I have a son at SFSU (just finishing his second year), another son is a junior at the local public high school, and my wife teaches in the local elementary district.

Raybyrnes: While none of us know what the government will do, I tend to agree with Flu, and we all seem to agree the government will be desperate for $, and whether they call it a “tax” or a denial of benefits based on ones assets, the result will be the same.

My pre-tax IRA was funded entirely from rollovers of prior-employer 401K and Cash Balance Plans. I “crunched the numbers” and, assuming the respective fed and state governments do not tax the gains or otherwise financially penalize us for having the gains, it was a winner to pay the taxes now IF our combined marginal tax rate at time of distribution was over 33% – BUT depends greatly on how much you predict your gains will be prior to distribution. If you predict higher gains, make more sense to pay taxes now.

[PatentGuy]

Bob2007 asks “why not relocate now?”, especially to quit paying high state income taxes. Good question.

I’ve met more than one self-employed professional who maintains their primary residence in NV (or FL) just for income tax reasons, but still spends lots of time in Silicon Valley for work reasons.

But, for now, we are tied to CA. I have a son at SFSU (just finishing his second year), another son is a junior at the local public high school, and my wife teaches in the local elementary district.

Raybyrnes: While none of us know what the government will do, I tend to agree with Flu, and we all seem to agree the government will be desperate for $, and whether they call it a “tax” or a denial of benefits based on ones assets, the result will be the same.

My pre-tax IRA was funded entirely from rollovers of prior-employer 401K and Cash Balance Plans. I “crunched the numbers” and, assuming the respective fed and state governments do not tax the gains or otherwise financially penalize us for having the gains, it was a winner to pay the taxes now IF our combined marginal tax rate at time of distribution was over 33% – BUT depends greatly on how much you predict your gains will be prior to distribution. If you predict higher gains, make more sense to pay taxes now.

[PatentGuy]

Bob2007 asks “why not relocate now?”, especially to quit paying high state income taxes. Good question.

I’ve met more than one self-employed professional who maintains their primary residence in NV (or FL) just for income tax reasons, but still spends lots of time in Silicon Valley for work reasons.

But, for now, we are tied to CA. I have a son at SFSU (just finishing his second year), another son is a junior at the local public high school, and my wife teaches in the local elementary district.

Raybyrnes: While none of us know what the government will do, I tend to agree with Flu, and we all seem to agree the government will be desperate for $, and whether they call it a “tax” or a denial of benefits based on ones assets, the result will be the same.

My pre-tax IRA was funded entirely from rollovers of prior-employer 401K and Cash Balance Plans. I “crunched the numbers” and, assuming the respective fed and state governments do not tax the gains or otherwise financially penalize us for having the gains, it was a winner to pay the taxes now IF our combined marginal tax rate at time of distribution was over 33% – BUT depends greatly on how much you predict your gains will be prior to distribution. If you predict higher gains, make more sense to pay taxes now.

[PatentGuy]

Bob2007 asks “why not relocate now?”, especially to quit paying high state income taxes. Good question.

I’ve met more than one self-employed professional who maintains their primary residence in NV (or FL) just for income tax reasons, but still spends lots of time in Silicon Valley for work reasons.

But, for now, we are tied to CA. I have a son at SFSU (just finishing his second year), another son is a junior at the local public high school, and my wife teaches in the local elementary district.

Raybyrnes: While none of us know what the government will do, I tend to agree with Flu, and we all seem to agree the government will be desperate for $, and whether they call it a “tax” or a denial of benefits based on ones assets, the result will be the same.

My pre-tax IRA was funded entirely from rollovers of prior-employer 401K and Cash Balance Plans. I “crunched the numbers” and, assuming the respective fed and state governments do not tax the gains or otherwise financially penalize us for having the gains, it was a winner to pay the taxes now IF our combined marginal tax rate at time of distribution was over 33% – BUT depends greatly on how much you predict your gains will be prior to distribution. If you predict higher gains, make more sense to pay taxes now.

[PatentGuy]

Bob2007 asks “why not relocate now?”, especially to quit paying high state income taxes. Good question.

I’ve met more than one self-employed professional who maintains their primary residence in NV (or FL) just for income tax reasons, but still spends lots of time in Silicon Valley for work reasons.

But, for now, we are tied to CA. I have a son at SFSU (just finishing his second year), another son is a junior at the local public high school, and my wife teaches in the local elementary district.

Raybyrnes: While none of us know what the government will do, I tend to agree with Flu, and we all seem to agree the government will be desperate for $, and whether they call it a “tax” or a denial of benefits based on ones assets, the result will be the same.

My pre-tax IRA was funded entirely from rollovers of prior-employer 401K and Cash Balance Plans. I “crunched the numbers” and, assuming the respective fed and state governments do not tax the gains or otherwise financially penalize us for having the gains, it was a winner to pay the taxes now IF our combined marginal tax rate at time of distribution was over 33% – BUT depends greatly on how much you predict your gains will be prior to distribution. If you predict higher gains, make more sense to pay taxes now.

[Author]

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