Thank you Diane for your reply.
We will live in both Utah for about 6 months each, so we will be part year residents in both and will have to pay taxes in both states. We could justify being domicile in either state, as it is unclear where our intent to end up will be at this point. Unlike most states where domicile means you are a resident, CA separates the two, where as you could be domiciled in CA and not even live there, paying taxes in another state.
It seems that which state I choose to be domiciled in does not really matter for taxes, as I will be part year residents of both. We want to sell the CA some day and get the 2 out of 5 year tax capital gain exclusion when we sell the home. If we spend 24 months in CA, and then change domicile to Utah, we should be able to sell the CA home and get the exclusion if we sell the home within 3 years period even if CA is no longer our principal residence.
That is how I understand it unless I have something wrong?
