Capital Gains/IRA Distributions in Old State and New Permanent State

[drmillerkc]

My wife and I (both over 65) will have no income from work or Social Security in 2020, but require traditional IRA distributions and perhaps capital gains from stock sales to provide for living expenses for the first few months of 2020. We plan to continue living in Kansas for those first 4-5 months of 2020 and then establish permanent residency in Florida for the remainder of the year.

My question is: if we generate a lump sum IRA distribution or sell stock with long term capital gains in January 2020  (to just cover expenses for the first 4-5 months of 2020), will we still owe state taxes in Kansas on that income? Or since we will be established residents in Florida, those IRA distributions, capital gains, and even dividend/interest income for the entire year, will all that income be taxed at the 0% rate in Florida and no tax from Kansas?

[rjs · Accepted solution]

You have to pay Kansas tax on any income that you receive while you are still residents of Kansas. You will have to file a part-year resident tax return for Kansas. The income that you received before you left the state will be shown as Kansas income on that tax return, and will be taxed by Kansas.

[Anonymous]

correct once you establish residency in Florida income received while a resident there is not ta.  as a matter of fact there is no income tax return to file.

regarding stock sales and RMD's  if possible while in Kansas sell stock with little capital gains making little of the sales taxable.  if possible defer RMD's until you reside in Florida  or only take out enough to live on in Kansas and take the remainder once in Florida

[drmillerkc]

Thanks for the replies. Yeah, I was hoping for less granularity (year vs. month vs. day) LOL. So, it seems the best strategy is to live on after-tax savings for as long as comfortably possible, and then incur the very least amount of Kansas state tax liability by taking the smallest amounts of capital gains and IRA distributions each month/week until we set foot in, and establish permanent residency in Florida.