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dhawal_kumar
Level 2

Domicile for CA FTB when keeping home in 2 states

Hi,

I am moving from CA to TX.  I have a home in CA that I'd like to keep (not rent out or sell), say, as my vacation home. I will be buying a home in TX (which will now be my primary residence). Will keeping the home in CA create a problem wrt CA tax audit? Please assume that I will be doing the following

  1. Updating DL to TX
  2. Registering cars in TX
  3. Updating addresses on bank accounts (do I need to close old bank accounts like 

    https://ttlc.intuit.com/community/file-with-turbotax/discussion/what-s-my-residency/00/2337204 suggests)

  4. Updating addresses on credit cards, insurance policies,
  5. Updating address in my employer's records (employer will adjust the tax withholding after the move)
  6. Registering to vote in TX
4 Replies
dclick
Employee Tax Expert

Domicile for CA FTB when keeping home in 2 states

First off, I would like to commend you for your detailed question. 

Sounds like you are taking the steps to properly establish your intentions and domicile.

A vacation home being maintained does not establish residency.

The more time that elapses after you move to a new state and the more steps you take to establish domicile in that state, the harder it will be for your old state to claim that you’re still a resident for tax purposes.


I would suggest keeping a record of your locations and dates for review at the end of the tax year. If you do not establish permanent residence, get state level identification, or make other major moves towards establishing a permanent residence you will likely not owe income tax in a state due solely to a short term visit.

If you ever receive a letter from the CA FTB, you would simply want to use copies of the many documenting factors of residency in TX you listed to prove your status.

I hope this helps!

-Dennis

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Bsch4477
Level 15

Domicile for CA FTB when keeping home in 2 states

The steps you have outlined should be sufficient to satisfy the FTB that you are not a California resident once you have lived in TX for a tax year. 

dhawal_kumar
Level 2

Domicile for CA FTB when keeping home in 2 states

Thanks a lot Dennis. And would you say that I need to close old bank accounts and open new ones or changing addresses on them is sufficient? One of my banks is purely online and the other one has local banking centers in both states.

dclick
Employee Tax Expert

Domicile for CA FTB when keeping home in 2 states

It would seem sufficient, especially in light of the other substantial evidence of legal presence and domiciliary efforts you have made with the many other items you are changing over.

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