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In most high tax states, if you maintain property and intend to return, you remain tax residency in the state regardless if you’re in the state under 180 days.
Maybe you don’t get audited, but certainly in CA/MA/NY/NJ, you’d be dead on audit and have to be willing to take a position that’s clearly not only against the spirit but the actual law itself.
Take a look at the definition of domicile and come back.
Also book your gains only after you physically move to florida. You can't book profit on the days when you are in high tax state. They may use it against you
Update for those following: I’ve met with 2 tax attorneys who have both basically said the same things. 1) I will 💯 be flagged for audit, because will have partial year income taxable in current state and they will look at federal and see large LTCG just after a move to FL 2) if my spouse and kid stay behind, that is the biggest thing the current state will anchor to in order to make case I did not fully change “center of gravity” to FL 3) if I do all the things besides having spouse and kid join me now, like get license, register car, register to vote, change doctors/dentists, move bank accounts, join local clubs/churches, etc. to show I have legitimately moved and can prove not spending 183 days in current state (if you are in state even 1 second of the day, it counts as full day), I could argue spouse and kid are only staying for kid to finish high school in a couple years and could win on that, but would need to be fully committed to spouse moving when kid is done with high school and need to keep meticulous records of how many days I spend in current state over those couple of years as if I slip, they could come back and claim the move was all for tax avoidance. I’m unlikely to make the move to FL now, but will before my next LTCG which, if all goes well, will be 2-3 times this one in maybe 5 years. The attorneys advised making a move to a no tax state in time to have a full tax year before receiving gain and ensuring “center of gravity” is clearly demonstrated as fully moved and really no visibility of gain from current state. Thanks to all who offered insights and opinions here.
OP delivered, bravo 👏
Youre about to have a 3.5 million dollar capital gain and you’re coming to fishbowl for tax avoidance advice rather than consulting your cpa?
Also consulting them, but looking for other perspectives too. Trying to be as well informed as I can be. I figured why not ask a bunch of others who are clearly trying to do all they can to make great financial choices to set themselves up well for the future.
Mentor
You should talk to an accountant / tax professional, rather than a bunch of idiots on an anonymous app like this.
A $3.5M long term gain could be a 6 figure tax bill. I’d consult 3 or 4 tax professionals to get their opinion, even if it costs you $1k each to get their opinion. Then weigh the answers accordingly.
Also, don’t conflate state tax laws vs federal tax laws. Living in Florida won’t negate your federal obligations.
Finally, paying 6 figures on a $3.5m gain isn’t the end of the world. $2.XM in post-tax gain is life changing for many.
Hey, speak for yourself! Some of us are accountants and idiots!
Following.
No such thing as a FL 183 day rule to establish residency for tax purposes.
What matters is your current state’s rules for changing domicile, which may include the 183 days, and many other things.
Good luck in Florida. Florida is so hot that when you die and go to Hell, you wake up in Boca Raton.
Instead set up a non-profit trust that buy land as an investment/ museum, for you to to be the curator of. Watch the end of the film: All the money in the world .
Otherwise move to a US territory that does not pay federal taxes & instead requires an local investment of around 10k or something.
What is the source of the LTCG - can you not just avoid triggering it?
Give lots to charity