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Article: Relocating on retirement: contacts with two states can have adverse local tax consequences.
- Article from:
- The Practical Accountant
- Article date:
- July 1, 2002
- Author:
CopyrightCOPYRIGHT 2002 SourceMedia, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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It is not uncommon for those who can afford it to acquire a home in Florida for example, while living and running a business in say N.Y. Over time, the people may spend more and more time in Florida with the idea of retiring there after the business is sold, or passed on to family members.
For such high-income people, it is necessary to plan how to establish "domicile" in one place so that a high income tax state such as N.Y. won't be able to impose an income tax after the individuals have made the move. Domicile refers to the state where the taxpayer intends to return and considers his or her permanent place of abode.
In the past, decisions to change ...