Archimedes

Don't worry, they'll gladly let you contest it. There's plenty of precedent in California around this issue. If you spend a significant amount of time in the state, they will assert residence. They will look at whether you own property, work, kids attend school in the State. They'll look at your credit cards to see where you spend your money. They'll look at whether you have any memberships in any clubs or organizations in the State. Anyone can cheat on their taxes, but doing it by skirting the residence rules in California is very risky and a lot of people have figured that out the hard way.

joejenie

What's your thoughts if I live in AZ but spend 90 days in CA (rent not buy) to get out of the summer heat? Issues with CA on tax items? 80% of my income is made in UT and 20% in AZ. I currently have a summer home in WY, but my wife wants me to sell it and wants to spend the summers on the beach in Newport area. Hotel or 90 day VRBO or something. Would CA try to come after me for residency?

Archimedes

Anecdotal and market timing luck. I bought in 1999, sold in 2016. Got a ridiculous price for a small house in a very good neighborhood. My 17 year compounded return on investment, giving consideration to the remodeling costs on the house, was just over 5 percent. Worse than if I had put the money in the market and rented. This is not atypical of the Bay Area. Over the long term, there is a return, but it's not like buying Apple years ago. Oh, and in California, the gain on your house is taxed as ordinary income, not at a reduced capital gains rate. California has no State capital gains tax rates.

Sure you can get lucky out here and happen to time the market perfectly, but it's no different than market timing with equities. Mostly luck. Over the long term real estate rises and falls significantly here, and the long term trend line is not a hockey stick. And given how dramatic the down trends can be and how extended they can last, I tell anyone buying here, you need to have enough wealth to be able to stay in your house for five years even if things go south, or you risk having to sell into a downturn and getting killed.

When I bought our current house last year, I went in assuming that 1/3rd of the value could easily disappear in the next 2-10 years.

phow

Coming from IL I really didn't feel it. We were already taxed to death and for the privilege of living in a boring landscape with terrible weather and stagnant housing. The city of Chicago is probably one of my favorite downtowns of anywhere. We will probably end up having a second place in Gold Coast since we do return to visit pretty often for business and to see family.

My wife and I originally planned to head to Malibu but after the fires it really scared the hell out of us. Granted Malibu is almost 30 miles long and most of southern Malibu was not affected but it still gives you a moment of pause. I think our goal will be to buy our next home in the Palisades. Close to Malibu but not too close lol...

Archimedes

Not if you don't work, don't buy property or enter into a lease, don't register a car, don't join clubs or use regular doctors, don't send your kids to school, etc. People who validly come here to vacation part of the year have no problem. People who truly try to live here a material part of the year and just not establish legal residence here are the ones who have a problem. The Ca FTB is very aggressive. If they weren't, everyone would be cheating and have a Nevada address.

phow

CA FTB isn't going around and peering through your windows trying to assess your residency. Residency audits are triggered because something is sent to Sacramento that raises suspicion. Here is a good article that explains how things are triggered:
https://www.palmspringstaxandtrustla...-nonresidents/

Just be smart. Don't do things like open a bank account in CA because the interest earned will be reported to CA. As long as some tax form doesn't get sent to Sacramento linking you to CA as a resident, you will likely not be audited.

robmypro

My grandparents lived in Palisades their entire lives, and they had a weekend getaway beach house in Malibu. They bought the beach house for $35k long ago because it was cheap and nobody wanted to live that far from the jobs in LA. My dad ate lobster every weekend, as they had traps right out front of the beach house. He hated lobster. A burger was a huge treat. They dealt with mudslides, fires and waves crashing through the windows for decades. It was still paradise. We used to sit out at night and watch the stealth fighters practicing off point mugu. Actress Genevieve Bujold lived next door. She starred in Coma. Nice lady, but she screwed the pooch turning down a big role on Star Trek the Next Generation. Dick Clark lived down the beach about 500 feet (up on the hill). Used to see him and his wife strolling on the beach. He never looked sad. Malibu was a special place in the 80s and 90s but I am not sure how badly development and over population have ruined it. I know at one point getting anything built in Malibu was very hard.

I think we would still move their, even with the regular disasters. Pacific Palisades was nice. it had an old town feel to it, but I always preferred Malibu. But my opinion of Malibu is frozen in the 80s and 90s. Need to go back and have a look.

rodsky

Malibu has had some development, but its extremely difficult to do anything now. I have a small interest in a development and thats been in the works since 1988 (may be the last significant commercial one in Malibu while I'm alive)! Whole Foods is going in now and the Mart is new'ish. So its still pretty cool and largely unspoiled. Only difference is that its big $$ today.. I love Malibu but its very much a strip on the water and not really walking etc. You cant walk up and down PCH. Thats why i decide on Manhattan Beach.More walking, villagey etc. But busier than Malibu

robmypro

Archimedes

This. It's the people that really live here, that try to act like they don't, that get caught.

TRAKCAR

mchrono

Dont bet on any changes through the court system. In fact, the counterargument is that there should not even be the $10k deduction, because that amounts to a subsidy to the high tax states, and unfair to the low/no tax states. It's purely a political red/blue issue.

flsupraguy

Screw that, I'll let the communist people in Kali annex themselves from the rest of the States. Good riddance, ill spend my money elsewhere. Liberalism at its finest....

phow

I don't count on anything It just looks likely that it will get overturned. If it does, it will just be a welcome surprise when my tax bill is lower than expected. If not, that's fine too.

TRAKCAR