2nd home in LA...will I be considered a CA resident ?

You will have to prove less than 50% of the time in California. Suggest that you don't get a California drivers license, or register a car here (for starters). I have had friends audited by California, and they have looked into credit card receipts... so maybe pay more cash when you are here. Also, have your house listed as a vacation rental (optically). Additionally, make sure that you keep your voter registration in Texas.

 

I would do some more homework on this.

I am pretty sure that CA starts pinging you after 3 Months.

 

I grew up and live in PV in case you have any questions about the area. I can tell you that Ca is a very aggressive taxing authority.

Public schools here are like private school with lots of parental control because parents directly fund many extras the PVUSD does not. That pork has become expected and needed which gives the parents power they have no where else.

 

I have friends that are in the same boat, but they moved away from California and the state is still trying to grab income. If they visit California or stay at their "2nd home", they don't fly commercial. They drive or take a private flight. Also, they have utility bills from California sent to their out of state home... changing the billing address. Just try to make it hard to prove that you spent a majority of the time in California. Also on their second home, they do not have it listed as a residence on their federal tax returns. It is an investment property and they take depreciation against it. You need a good tax guy.

 

Great advice. If it were me, I'd rent. Far cheaper in the long run. But if you insist on buying, use a Nevada LLC with a New Mexico managing member. You'll be glad you did.

 

welcome to communism at it's finest! You pay and you pay and you pay to be here. I'm trying to get out

 

Would you consider Florida instead ?

 

Simple. Gift money to your kid or whatever. Have them buy the house.


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Yes, annual registration is based on car value. Here is the DMV calculator for registration fees for out of state.

https://www.dmv.ca.gov/wasapp/FeeCalculatorWeb/newResidentForm.do

 

So, I owned a home in LA and another home in Nevada for at about 15 years. Most of the time I still paid CA income tax. For about 7 years I rented out the NV home and didn't spend any time there. But about 2 years before Covid hit I moved permanently to Nevada and started not paying CA income tax. I kept the home in LA.

And the State of CA came after me really hard several times claiming I owed them taxes and a ton of penalties. I had cars registered in both states and they used THAT as "proof" I lived in CA. "Why do you need a car registered in CA when you live in Nevada?"

They could see my mortgage in LA. Also I paid property tax in CA and the company I worked for was in CA. So they thought they had a cheater (I was not).

I did win eventually and they admitted I really lived in Nevada. How? When I moved I had my employer change my address and pay me in Nevada, not in CA. There was little they could do. I was working remotely and 100% legal (again before Covid so it was a bit unusual at the time). I officially moved to Nevada, got a driver's license, registered my car, and claimed my home in LA as my vacation home. I paid Federal taxes that way.

My recommendation is be really careful and correct to the tax laws. If they see anything suspicious they will hit you with penalties and confiscating of wages. They have a whole staff of people whose job this is to do -- find people and claim they cheated by moving out of state. If you have a PO Box instead of an address, that's a giant red flag for them.

 

There's a lot of info out there on this subject.

https://www.palmspringstaxandtrustlawyers.com/california-residency-audits-three-year-end-tasks-to-reduce-the-risk-for-nonresidents/
https://www.sambrotman.com/the-ultimate-guide-to-personal-income-tax-residency-in-california/how-to-survive-a-california-residency-audit/
https://moskowitzllp.com/preparing-for-a-california-residency-audit/

Put the house in a trust that doesn't have your name in it. Put all the utility, insurance, property tax and other bills in the name of the trust. Open a bank account for the trust in TX and pay the bills from that account. Don't use an LLC because they collect beneficial ownership info on the LLCs (but oddly not trusts) when you buy real property.

If you own a car in CA, use a New Mexico LLC to own and register the car with the CA DMV and insure it in the name of the LLC. You're going to want to insure the car in CA so that you don't get sideways with your insurance company. The problem is that CA has access to all the insurance data and they will get your name that way if you insure the car in your name. This is one of the top ways they look for cheaters.

If you buy anything from a foreign country and ship it to CA, do not use your name. CA collects data from US customs on imports over a dollar threshold so that they can charge a use tax to the recipient.

You basically want to avoid doing any transaction in your own name that will alert CA to your presence in the state. Surely, you're going to stay out of the state 183 days a year and not establish residency in CA. But you also do not want to get them curious by showing up in their data. There are so many pitfalls.

 

I own a second home in California. I'm not concerned about income tax at all, first because I definitely don't spend 50% of my days there (I do have a log), and secondly because even if I did, Oregon income tax rates are roughly the same, so it wouldn't matter. In fact, I think California's rates are slightly lower than Oregon.

Registering a car there is a different story, though. I initially registered a car that I bought down there, but after seeing how much it costs, I found it was easier and preferable to bring the car to Oregon, register it there, and bring it back to California.

 

I can’t really say for sure on if they audit the actual purchase price, but my neighbor stated the purchase price much much lower than what he paid. He was really good with photoshop. I purchased an out of state car about 2 years ago. When I registered, DMV required bill of sale. I guess it depends on the “documentation” you may have.