Discussion:NC or CA Resident

From TaxAlmanac, A Free Online Resource for Tax Professionals
Note: You are using this website at your own risk, subject to our Disclaimer and Website Use and Contribution Terms.

From TaxAlmanac

Jump to: navigation, search

Discussion Forum Index --> Advanced Tax Questions --> NC or CA Resident


Discussion Forum Index --> Tax Questions --> NC or CA Resident

Seaside CPA (talk|edits) said:

1 March 2012
Trying to determine if client would be a NC or CA resident. Thirty year old left NC in early 2010 to take classes at a prestigious art school in CA. Took classes in part of 2010 and part of 2011, then came back to NC. I had considered her a NC resident. She had no earned income in CA. All income was interest income (quite a bit of that). Just got a notice from CA that they think she needs to file & pay there. Anyone have any thoughts?

Janeboring (talk|edits) said:

1 March 2012
CA FTB Pub. 1031 says: Factors to consider are as follows:

• Amount of time you spend in California versus amount of time you spend outside California . • Location of your spouse/RDP and children . • Location of your principal residence . • State that issued your driver’s license . • State where your vehicles are registered . • State in which you maintain your professional licenses . • State in which you are registered to vote . • Location of the banks where you maintain accounts . • The origination point of your financial transactions . • Location of your medical professionals and other healthcare providers (doctors, dentists etc .), accountants, and attorneys

Also: For instance, students who are residents of California leaving this state to attend an out-of-state school do not automatically become nonresidents, nor do students who are nonresidents of California coming to this state to attend a California school automatically become residents . In these situations, individuals must determine their residency status based on their facts and circumstances (as described in Section G, Guidelines for Determining Residency, and Section H, Temporary or Transitory Purposes)

And: A resident is any individual who meets any of the following: • Present in California for other than a temporary or transitory purpose . • Domiciled in California, but outside California for a temporary or transitory purpose . (See “Meaning of Domicile’’ on page 9) . A nonresident is any individual who is not a resident

All that said, the FTB gets pretty nasty. You have two basic options for dealing with it. If, after the above, you still believe client is NR, then you can respond to the notice via a letter explaining the situation. Alternatively, you can file a CA NR return and back all the income out on SCH CA for 540NR. Whichever makes you more comfortable.

Ckenefick (talk|edits) said:

2 March 2012
I say F CA. I agree - NC resident.

Southparkcpa (talk|edits) said:

2 March 2012
For what it's worth....my broker dealer is in CA. I have never been there. My 1099 comes from a CA company.

I got an inquiry from CA.

Agree with above...F CA. They spend like drunk sailors and will tax anything that will stand still.

Seaside CPA (talk|edits) said:

2 March 2012
Thanks for the input everyone. Glad to know someone agrees with me. Think at this point I'm going to reply with a letter & see what happens.

Death&Taxes (talk|edits) said:

2 March 2012
It's there in writing that even Sacramento considers the student a non-resident. Probably filed his or her 2010 return with a California address?? Now let's hope he didn't vote there.

Seaside CPA (talk|edits) said:

2 March 2012
She lived in San Francisco while in CA. We filed her 2010 tax returns with a NC address, as she was already back in NC in March of 2011. This seems like such a waste of time right now to have to deal with this!

Bushmaster (talk|edits) said:

5 March 2012
Do not recommend writing F CA on the letter explaining this!!  :)

Seaside CPA (talk|edits) said:

5 March 2012
Yeah, I decided to leave that off of the first letter I send. Now if I have to send a second one, not so sure!

Ckenefick (talk|edits) said:

5 March 2012
I'd put it in there snidely. Usually, in the upper right-hand corner of the letter, I input: taxpayer's name, SSN, tax form and tax period. In your case, also add: "Internal File Number." Here, you can put "F CA." CA won't know what it's about. Then, when they call you, simply ask them to reference the "internal file number." When they say, "Ok, it's F CA." Then you say, you just F'd yourself...and hang up.

To join in on this discussion, you must first log in.
Personal tools