Tax Advantages Of Florida Residency

Considering Florida Residency? It’s the time of year er than your spouse, New snowbirds flock to FloriYork imposes a tax on anyda seeking respite from thing over $1 million, and harsh winter weather. New Jersey, on anything Many will consider makover $675,000. These states ing Florida their legal rescould impose state estate idence. If you’re considtax even on the death of the ering such a move, there first spouse, despite the exare a number of financial istence of a credit shelter and legal factors to conset up to shelter $2 million sider. for federal tax purposes. Joseph S. Karp, Perhaps the most-toutFor example, a New Jersey C.E.L.A. ed advantage of living here resident who leaves $2 milis that Florida does not have a state lion in a credit shelter trust for the income tax. On the other hand, Floribenefit of his spouse would have no da does have an intangible tax. Anfederal estate tax, but would have a other advantage of Florida residency New Jersey estate tax on anything involves property taxes. If you own over $1,325,000. Florida residency a home here and declare it as homewould eliminate this problem. stead, your property tax assessment So what does it mean to be a Floriis automatically slashed by $25,000. da resident, and how do you prove More importantly, your home’s asit? First, you must reside in Florida sessed value cannot increase more for more than six months per year (althan 3% annually. though the six months need not be There may be disadvantages in continuous). And you must do it, not leaving your home state, though. If just say it. States have methods of you sell your home there, you may tracking where you reside, and if your end up forfeiting certain tax advanhome state determines that you are tages you enjoyed there. The timing not a true Florida resident, it may of when you sell your home is also end up taxing you as if you still lived important. Federal law provides a there. You may also want to consid$250,000 capital gains exclusion er doing a formal “declaration of domi($500,00 for a married couple) when cile” at the county property appraisselling a home that has been your prier’s office, changing your driver’s limary residence for two of the last five cense, registering to vote in Florida, years. Thus, if you relocate to Floriand officially changing your mailing da (or any state for that matter), you address. Joseph S. Karp is a nationally certified will need to sell the property in your and Florida Bar-certified elder law attorney home state within three years of re(C.E.L.A.) specializing in the practice of Trusts, locating in order to avoid paying more Estates and Elder Law. His offices are located at 2500 Quantum Lakes Drive, Boynton in capital gains taxes than necessary. Beach; 2875 PGA Blvd., Palm Beach GarFlorida has no estate tax. This is dens; and 1100 SW St. Lucie W. Blvd., Port particularly advantageous if you come St. Lucie. Call him at 561-752-4550 (Boynfrom a place like New York or New ton); 561-625-1100 (Palm Beach Gardens); or 772-343-8411 (Port St. Lucie). Toll-free Jersey. Here’s why: although the fedfrom anywhere: 800-893-9911. E-mail: KLF@ eral estate tax exclusion is $2 million Karplaw.com. or website www.karplaw.com for anything you leave to anyone oth-