Moving from California to Nevada for Taxes, What Most People Miss

If you have been thinking about moving from California to Reno, Nevada, or maybe Sparks, Nevada, you have probably heard the same line a hundred times, Nevada has no state income tax. And you are not wrong to pay attention to that. For a lot of families I talk to, that tax difference is one of the first dominoes that starts the whole conversation, cost of living, home prices, quality of life, and the ability to keep more of what you earn.

Here is the part that trips people up, and it can trip you up in a very expensive way. Many folks assume it works like this, sell the California house, buy in Nevada, update your driver’s license, and you are done. Clean break, new life, no more California income taxes.

But what if California does not agree that you actually moved?

I know that sounds dramatic, but it happens, and it is exactly why I wanted to bring a CPA into the conversation in the video this transcript comes from. I am a Realtor in Reno, I can help you understand neighborhoods, pricing, commute patterns, schools, and what the day to day feels like here. What I cannot do, and will never pretend to do, is give you tax advice. What I can do is help you understand the real world issues people run into, so you can plan ahead and not stumble into a mess.

The Real Issue Is Not Your Address, It Is Your Intent

The biggest theme from the conversation with Tim Nelson, who is a CPA, was simple. This is not just about where you sleep sometimes, it is about intent, and whether your actions match the story you are telling.

California does not only look at one thing, like a Nevada driver’s license, or the fact that you bought a home in Reno. They look at a long list of factors and ask, does the preponderance of the evidence show that Nevada is truly your primary home. In plain English, it is a 51 percent rule. If most of the evidence still points back to California, you may lose that argument if they decide to question you.

Key takeaway: If you want Nevada to be your home for tax purposes, you need to move your life here, not just your mail.

What About the 183 Day Rule?

Everybody hears about 183 days. People bring it up like it is a magic password. Spend 183 days in Nevada, and you are safe. Real life is not that clean.

Days do matter, but days alone are not enough. In the transcript, Tim explains that if you buy a house, spend 183 days in Nevada, and do nothing else to show you truly moved, you are probably going to lose if California examines your residency claim.

Also, if you live up near Lake Tahoe and you pop over the state line for dinner in Tahoe City, that can count as a California day. It sounds petty, but when you are stacking up evidence on both sides, little things become big things.

How California Finds People in the First Place

One of the most eye opening parts of the conversation was how often residency exams start, not with someone reporting you, but with information that already exists.

California has information sharing agreements, including with the IRS. They can see documents that create a trail. A couple examples that came up:

• Mortgage interest statements (Form 1098) that still show a California address.
• W2 or 1099 income issued by a California company.

Now, having a California employer while living in Nevada is not automatically wrong. Plenty of people move to Reno and keep remote jobs. The problem is when you are straddling the line and your paperwork tells a different story than you do.

And yes, it can go deeper. In a formal examination, California can look at things like cell phone location pings and credit card charges, because those show where you actually live your day to day life.

Residency vs Domicile, The Confusing Part Most Families Skip

People throw around the words residency and domicile like they mean the same thing. They do not, and it matters.

Domicile is more like your permanent home base, the place you intend to return to and stay. Residency is often about where you are actually living and spending your time.

This gets complicated fast for anyone who has more than one home. Tim described a scenario with a wealthy couple who owned multiple homes in several states. Different driver’s licenses, different voting records, and time split across locations. That is not most people, but it shows you the point, you cannot fix this with one checkbox and a moving truck.

Key takeaway: If you own property in both California and Nevada, or your family situation is in transition, do not guess. Talk to a CPA early.

If You Want to Do This Right, Move Your Life, Not Just Your House

If you are planning a move to Reno, Nevada, here is the practical list Tim gave, and I agree with the spirit of it. It is about building a clean, believable paper trail that matches reality.

Actions that support Nevada residency

• Change your driver’s license, Nevada has a 90 day requirement in Northern Nevada.
• Register your vehicles in Nevada.
• Register to vote in Nevada, then actually vote here when elections come around.
• Move your professional relationships, for example your financial advisor, attorney, veterinarian, primary care doctor, dentist, and more.
• Attend appointments in Nevada and keep records.

One detail I thought was especially smart, use your debit card or credit card rather than paying cash for everything, because charges create location evidence over time. I am not telling you to live your life like a spreadsheet, but if California questions you two years later, you want proof you were actually here.

Documentation is everything, and it is easy to mess up

Most banks and credit card companies do not keep statements forever in a way that is easy to retrieve. Tim pointed out that audits can happen years later, and if you get a notice two years after the fact, it may be too late to pull all the supporting documents unless you were saving them.

Key takeaway: Treat your move like a documentation game for the first few years, especially the transition year.

The Transition Year Is Where People Get Burned

In my experience helping people relocate, the transition year is also the year when you are the busiest. You are packing, coordinating escrow timelines, trying to figure out schools, maybe starting a new job, maybe renovating the new place. Taxes are usually the last thing anyone wants to talk about.

But the first year you move matters a lot, because California has a part year resident and nonresident return that gets very specific. It asks whether you still own property in California, and it asks for the number of days you spent in California.

It can even separate day counts between spouses, with one column for each person. So if one spouse moved first and the other stayed behind for school, work, or to sell the home, that detail can show up in the filing.

This is why I encourage people to start talking to the right professionals early. If you want to know where to buy, what areas fit your lifestyle, and what different parts of town feel like, that is my lane. You can start by browsing the areas we cover here, https://thelessingerteam.com/neighborhoods. If you want to make sure your move is clean from a residency standpoint, you want a CPA involved sooner than later.

Owning a Home in California After You Move, Red Flag or Totally Fine?

This one comes up constantly.

A lot of families moving to Reno keep a California house at first. Sometimes it is emotional, sometimes it is practical, sometimes they are not sure they will like the winters, and sometimes they simply cannot stomach the idea of selling and trying to buy back into California later with property tax rules being what they are.

Keeping the home is not automatically a deal breaker, but it is a factor. If the California home looks and acts like your primary residence, that is a problem. If it is clearly a rental with tenants and a property manager, that supports your claim that you moved.

Also, owning California property can create California source income, and that can trigger a California filing requirement even if you live in Nevada.

California Source Income, Even as a Nevada Resident

This is the part a lot of people do not understand. You can be a legitimate Nevada resident and still owe California tax on California source income.

Examples that came up in the conversation:

• Rental income from California property, even if it is offset by depreciation and the rental shows a loss.
• Wages tied to services that California considers performed for the benefit of a California client.
• Stock options, RSUs, or long term incentive compensation earned during years you worked in California.

Tim mentioned that California no longer chases many people for pension income, including California state pensions, because California kept losing those cases. That is good news for retirees. But stock based compensation is different, especially if it was earned during your California employment period.

Also, employers sometimes report income a certain way by default, for example showing it as California source on a W2, which can create an issue you have to clean up. This is a good example of why working with a CPA who knows how to handle multi state issues can save you a ton of stress.

Business Owners, Nexus Is the Word You Need to Know

If you are moving a business from California to Nevada, the conversation gets even more detailed. In the transcript, Tim brought up California’s three factor test to determine whether you have nexus, meaning you are considered to be doing business in California.

Those three factors are:

• Sales into California or for the benefit of California customers.
• Payroll in California.
• Property in California, including potentially rented space.

Even if you move your operations to Reno, Nevada and you have no payroll or property left in California, sales alone can keep you connected to California from a tax perspective.

There was also a very practical point about contracts. If you sell a product into California, where does the sale legally take place. Contract terms about when the customer takes ownership, and who bears the risk if the item is lost or damaged in shipping, can influence whether it is treated as a Nevada sale or a California sale.

Key takeaway: If you are relocating a business, this is not a DIY situation. Get advice early, because the details matter.

A Quick Story That Shows How Weird This Can Get

One of the wildest stories Tim shared was about a Nevada resident who had a vacation property in California, with a mortgage. They received notices from California and ignored them, because they assumed it was obviously just a vacation place and they did not have California income.

California eventually sent a tax bill for $20, 000.

How did they come up with that number? The state presumed that if you can pay a mortgage, your income must be six times your mortgage interest. They multiplied the mortgage interest by six, calculated tax on that estimate, and sent the bill.

That is not meant to scare you, it is meant to highlight a very practical lesson. Do not ignore notices, even if you are convinced they are wrong. Get help and respond correctly.

Practical Timeline, When to Start Planning

If you ask me when to start planning the move, my answer is always, earlier than you think.

From the tax side, Tim’s point was that people often call after they arrive, and by then they might have already made choices that complicate the first year. Humans procrastinate, and moving is chaotic. I get it.

If you are considering a move to Reno, Nevada or Sparks, Nevada for tax reasons, it is smart to start conversations 60 to 90 days before the move, or even earlier if you have a business, stock compensation, multiple properties, or a split household situation.

If you want to talk through the housing side, neighborhoods, price points, commute, lifestyle, and what areas match your goals, reach out to us. If you want to binge real life local content on everything from weather to where people actually live, check out the channel.

Conclusion, Make the Move Correctly So You Can Actually Enjoy Nevada

The goal is not to move to Nevada and spend the next few years looking over your shoulder, wondering if you did something wrong. The goal is to move your life to Reno, Nevada, do it cleanly, and then enjoy what you came here for, more breathing room financially, great access to the outdoors, and a community that is still one of the best kept secrets in the West.

Key takeaways to remember: California residency questions are about intent, evidence, and documentation. The transition year matters a lot. California source income can still create filing and tax obligations even after you become a Nevada resident. If you have any complexity, business, multiple homes, stock compensation, do not wing it.

When you are ready, keep learning here, explore other posts. I have a whole library of Reno and Northern Nevada guides to help you make smart decisions before you pack a single box.

Transcript

One of the biggest reasons people movefrom California to Nevada is the difference in state income taxes. Andhere's what I think a lot of people assume. They sell their house inCalifornia, they buy a house here in Nevada, they change their driver'slicense, and they figure they're done paying California income taxes andthey're all set. But what if California doesn't actually agree that you actuallymoved? We recently did a video about a situation where the state of Californiawent after someone for $30, 000 in taxes after they'd already moved. And thatvideo got a lot of attention and it even started to raise some bigger questionsthat we want to answer today. So, if you're actually planning to leaveCalifornia and move to Nevada, what do you need to know to make sure thatyou're doing it correctly? So, today I brought on Tim Nelson. Tim Nelson is aCPA. He's also my CPA to help us walk through this problem because I wasgetting a lot of questions that again, I'm not a CPA and I want to make surewe're answering properly for you. A lot of these questions we wanted to ask andwe talked about them before, but I wanted to get the expert opinion becauseagain, I'm the realtor and you're not. So, any>> Yes. Yes. What do people actually need to know like when they get this processstarted? Cuz they think I just move here, I get a license, I get a house andI'm done. And that's not necessarily the case.>> It really comes down to intent. You have to want to move here. You have to intendthat Nevada is going to be your primary residence. And there's a laundry listthat you can do. People talk a lot about the 183 days, right? Am I in Nevada? 183days. Yes. With the intent that you're going to be here. They want you toregister your driver's licenses here. So that's a 90-day requirement here inNorthern Nevada. They want you to register to vote. They want you toregister your vehicles. Professionals are a huge thing in terms of intent. Sogetting your financial provisor here, we get a lot of referrals from estateplanning attorneys where they're trying to decant their trust from a Californiatrust to a Nevada trust. We get a lot of referrals from uh financial adviserssbecause the financial adviserss one case I won about 8 years ago for Californiaresidency. The tipping factor was they hired a veterinarian on this side of theborder, >> right? And so so those some of thethings we're going to get into some of this nitty-gritty and some specifics, but like some of the questions that I was starting to get from people werethings like what might California look into cuz like for example I know a lotof people that they move here, part of why they move here is cuz their familyis so close to California or their job is still working for a company inCalifornia, but they moved here because they're remote workers and they can kindof do whatever they want to do. Are there certain things like that just jumpout that are like big red flags that they're like you just you need to not dothis? >> Yep. So, California starts where it canget information. California has an information sharing agreement with theIRS. And so, if you have a 1098, which is a mortgage interest statement, withan address in California, that's one of the things they look at. Okay? If youhave a W2 or a 1099 from a California company, that's one of the things theylook at. So, the initiation of an California examination for residencypurposes often starts with the information that they can get available.And so if you're straddling that line, if you have a vehicle registered inNevada, but you have a W2 from California or a 1099 from California, then they're like, "All right, there's some funny business here that maybe weought to look at a little bit closer." >> Well, I've even heard of this going asfar as they'll check where your cell phone pings are happening and how howmuch time are you really spending in one place versus the other>> in an examination? Because they actually have to have uh some uh reason to go getthat information in an examination if they're doing a residency examination.Yep. cell phone pings, credit card charges, where are you charging stuff?In one case, uh I think I told you offline before we did this, whatever, there's a a gentleman from Southern California to Vegas, and they wereinterviewing the garbage men to see if he threw away as much garbage uh as hisneighbors did, right? >> Because is he really living there?>> Isn't it crazy this kind of depth that they'll go into ask some of that stuff?So, some of the questions I got, one was what's the difference between residencyand doicile? So you get to choose your doicile and then they consider that yourtax but your residency may not be the same as your doicile. Residency again, where do you where do you intend to make your primary residence? Where are youdoing that? Whatever. I actually had this conversation about 3 months agowith uh people that uh are wealthy enough that they own four differenthomes. One in Pennsylvania, one in Southern California, Los Gatos, uh onehere, one in Puerto Rico. And I said, "All right, how many days do you spendin each of those places? Where do you have your driver's license? Her driver'slicense is in Puerto Rico. His is in North Carolina. Where did you vote? Theyboth did noted voted in North Carolina, but they have these residences. And sotrying to determine residency, trying versus their doicile is is complicated.It can be very challenging for people. And so that's something where I alwaystell people if you're making a big move and you're thinking about the reasonyou're leaving California to Nevada is strictly usually a lot of people raisetheir hand. and it's because they know we have no income taxes and there'sother tax reasons, but they need to think about this and plan this out easybecause again question I get or something that people just assume isgreat if I sleep 183 days in a house in Nevada and I'm a Nevada and I can do allmy tax things and all that and it's not it's not that simple>> and if you do nothing else California uses what's called the prepundonderanceof the evidence rule. So 51% of the factors have to lean that you'veintended and are and and are evidencing the fact that Nevada is your residence.So, if you just buy a house and spend 183 and do nothing else, you're probablygoing to lose that examination, >> which would make sense because I I knowthat's one where I tell people, don't just go based upon that whole situation.So, now that we know for sure, just because you say you're living here orsleeping here, whatever the case may be, and it's not as simple as just getting alicense in a house, let's say I lived in California and they reached out to meand I have them talk to you and say, "Okay, what should I be doing to preparemaybe the 30 or 60 days before I go or once I get here? What would be some ofthe suggestions, things that we want them to think about or even start to doin order to make them do this correctly? >> If you're buying a doicile, if you'rebuying a house over on this side of the border, make sure that you go get yourlicense changed. Make sure that you go register your cars. Make sure that youregister to vote. We got the elections coming up here pretty soon, whatever itis. But make sure that that's all changed. Start to do the things whereyou're finding a primary care physician or a dermatologist or a dentist.Actually make those and attend those appointments and literally just keeptrack of all this. really keep records of all this>> a documentation game. Yes, absolutely. >> So, the more that they can document thatthey're actually not just saying they have an address here, but the morethey're actually showing that they're living here, instead of paying cash atthe grocery store, use your debit card, like just to prove things that you areactually here. If you live in California three months and you live here 9 monthsor if you live in California 9 months and you live here three months thendocumenting all of that stuff and keeping that to make sure that if youget looked at then you have evidence of your bank statements of your, you know, financial advisory statements of your uh EOBS a lot more stuff than you normallywould keep for a regular income tax return. I get people that are movinghere and a lot of times they'll keep their house in California and buyanother house here. So now you've got the two properties. Part of why somepeople will do that is if they decide they don't like it here and they want togo back really difficult to be able to go back and buy something else becauseof property taxes and other things on those lines. So when they're doing thator for example like you said some people move here and their company that theywork for is in California and now they're living in Nevada but theirincome is being earned in California. Are some of these things that they needto be kind of cognizant of? Again if youhave a house in both places it's onething if I can prove it's a rental there's renters. I got a propertymanager versus I had a primary residence there. Now, I bought a primary residencehere. Maybe my spouse stayed behind for six or 12 months because I first movedfor a job. Like, there's all these little inquiries like they want tofinish the school year or whatever it might be. What are some of those kind ofred flags or things that they need to sort of maybe talk to someone likeyourself and and do properly? >> That transition year, super superimportant. California non-resident and part-year resident tax return has asection there that says, "Hey, do I still own a home or other property inCalifornia?" So, you have to actuallymark the box that you do and then listthe number of days that you actually spent in California. If people arebuying up at the lake, let's say they're on the incline side, you know, on theNevada side, whatever it is, but they drive over for dinner to Tahoe City, that counts as a California day. And so, it could be mean the difference ofwhether or not you if you get looked at, but more importantly, now you have thatCalifornia house and if it still has a mortgage on it, whatever, California hasinformation that says, "Hey, I said I moved away. I'm I said I'm a Nevadaresident." Again, that section of the tax form says, not only did you leaveCalifornia, but which state did you go to? So, hey, I'm a Nevada state now. I Iwas in Nevada for, you know, uh, 210 days. I was in California for 150 days.You put that on that party year tax return the very first year that youtrans. >> And if you're filing taxes with apartner, then obviously if one of you is in one state and one of you in the Imean, you have to say like I might have been in Nevada 200 days and andCalifornia 150, but the other personmight have been flip-flop. Do they getthat specific with that? >> Exactly. Correct. So there's a columnfor you and there's a column for your significant other and it says how manydays did you spend, how many days did they spend, do you own a home, do theyown a home or other property. So they get that very specific on that thatCalifornia partear and non-resident tax return.>> So do they end up then having to someways file in both states?>> So same thing I can be a resident of Nevada, you could be a resident ofCalifornia and California basically has the partear resident says they startfrom your federal income tax return. Hey, how much federal income tax did youreport anywhere worldwide? >> Oh, wow. Okay. They modify it forCalifornia law cuz some things are taxable in California that wouldn't beon your federal tax return. And then the very far right column is what's yourCalifornia source income and that's what they'll tax you on. So your spouse couldhave a W2 in California and be taxed on your California source income. Yourincome could be 100% Nevada. So therefore, not taxed to California.>> And it's funny you say that cuz that was going to be the next thing where we weretalking about where your income is coming from. I see this like in sportsin athletes where if you play uh and you work play for one team and you pay likewherever the game happened to be you pay tax in those states. So for someone wholet's say they did all the right things they sold their house in California theyhave nothing left in California and they moved to Nevada but because theircompany's in in California or maybe they're getting bonuses or they'reearning you know whatever stock stock portfol like they're gearing things fromtheir company that's in so it's like California source income. Does thataffect them as far as California taxes, even though now they're they're they can100% prove they're not a California resident anymore.>> So, you're absolutely right where you earn that income. Let's say you had thatyou turned the old house into a rental. Well, you'll forever have to file aCalifornia tax return because that's California source income. You may nothave to pay tax. Let's say depreciation results that to a loss. California says, "Great, you don't report." Then we're going to presume that uh you didn't haveto do that. But you have to to file a California tax return even if you have arental loss. If you have a W2 job, where are you performing those services?Right? California has a special rule for service- based income. Whether you'reself-employed or whether you'rewage-based is who gets the benefit ofthose services. So, if I prepare a tax return for a California resident, andthe California resident benefits from that California says, Tim, that's aCalifornia sale for the tax preparation of that tax return.>> And do you see I mean, because obviously I know you do taxes for people allaround the country.>> Do you end up having to pay taxes inmultiple states because of that reason? So California, New York, New Jersey, they have high tax rates. They're looking for as much revenue as theypossibly can. So California, New York are the only two states that I'mspecifically aware of that says the tax benefit rule. Who does the preparationof those services benefit? If you're aconsultant and benefit somebody inCalifornia, California takes a position. That's a California sale.>> Obviously, a lot of people move to Nevada for retirement reasons. But let'ssay you were a state of California employee for your whole career and nowyou're getting pension money, retirement income, those kind of things or even notthat it's specific to California, buteven like federal money where, you know, social security and things like that. People are moving to some of these noincome tax states cuz it's just better to retire in there. I know Nevada alwaysends up on a top 10 list of best states to retire in. And depending on how yourank it, I've seen this as high as two and as low as 10. But when you'resomeone who lived in California, workedyour whole career in California, and nowyou're bailing California cuz you don't want to pay those taxes anymore. How dotheir retirements and pensions and those kind of things work for them?>> California chased people for years. This was probably 30 years ago that they werereally going after court cases saying, "Hey, you earned this money over 40years in California and then you movedto Washington State, right?>> Uh we're going to still charge you California tax cuz you earned that moneyin 40 years." And they kept on losing losing losing. So on actual retirement, including California state pensions, California doesn't chase you anymore forpension income. >> Okay, >> that's not true for things like stockoptions, RSUs. Those were earned duringthe time that you were a California employee. Therefore, California willchase you for those things as well. >> And do you see like a lot of people thatyou do taxes that were Californians that now live here in Nevada, do you seeCalifornia coming after a lot of these people?>> Yes. And more importantly, theCalifornia employer who then issuesthose stock options or those RSUs or that long-term incentive plan willactually put it on uh W2 as California source income. And so then again, information reporting, California, it was it's supposed to be Californiataxable. >> And I would imagine if you don't reportproperly that at some point this justbecomes a worse problem for you ratherthan just doing it the right way from the get- go.>> That's correct. There's a lot of communication that I go back to thepeople and say, "Hey, they reported it this way. It should have been reportedthis other way. Please ask the person that issued your 1099 to say it's notCalifornia source." You know, change itthat you were uh remote working entirelyhere. Your butt was on this side of the border the entire time.>> How much different is that tax year, the first year when it's a partial yearversus, let's say, they did get they don't own anything in California. Theirjob isn't even in California anymore. Everything's in Nevada and now they'rethat second year when they're juststraight Neadans. Is it a hugedifference in filing their taxes that first year where it's a split yearversus the full full year? >> It is California and Nevada arecommunity property states determining what was earned the let's say it's uh 5months in California, 7 months in Nevada. So that first 5 months, everything you earned worldwide is taxable to California.>> Okay? >> And then when you move to Nevada andlet's say that you meet all the other requirements for being a Nevadaresident, then only that California source income. So determining the numberof days, determining exactly what was earned when, when did you sell yourhouse, is that capital gain taxable? Isit taxable to California? Is it nottaxable to California? All of that kind of stuff. 1031 your rental properties.Let's say you want it completely out of California and your 1031 your Californiarental properties. They're going to track that forever. So you have aCalifornia filing requirement to let them know that you haven't sold thereplacement property on the Nevada side.>> Oh wow. So they're they're reallysomebody paying attention to all this stuff as far as the long term goes.Okay. So, when it comes to all your personal stuff like that, I always sayyou're best off to talk to your CPA in California. Make sure you can find a newCPA here in Nevada and make sure you have those conversations because I knowinitially that's why a lot of people raise their hand and put Nevada on themap is for tax reasons for sure. >> Then they come visit then they realizethere's a whole lot of laundry list of things is why it's great to live hereand we do a million videos about that stuff. But if someone is actually and Iget this call quite a bit lately now is relocating their business. So you getthese business things and then of coursein the last video we talked about thingslike the franchise tax board and other things like that where I don't knowbetween that and the state and other things when they're relocating abusiness. I mean I imagine there's going to be a million more questions and we'dhave to go case by case because they might relocate a business here and takethe whole business and they leaveCalifornia or you might now have a splitbusiness. There's a lot of different ways this could work but what would bejust some entrylevel basic things starting point for them. So thenobviously it's going to be a case by case basis. California has a threefactor test to determine whether or not you have nexus in the state, whetheryou're doing business in the state. So the three factors are the number ofsales that you have in California or for the benefit of California, the amount ofpayroll that you have in the state, >> and the amount of property includingpotential rented space in the state. >> Oh wow. Okay.>> A lot of businesses that move here may not have payroll any longer in thestate. They may not have any propertyleft, any business property left in thestate, but they certainly have sales. So a product company gets down to thenitty-gritty. So if I'm selling widgets into California and I'm mailing themtakes the position, where did the sale actually take place? So it can come downto the say what does my contract say, right? So I'm selling you this cellphone. Uh it says, hey, if my contract says that the point of sale is Reno, Nevada, and if it gets lost, missing, damaged in the mail, that's on you, thenthat's a Nevada sale. >> Okay? If in fact I sell you that cellphone and if it gets lost, damaged, missing before it gets to you and it'sin your hot little hands, then the point of sale happened at your location, that's a California sale.>> Okay. So, if you're someone who'sthinking about moving to another Nevada, do me a favor. Click the link in thedescription below and get you a copy of our free buyer guide. That'll get you alot of great information to start your journey off right. What are the biggestmistakes you see people make? That's one of the things we had on our top fivelist that would cause them to to all ofa sudden undo all the hard work they'retrying to do to now disprove that they were actually a resident.>> Lazair, not paying attention, not doing anything. A lot of people now are soelectronic that they don't keep their statements, that kind of thing. So mostbanks, most credit card statements will keep you for about 18 months, whateverit is. Well, an audit can happen onaverage uh as late as threeear statuteof limitations, unless they think there's something funny going on. Theycan stretch it out. But if you get that audit notice 2 years late, it's too lateto go get those credit card statements. It's too late to go get those bankstatements. >> Yeah. I mean, I I I've been doing my ownbookkeeping. You know, you guys do thatfor us and and getting my statements tothem every month. It's it's important to track all those things. And I know forme, one of the things I always talk about with any of these type of moves isI love when they get a hold of me way too early. And I think in this case, ifthis is important for somebody and we're talking about big numbers, when and howsoon should they start having this conversation with you? 60 days, maybe 90days before they start uh coming. Certainly if they're already here, ifthey're already in the soup, if they're the frog in the pot of water, whateverit is, and the heat's getting turned up, whatever it is, soon thereafter as theyget over here, but it's usually they don't think about it until they're here.Uh, and so we get it from the realtors, we get it from the financial advisors, we get it from the estate planning attorneys that says, "You better startmaking sure that you've got all your ducks in a row.">> And do you see people being proactive with this? Are you seeing more peoplelike by the time you get to them? It's almost the year that they were hoping toaccomplish this get screwed up and nowthey're like, "Well, we can fix it fornext year, but for this year, you've already kind of screwed yourself up.">> I mean, humans are are wonderful procrastinators. Like, we live in that.And so, so many people are there. What happens is when you're moving, there's alot going on in your world, right? You got to pick up your old life, you got toget your new life. There's a lot of stuff going on. And taxes generallypeople don't think about more often than not in advance. And so they get here andthey go, "Oh crap, I better, you know, what can I need to do?" You know, and sothey come over here, whatever it is, and then they start getting information. Youyou don't lose anything as long as you're doing that. Yeah. But knowingwhat the rules are and then abiding bythem is so key. And I always think toolike even if they were to book an appointment, spend a couple hours ofyour time, pay pay for the fee, whatever it is the hourly rate is, it's worthdoing it because in the long haul, it's going to save you a lot of time andenergy and effort and hopefully tax savings that the amount that they payyou for a couple hours of your time.Whether it's a phone call, a Zoommeeting, or they happen to be here and you meet them in person, it just makesit makes sense for them to do this. >> Yeah. Super super practical. Thousandbucks at about a 9% California tax rate. >> Yeah.>> Uh N grand a year. >> Save it pretty quickly. Last questionthen, and this is when we get more on the business side or who's actuallytracking these things because I get people asking about the franchise taxboard or the state of California, like who are the ones that are actually sortof, for lack of a better description, chasing them down or doing the researchto try to say, "We're California. We want our money." Who are they trying tomake sure that they can prove theirpoint to?>> So, the California Franchise Tax Board had franchise agents. They'll start withanformational thing. So, you won't even know you're getting looked at as theystart to see what public information is out there. They have access to thecounty assessor's records. where do you have homes? Uh where do you haveproperties? That kind of thing. They have access the information sharingagreement so they can get all of your IRS information. And so they do that.They kind of build the case and then all of a sudden you find out uh kind of whenthey decided that this is something worth going after. That's when you getthe first notice and says, "Hey, can you just prove to me and it's it's Columbbo, right? They're not telling you you'rewrong. They're asking the question. Hey, were you required to file a tax return in 2024 or 2025? you know, were yourequired to uh do any of this kind of stuff, whatever? And then at that point, uh they've got that stuff. >> If I see stuff like this, I'mimmediately calling you. I'm calling like I have rental property other partsof the country, so I'm starting to reachout to my contacts cuz I don't alwaysknow the best way to respond to this stuff. Is that what you think theyshould do is just reach out to you or their person?>> That's exactly right. Yep. Yeah. So, uh I'll give you a very specific example.We have a person that's a Nevada resident happened to have a vacationproperty in um just outside of Truckuckyand they have a mortgage on thatproperty. They got the first notice and they go, "Ah, it's a vacation home. Weknow it's not a California. We don't have any California income." And theyignored it. The second one came around. They ignored it.>> Yeah. >> The third one came around. It was a taxbill for 20, 000 bucks.>> And they ignored it.>> So they finally came to me and they said, "Hey, I got a $20, 000 tax bill.Whiskey Tango Fox. California has this wonderful chat feature." So I got arevenue agent over there, got in the chat feature, and I said, "How did youcome up with only mortgage interest? How did you come up with a $20, 000 taxbill?" They said, "We presume thatthey've been able to make make theirmortgage payments, afford their mortgage. Their income must be six timestheir mortgage interest." And they took their mortgage interest, multipliedtimes six, calculated California tax on that and sent them a bill.>> So, they just randomly just use a super raw calculation and off they went.>> I said, "Listen, do I file a zero taxreturn for California?" They go, "No, wewould presume that's fraud." >> I said, "Okay, so they are Nevadaresidents. They have no California tax filing obligation. How do I resolve thisfor these people that they don't have to pay this $20, 000 tax? And they said, asyour authorized representative, you sign that tax power of attorney. I'll acceptyour word. I said, you won't accept aCalifornia tax return that signed underpenalties of perjury, but you have my word.>> Verbal word. Wow. And it went away. >> That is correct.>> Sometimes they're just fishing. >> Well, and that's the thing, and that'swhy you always want to be careful how you respond to these type of situationsbecause you never know if they are just fishing or if they're not. So, with thatbeing said, hopefully this helped give people a little more big picture view.But if they do have specific questions or if you're someone who's thinkingabout this, reach out to us. I can put you in touch with Tim. We have othercontacts for things for things that maybe we don't even know. So, as always, Tim, I really appreciate you coming on.>> My pleasure. It's always great.>> I think the biggest thing I hope people take away from today's conversation isthat moving from California to Nevada isn't just about changing your address.You're moving your entire life. I can help you figure out where you want tolive, which neighborhoods you want to be in, what makes sense for you as far asall that goes, and what a home and pricepoints look like in Northern Nevada. Butwhen it comes to establishing your residency and understanding your taxes, that's where you want someone like Tim involved. Earlier that you can get thisprocess started, get those conversations going, the better. Because your goalshouldn't be to just move to Nevada and spend the next several years worryingabout whether you did something wrong.It should be about making that movecorrectly [music] and understanding your obligations and getting on enjoying yourlife here in Northern Nevada. So, if you're someone who's thinking aboutmoving from California to Nevada and you have more questions about all this, check out this video we did right