Client living in Mexico
I have a client with dual citizenship in Mexico and the U.S. He will be pulling money out of his IRA starting next year, and currently has a P.O. Box in California. My questions are:
1) If he stays in Mexico, what are the tax ramifications?
2) Should he move to Nevada, how soon should he do it to prove domicile and avoid California state tax?
3) Could he move the P.O. Box to Nevada and stay in Mexico to avoid California state income tax?
Permalink Submitted by Alan - IRA critic on Thu, 2019-07-18 15:14
Having a PO Box is only one indicator of domicile. Client needs to establish domicile using several factors such as vehicle registration, voting registration, location of bank accounts, etc. CA is known to be aggressive if there is any indication that CA was the state of domicile as of the date of any distribution, so terminating the CA PO should be considered. There may also be federal implications regarding mandatory withholding if a distribution is made out of the US.
Permalink Submitted by Bruce Steiner on Fri, 2019-07-19 16:50