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Author: LeftCoastJayhawk One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: of 121572  
Subject: CA state taxes and cruising lifestyle? Date: 2/10/2007 2:51 AM
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Well, as I continue to enjoy the sailing lessons I've started taking, I start dreaming of a lifestyle of live aboard cruising to distant shores. Lazy days at anchor off Bora Bora and all that.

So a cruising sailboat (or maybe a trawler yacht) becomes our permanent residence, with maybe only a few days each year spent in a California house, do we escape Californa income taxes on my corporate pension, stock sales (CA treats capital gains as ordinary income - at 9.3% ouch!), and Social Security?

Anyone know what the world sailor with a little used second home in California needs to do to legally avoid the clutches of the Franchise Tax Board? Would a PO box in Papeete be necessary? Could one still maintain a second home in El Segundo?

--Leftcoastjayhawk (who is still trying to figure how how to pay for such a yacht - reduced taxes would help - a little...:-)
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Author: bacon Three stars, 500 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 91979 of 121572
Subject: Re: CA state taxes and cruising lifestyle? Date: 2/10/2007 9:26 AM
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Anyone know what the world sailor with a little used second home in California needs to do to legally avoid the clutches of the Franchise Tax Board?

You could think about moving to/establishing residency in Florida, where income taxes are against the state constitution. They make up for that with higher sales taxes, but with you living--and so buying--elsewhere, that shouldn't impact you too much.

Eric Hines

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Author: vkg Big gold star, 5000 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 91980 of 121572
Subject: Re: CA state taxes and cruising lifestyle? Date: 2/10/2007 11:03 AM
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Why would you maintain a home if you are going to visit it a few days a year? You could stay at a very nice resort or rent a home for what property taxes and insurance will cost. You are also going to need to have it maintained.

You also need to not bring the yacht into the state for a number of months after purchase or your will be hit with sales tax. One large yacht had an unscheduled visit to CA because of bad weather and CA was pursuing the owner for use tax.

If you are looking for a place to retire to after your crusing days are over then you could rent it for the duration. I don't know how El Segundo is for vacation rentals. If the property was frequently rented, it might help with your claim that it isn't a primary residence. CA is very agressive regarding residency issues.

Debra

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Author: LeftCoastJayhawk One star, 50 posts Old School Fool Add to my Favorite Fools Ignore this person (you won't see their posts anymore) Number: 92291 of 121572
Subject: Re: CA state taxes and cruising lifestyle? Date: 2/19/2007 2:48 AM
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I don't actually live in El Segundo. It just had a sort of a poetic sound to it for the "second home in El Segundo" line. Or is that onomatopoeia?....

--Leftcoastjayhawk

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