4 ms·

CA FTB is hard to dodge even for capital gains. Basically, if you have ever lived in California for anything other than a "temporary or transitory purpose", you

by rmk 4y ago

CA FTB is hard to dodge even for capital gains. Basically, if you have ever lived in California for anything other than a "temporary or transitory purpose", you are at least a part-time resident, likely a resident. Ergo, you owe CA's silly taxes, including on Capital Gains, and CA's own version of AMT (and no, CA does not recognize many taxation agreements that are federally recognized!). Basically, if the FTB decides to throw the book at you, you are toast. https://www.ftb.ca.gov/forms/2020/2020-1031-publication.pdf https://www.ftb.ca.gov/forms/2020/2020-1031-publication.pdf

vmception 4y ago
Right. Anything that gets your AGI (adjusted gross income) low that year nullifies whatever California is looking for too. So expense everything because you're building something revenue producing and spending towards that, trade 1256 contracts more often instead of just random stocks/ETFs willynilly (ie. $SPX options instead of $SPY options, because you actually know what you're trading), tax loss harvest aggressively, borrow against assets to begin with, spend the borrowed or outside capital on the expensable things (you owe whoever you borrowed from - eventually - but not the government, and in some cases can deduct the interest as well). Spend more than you earned that year and you have no tax to pay, achievable via having savings or outside capital to spend. Boost up assets in tax deferred and tax exempt accounts, the usual. Its easy to stagger the tax events across years, such that there is always a counteracting force mitigating taxes during that current year. The government makes an incentive to transact in certain ways, the velocity of transactions is more important for the economy than taxes, when you fail to do that the government takes a cut of the remainder. (This is true of income and some other taxes, while other forms of taxes support very specific programs directly, and are much smaller)

by rmk 4y ago

vmception 4y ago

Right. Anything that gets your AGI (adjusted gross income) low that year nullifies whatever California is looking for too. So expense everything because you're building something revenue producing and spending towards that, trade 1256 contracts more often instead of just random stocks/ETFs willynilly (ie. $SPX options instead of $SPY options, because you actually know what you're trading), tax loss harvest aggressively, borrow against assets to begin with, spend the borrowed or outside capital on the expensable things (you owe whoever you borrowed from - eventually - but not the government, and in some cases can deduct the interest as well). Spend more than you earned that year and you have no tax to pay, achievable via having savings or outside capital to spend. Boost up assets in tax deferred and tax exempt accounts, the usual. Its easy to stagger the tax events across years, such that there is always a counteracting force mitigating taxes during that current year. The government makes an incentive to transact in certain ways, the velocity of transactions is more important for the economy than taxes, when you fail to do that the government takes a cut of the remainder. (This is true of income and some other taxes, while other forms of taxes support very specific programs directly, and are much smaller)