If my company gets bought out one day (public), can I move out of NYC to let's say Miami to avoid the state level capital gain tax (my stocks and options)? I did some quick searches and could save me 13% $ tax.Suppose the announcement goes out in October, I then change driver license, residence, notify my employer (a non-NY company) so that they no longer withhold NYC tax and everything else and move to FL to establish residency for the remaining of 2022. In early 2023, when the deal closes, I collect $ for my stocks, severance, and option gain and then stay in Miami for the whole year 2023. In 2024 I will file my tax return for 2023 and then either continue to stay in FL or move to CA or back to NYC.Is this legal or doable? Is there any risks being audited by NYC for the year of 2023 even if I have nothing with NYC that year? What if the deal is announced in early 2022 and close in the same year, then I guess this plan no longer works out, correct?Thank you!
Sep 19, 2022Sep 19, 2022
WSO Virtual Bootcamps See all
Popular Content See all
Career Advancement Opportunities
January 2023 Investment Banking
- Lazard Freres (+ +) 99.5%
- Jefferies & Company (▽01) 99.1%
- Lincoln International (▽01) 98.6%
- Financial Technology Partners (▽01) 98.1%
- William Blair (▲08) 97.7%
Overall Employee Satisfaction
January 2023 Investment Banking
- Canaccord Genuity (▲04) 99.5%
- William Blair (▲04) 99.0%
- Lincoln International (▲09) 98.6%
- Jefferies & Company (▲06) 98.1%
- Financial Technology Partners (▲09) 97.6%
Professional Growth Opportunities
January 2023 Investment Banking
- Lazard Freres (▲15) 99.5%
- Financial Technology Partners (▲09) 99.1%
- Lincoln International (= =) 98.6%
- Jefferies & Company (▽03) 98.1%
- William Blair (▲01) 97.7%
Total Avg Compensation
January 2023 Investment Banking
- Director/MD (6) $592
- Vice President (23) $401
- Associates (135) $262
- 3rd+ Year Analyst (9) $194
- 2nd Year Analyst (80) $172
- 1st Year Analyst (257) $171
- Intern/Summer Associate (42) $166
- Intern/Summer Analyst (185) $91
Career Resources
Leaderboard See all
| 1 |  | 99.2 |
| 2 |  | 99.0 |
| 3 | | 99.0 |
| 4 | | 99.0 |
| 5 |  | 99.0 |
| 6 | | 98.9 |
| 7 | | 98.9 |
| 8 | | 98.9 |
| 9 | | 98.9 |
| 10 |  | 98.9 |
Comments (22)
A great question like this goes unanswered, even though this is a finance forum and people should have experience with this. Instead, there's 100+ comments on a thread arguing whether or not paying for drinks on a first date makes you a simp. Off topic is basically 4chan now
While I somewhat agree with you, he's asking for complicated personal tax advice that should involve his personal accountant, not the "off topic" segment of a website.
Trust me - My accountant won't be more creative or useful than when come to the collective intelligence/resources this forum has. That is what I am trying to collect before I ask him. I just feel like many on this forum should know or heard a few dudes have done this type of things if they are M&A bankers or have exposure to clients like this.
This is a FINANCE forum. Not an estate planning/tax advice forum. Have you never heard the expression, finance makes the money, accounting keeps the money.
The irony of your comment.
-
- Learn more
- | Suggested Resource
Learn More300+ video lessons across 6 modeling courses taught by elite practitioners at the top investment banks and private equity funds -- Excel Modeling -- Financial Statement Modeling -- M&A Modeling -- LBO Modeling -- DCF and Valuation Modeling -- ALL INCLUDED + 2 Huge Bonuses.
Learn moreHaha thanks for your comment which might already hurt someone (who threw 💩at your comment)
If you MS me, that makes you a simp! A simp who pays for drinks on dates!
A lot of states have laws around this and in the instance they find out what you did, they will attempt to claw back taxes based on your past residency.
also, not a tax professional so you should get one.
You would obviously require professional tax advice if/when this situation arises, but fwiw, I know someone personally who did this. They established residency in Florida from a different state when they sold their business (in fact, they wished they had done it sooner). Also, "establishing residency" does not mean you have to literally live there the entire year-- I think it's just six months in most instances.
Thanks for the color! 6 months is a good point. 👍
You would need a year or two to plan this out. Change address, drivers license, file a final state tax form and mark it final.
If the company is under $50 million and have been in operation for 5 years, you may not have to pay cap gains under QSBS.
If there's enough money there to consider moving, it's with talking with an accountant.
NY is probably the most aggressive state now with residency audits.
If you are going to move back to NY, NY might still consider you a resident.
Thank you!
Check the # of days needed as a FL resident on an annual basis, I think that's the deal breaker of your question
Good point thanks!
try to ask on top-law-schools (forum). There are some tax enthusiasts over there
The short answer is no, or rather, the process of doing so is a lot more involved than what you are describing. You have to actively prove that you are not a NYC resident to avoid paying taxes; generally speaking, this means showing that you spent 183 days outside the city in any given year. Is one piece of mail going to your old NYC address? You're probably going to get taxed. And yes, maybe you can get a refund, but it's highly unlikely. In your given case, you certainly could not establish residency in Florida in 2022 - it would be assumed you are a NY resident for that year. And if that announcement goes out in October, you can bet your ass NY will take a bite.
Obviously talk to an accountant or tax lawyer, but generally speaking there is any easy rule of thumb with questions like this. If it's an obvious tax-avoidance strategy and you don't see tons of people doing it, you probably cannot either. New York City in particular is a commuter city, and tens if not hundreds of thousands of people come in from out of state every single day to earn a paycheck, and certainly from out of the city. They're going to be pretty sophisticated and aggressive about taxing you.
Thanks for the answer - I think I was trying to say the deal could close in 2023 (the cap gain is taxed when the stocks are sold not really when the deal is announced); but I will move to FL in 2022 and have zero income in NYC (since I don't work anymore) and nothing left there in NYC for the whole year of 2023 and I will never ever step into NY for a single second in calendar 2023. Hence I don't have to file to NY tax for the year of 2023. Or you are saying even all these above NY could still audit me for the year of 2023?
The exact determination would be complicated as others mentioned but the rough idea is summed up here in https://www.tax.ny.gov/pit/file/nonresident-faqs.htm. If the gains occur in 2022 or are determined to be New York State source income it seems you would definitely have to pay. If you permanently moved to Florida and meet the fairly strict criteria for changing your domicile to Florida you might be able to avoid state taxes on your 2023 non New York State source income.
Aut suscipit quod iure incidunt. Ea rerum nemo adipisci id quia eum molestiae. Quia voluptate suscipit esse veniam qui. Quod doloribus nobis quo nihil.
Non repudiandae neque ex quis quia facere velit. Aut vitae pariatur accusantium quisquam assumenda ex. Eveniet dicta cum aut ut praesentium exercitationem. Eaque amet est hic et non est eaque.
Autem sequi fugiat exercitationem sunt est blanditiis. Sit fugit distinctio ducimus et. Consequatur est et qui nihil. Et ipsum exercitationem consequuntur ut. Eum libero ut sed minima itaque odio voluptas reprehenderit.
Magni sed consequatur praesentium necessitatibus impedit veritatis hic. Modi sunt delectus omnis voluptatem. Ratione ab minima sint deserunt amet. Animi asperiores doloremque quis ea non aut sequi. Distinctio amet et a nemo. Quia est consequatur et. Qui deleniti aliquam est et placeat nostrum fugit architecto.
See All Comments - 100% Free
WSO depends on everyone being able to pitch in when they know something. Unlock with your email and get bonus: 6 financial modeling lessons free ($199 value)
or Unlock with your social account...
Autem non aut eum sed et cupiditate aliquam. Dolorem nihil aliquid molestiae ea in qui. Facilis tenetur assumenda accusantium in molestiae. Repudiandae dolor numquam voluptatem corporis sunt. Cumque officia ut voluptatem. Distinctio delectus numquam ea aliquid incidunt reiciendis tempora id.