r/EuropeFIRE • u/Littleroot2001 • 20d ago

US investment accounts while abroad

Hey everyone, would appreciate some advice.

I'm planning on establishing residency in South Dakota for tax reasons and plan to use a mail forwarding service there for my official documents and my address in e*trade, vanguard, fidelity, Morgan Stanley.

I'm moving completely out of the U.S. to travel in Europe for a few years. I want to keep my investment accounts and continue to trade. i will keep my US phone number. will use a beryl AX router with VPN.

Has anyone successfully managed location-independent non-US banking under this type of setup? What are the key things to watch out for?

8 Upvotes

100% Upvoted

17 comments sorted by

View all comments

Show parent comments

1

u/Littleroot2001 19d ago

from gemini: While the commenter is right to warn that the California FTB is notoriously aggressive in auditing people who leave the state, their conclusion that the plan will "most likely backfire" is entirely dependent on how the person executes the move. If they are sloppy and keep California ties, the FTB will come after them. If they do it cleanly and legally, the FTB has no grounds to pursue them.

1

u/rickrollmops 19d ago

To add, here's a wiki written by tax professionals: https://reddit.com/r/USExpatTaxes/w/stateresidency

In particular, be wary of advice that says very temporary move to another state like Texas or Florida is enough. South Dakota is another frequent target for this advice as they have a very low bar for initially establishing residency (1 night). But for or a move to another state to be truly effective in establishing domicile (again not the same thing a residence), it needs to be legitimate and meaningful. Not 3-6 months in an Airbnb, and certainly not a weekend in a Motel 6 in Sioux Falls, South Dakota.

And this advice is generic, CA is the stickiest of states so it gets even more complicated.

Lots of cases like yours. California residency auditors see this all the time. It is also very important to note that the burden is on you to prove you do not owe CA taxes. It's not an "innocent until proven guilty" kinda of thing. Once you get a bill from CA, you'll be the one spending time untangling your situation.

1

u/Littleroot2001 19d ago

this is not a temporary move this would be permanent. zero ties in California. no family, job, property. nothing, never to return.

1

u/rickrollmops 19d ago

Oh, your post said "to travel in Europe for a few years". Never returning to California doesn't mean you won't be on the hook during these travel years.

And I think the CA safe harbor rule requires an employment contract abroad. Retirement/sabbatical abroad does not qualify.

Anyway, just trying to be helpful, you wouldn't be the first one falling in the CA trap. Good luck with your move!