Tax Strategy
Nevada Capital Gains Tax Advantage — What California Homeowners Save
California's top rate is 13.3%. Nevada's is 0%. For California homeowners earning $200K+, this difference represents tens of thousands annually. Over five years, the cumulative savings can exceed $100K. But it requires proper planning.
Important Disclosure: This article is for educational purposes only. It does not constitute tax, legal, or financial advice. All figures are illustrative estimates. Consult a qualified CPA and attorney before making any decisions about residency changes, property sales, or tax strategies. Every situation is unique.
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Authority Statement
“We focus on the real estate side — finding you the right home in Nevada — and coordinate with your tax and legal team on residency planning. The tax savings are real, but the process must be done correctly.”
The tax advantage is substantial — but not automatic. Establishing Nevada residency requires deliberate steps. California's Franchise Tax Board actively audits taxpayers who claim to have left. Getting this wrong costs more than you saved.
Table of Contents
The Numbers
California vs Nevada Income Tax
California's income tax is progressive, with rates from 1% to 13.3%. For households above $200K, the effective state tax is substantial. Nevada has no equivalent at any income level.
Estimated figures assume married filing jointly with standard deductions. Actual tax liability depends on filing status, deductions, credits, income sources, and current tax law. Consult your CPA.
Long-Term Impact
5-Year Estimated Savings Illustration
For a household earning $250K/year, the cumulative impact of moving from California to Nevada is substantial.
$91,000 Estimated Savings
Annual CA Tax
~$18,200
Annual NV Tax
$0
5-Year Delta
~$91,000
$110K–$120K Estimated
Income Tax (5yr)
~$91,000
Property Tax (5yr)
$20,000–$30,000
Total Estimated
$110,000–$120,000
The Process
How Establishing Nevada Residency Works
Moving to Nevada is not enough. You must establish domicile — your permanent, primary home with intent to remain. California presumes you are still a resident until you demonstrate otherwise.
Purchase or lease Nevada primary residence
This becomes your permanent home where you spend the most nights per year.
Obtain Nevada driver's license
Surrender your California license within 30 days of establishing residency.
Register to vote in Nevada
Cancel California voter registration and register in your Nevada county.
Update vehicle registration
Register all vehicles in Nevada within 30 days.
Change mailing address on all accounts
Banks, credit cards, insurance, subscriptions — all should reflect Nevada.
Establish Nevada professionals
Dentist, doctor, CPA, attorney, bank branch — these 'closer connection' factors matter in audits.
Spend 183+ days in Nevada
Track your days carefully. The FTB uses data matching to verify claims.
Home Sale Timing
Capital Gains on Home Sale: What Applies
When you sell your California home, capital gains taxes apply on profit above your cost basis, minus the primary residence exclusion. Timing your residency change matters.
Primary Residence Exclusion
$250K (single) or $500K (married) exclusion if you owned and lived in the home as primary residence for 2 of the last 5 years.
State Capital Gains
If you sell while still a CA resident (or within the departure year), California taxes gains above the exclusion at your marginal state rate — up to 13.3%.
Timing matters: If you establish Nevada residency before selling the California property, the state capital gains component may be reduced or eliminated. However, California may still claim a portion if you were a resident for part of the tax year. This is where CPA guidance is essential.
Risk Factors
Common FTB Audit Triggers
California's Franchise Tax Board has a dedicated residency audit unit. They actively look for high-income taxpayers who claim to have left but maintain significant ties.
Keeping a California home you use frequently
If you maintain a home in CA and spend significant time there, the FTB may argue it is still your domicile.
Children in California schools
If your kids still attend school in California, this is strong evidence of continued CA domicile.
California-based professionals
If your primary doctor, dentist, attorney, and accountant are all in CA, the FTB will question your intent.
Social club memberships
Country clubs, gyms, and social organizations in California — especially if you remain active — are audit factors.
Not tracking days
If you cannot prove 183+ days in Nevada, the FTB has grounds to challenge. Keep records: credit cards, flights, tolls.
Filing part-year return incorrectly
Getting the 'departure date' wrong or claiming residency change earlier than facts support is a common trigger.
Action Items
Pre-Move Checklist: Establish Nevada Residency Cleanly
A comprehensive checklist for California homeowners planning their move to Nevada. Complete these items to establish clean residency.
Residency Establishment Checklist
- Purchase or lease Nevada primary residence
- Obtain Nevada driver's license (within 30 days)
- Register to vote in Nevada
- Register vehicles in Nevada
- Update mailing address on all accounts
- Move banking relationship to Nevada branch
- Establish Nevada doctor, dentist, CPA, attorney
- Cancel or downgrade California club memberships
- Begin tracking days spent in each state
- If self-employed: register business in Nevada
- Update professional licenses to Nevada
- Notify California FTB of residency change on departure-year return
- Consult CPA on departure-year tax filing strategy
- If keeping CA property as rental: plan for non-resident CA return
Frequently Asked Questions
Common questions about California-to-Nevada residency changes and tax implications.
How long does it take to establish Nevada residency?
Mechanical steps (license, voter registration, vehicles) take 1–2 weeks. However, the FTB looks at the full tax year. Most advisors recommend moving early in the calendar year to demonstrate a full year of Nevada presence.
What triggers a California FTB residency audit?
Common triggers: filing a part-year return with high income, selling a CA property at large gain, maintaining a CA home, and CA-connected income sources. The FTB uses data matching (credit cards, cell records, social media) to verify claims.
What counts as domicile vs residence?
Residence is where you live. Domicile is where you intend to live permanently. California looks at 'closer connections' — family, possessions, social/professional ties — to determine domicile. Intent alone is not enough.
Will California tax my rental income from a CA property after I move?
Yes. California taxes all California-sourced income regardless of your residency. You will file a CA non-resident return and pay CA state tax on that rental income. This does not affect Nevada residency for other income.
When should I consult a CPA?
Before you move — ideally 3–6 months before. A CPA specializing in multi-state taxation can structure timing of your move, property sale, and income recognition to minimize tax exposure legally.
Plan Your Tax-Smart Move to Nevada
Book a 15-minute strategy call. Bring your income range and property numbers — we will show you what Las Vegas offers at your budget and connect you with our network of multi-state tax professionals.