Which one is my principle residence?


J

John Smith

I live in a house in Gerogia. My wife and kids live in a
house in Tennessee. I drive to Tennessee to see them on
Friday night and go to Georgia on Sunday night. We file
joint return and own both houses. Which house is our
principle residence?
 
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D

Dave Woods, EA

John Smith said:
I live in a house in Gerogia. My wife and kids live in a
house in Tennessee. I drive to Tennessee to see them on
Friday night and go to Georgia on Sunday night. We file
joint return and own both houses. Which house is our
principle residence?
The answer, of course, is "it depends". The answer would
be the same if you had two TN residences. So using multiple
States only convults the question.

Unless you are planning to sell both houses and you have
more than a $250,000 gain in one of the houses, it does
not make any difference.

Much more information is needed for reliable answer. But
if you have a high tolerance for off-the-cuff guesses, I'll
go with TN for your wife and GA for you.
 
D

Dave Woods, EA

John Smith said:
I live in a house in Gerogia. My wife and kids live in a
house in Tennessee. I drive to Tennessee to see them on
Friday night and go to Georgia on Sunday night. We file
joint return and own both houses. Which house is our
principle residence?
This almost sounds like a homework question. The answer is
it depends, and is a judgement call based on a lot more
facts you haven't provided.

--
David M. Woods, EA
Boston, MA 02109

Postings here are general information only and not to be
relied upon as advice.
 
P

Phil Marti

John Smith said:
I live in a house in Gerogia. My wife and kids live in a
house in Tennessee. I drive to Tennessee to see them on
Friday night and go to Georgia on Sunday night. We file
joint return and own both houses. Which house is our
principle residence?
It sounds to me like Tennessee is your principal residence,
but Georgia is your (not your wife's) tax home.

Phil Marti
Topeka, KS
 
P

Paul

John Smith said:
I live in a house in Gerogia. My wife and kids live in a
house in Tennessee. I drive to Tennessee to see them on
Friday night and go to Georgia on Sunday night. We file
joint return and own both houses. Which house is our
principle residence?
There's not enough information provided to make that
determination.

Where are you registered to vote? Where are your vehicles
tagged? Where do you attend church? Where do you bank?
Where do you generally get your mail?

And remember, it's highly likely that you have a principle
residence in Georgia and your wife her principle residence
in Tennessee.
 
H

Harlan Lunsford

John said:
I live in a house in Gerogia. My wife and kids live in a
house in Tennessee. I drive to Tennessee to see them on
Friday night and go to Georgia on Sunday night. We file
joint return and own both houses. Which house is our
principle residence?
If the houses are jointly owned, seems to me the TN house is
principal, given that wife and (what, 2 kids?) live in it 7
out of 7 days, plus you on two days. That's 21 plus 2
person days, versus your five person days in Georgia.

However a different result might obtain if you alone own the
Georgia house and she (or y'all) own the TN house.

Good question.

cheer$,
Harlan Lunsford, EA in LA
 
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D

D. Stussy

John said:
I live in a house in Gerogia. My wife and kids live in a
house in Tennessee. I drive to Tennessee to see them on
Friday night and go to Georgia on Sunday night. We file
joint return and own both houses. Which house is our
principle residence?
Where are you registered to vote?
Which state do you have a driver's license from?

All other indications imply Tennessee. However, your "tax
home" is Georgia.
 
B

BMS

John Smith said:
I live in a house in Gerogia. My wife and kids live in a
house in Tennessee. I drive to Tennessee to see them on
Friday night and go to Georgia on Sunday night. We file
joint return and own both houses. Which house is our
principle residence?
Where do you vote?
 
A

A.G. Kalman

John Smith said:
I live in a house in Gerogia. My wife and kids live in a
house in Tennessee. I drive to Tennessee to see them on
Friday night and go to Georgia on Sunday night. We file
joint return and own both houses. Which house is our
principle residence?
You have not provided enough information to answer your
question as it pertains to you and your spouse (however, see
last comment below). A recent district court decision in
Arizona sheds some light on this question. Whenever a
taxpayer alternates between properties using them both as a
residence, the property that is used the majority of time is
usually the taxpayer's principal residence. However, in the
court decision the judge reiterated that while IRS regs
state that time is ordinarily the controlling factor, one
has to look at all the facts and circumstances. This would
include elements such as, address used on mail and tax
returns, who issued driver's license, where vehicles are
registered, where taxpayer banks, where taxpayer belongs to
a religious organization, attends services, recreates, etc.
In addition, the judge said that the determination of which
property is the principal residence is determined on a year
by year basis, not on an aggregate basis over a period of
time extending beyond one year.

Therefore, it is technically possible, that 1. You don't
have a principal residense (PR), or 2. Georgia is your PR in
one year and Tennessee is your PR in another year or 3. One
or the other property is your PR.

Lastly, your spouse appears to have as her PR the home in TN
as you made no mention of her living in any other property
as a principal residence.

The court decision was JM Guinan vs US, (D.C., AZ 2003).

Alan
http://taxtopics.net
 
C

Christopher Green

John Smith said:
I live in a house in Gerogia. My wife and kids live in a
house in Tennessee. I drive to Tennessee to see them on
Friday night and go to Georgia on Sunday night. We file
joint return and own both houses. Which house is our
principle residence?
I believe it turns on "all the facts and circumstances". The
factors to consider were clarified late last year, IIRC.
They are, roughly: where you work; where your family lives;
what address you use for official purposes such as tax
returns, driver licenses, voter and auto registration; what
address you use as your mailing address; where you bank; and
where your religious and social affiliations are. In short,
it's the location to which you're mainly connected when all
the ties that normally bind you to a place are considered.
 
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G

Glen Hughes, CPA

John Smith said:
I live in a house in Gerogia. My wife and kids live in a
house in Tennessee. I drive to Tennessee to see them on
Friday night and go to Georgia on Sunday night. We file
joint return and own both houses. Which house is our
principle residence?
Do you file GA state income tax as a resident or
non resident.

Glen Hughes, CPA
www.glenhughescpa.com
(e-mail address removed)
 
D

D. Stussy

By the way, Burgess and Bill Raby had an article in Tax
Notes a couple of months back where they noted it *was*
perfectly possible for someone with multiple residences to
have *no* principal residence for Section 121 purposes.
I read that article - as it was also printed in the "Tax
Practice" weekly magazine. I also thought it was
interesting that in one case, the Court added up the YEARS
and not simply took 720 days in the past 5 years....
In the case in question, though, I think there's a strong
case for the "facts and circumstances" argument that the
house with the wife and kids is the principal residence,
even though the Georgia residence "wins" the mechanical
number of days test (which is the most important, but not
necessarily 100% determinative, factor under the final
regulations for Section 121).
I would say that it is HER principal residence, because she
lives with the children and they are in school. However, as
you note below, that wasn't the question.
 
F

Frederick Jorden

I read that article - as it was also printed in the "Tax
Practice" weekly magazine. I also thought it was
interesting that in one case, the Court added up the YEARS
and not simply took 720 days in the past 5 years....
I would say that it is HER principal residence, because she
lives with the children and they are in school. However, as
you note below, that wasn't the question.
The issue is not legal home or residence but Tax Home. Some
folks can be itinerants and have no tax home.

Way back I had an audit of a construction superintendent who
worked in eight states, none of which was his resident
state. The audit involved his travel expenses. I held my
breath for the entire audit. The issue was not brought up.
 
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D

D. Stussy

The issue is not legal home or residence but Tax Home. Some
folks can be itinerants and have no tax home.
No, it wasn't. In the article and court case, the taxpayers
were trying to take the exclusion for a sale of residence.
Tax home has nothing to do with that aspect.

In the original question of this thread, there was no doubt
as to his tax home. He was asking as to whether he had a
principal residence, and if so, which.
 

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