Changing residence from Oregon to Washington

[Murse]

Hello everyone, I will be moving to Washington for several different reasons, one of which is to avoid/decrease capital gains tax. Oregon taxes capital gains at 9%, Washington currently does not tax capital gains. I plan on commuting to my job in Oregon. We plan on moving mid-December. I went heavy in some recovery stocks and have over 6 figures in gains, I plan on waiting to sell until at least August to get federal LTCG rates.

Questions- how long do I need to live in Washington before Oregon cannot tax my capital gains? Do I need to wait until 2022, or July of 2021, or January of 2021?
2- it is possible for me to work in Oregon but reside in Washington, thus making my income taxable in Oregon but not my capital gains, right? Or will keeping my job in Oregon make my capital gains taxable as well?

[skuzuker28]

There isn't a set time period, and you can still be considered and Oregon resident even if you don't physically live in the state.  Factors include: which state issues your drivers license, where you are registered to vote, where your mail is delivered, where your social nexus is, etc.

IF you are determined to have domiciled in Washington, then only the income earned in Oregon is taxable.  Unearned income (such as interest and capital gains) is generally taxable to your resident state, though CA in particular is trying to keep their greedy hands on you for longer.

[lhamo]

Here are the general rules for determining whether you are a full-, part-time or non-resident of Oregon:

https://www.oregon.gov/dor/programs/individuals/Pages/what-form.aspx

It appears to me that if you establish your permanent residence in Washington at the end of this year, and none of your capital gains in 2021 are derived from Oregon state sources, then you should not have to pay Oregon capital gains taxes on those earnings.  I personally would spend the money to get a good local CPA or tax professional (or both) to advise you before you sell, though -- worth it to know for sure.

[yachi]

over 6 figures in gains

so 6 figures would be 100,000 to 999,999.  Over 6 figures is more than this.  Congratulations!  Did you use any long term stock options, or just regular stock?  If this is a one time deal I'd say it definitely makes sense to consider as one factor in your move.  From a number of articles online it looks like Washington periodically tries to pass a capital gains tax, but seems to have been unsuccessful.

[trollwithamustache]

over 6 figures in gains

so 6 figures would be 100,000 to 999,999.  Over 6 figures is more than this.  Congratulations!  Did

Holy smokes, get off the internet and go interview 3 accountants in the real world. Now.

[yachi]

over 6 figures in gains

so 6 figures would be 100,000 to 999,999.  Over 6 figures is more than this.  Congratulations!  Did

Holy smokes, get off the internet and go interview 3 accountants in the real world. Now.

Lol.  Thanks troll, but I can't be the only one shocked by a million dollars in capital gains in less than a year.

[Murse]

over 6 figures in gains

so 6 figures would be 100,000 to 999,999.  Over 6 figures is more than this.  Congratulations!  Did you use any long term stock options, or just regular stock?  If this is a one time deal I'd say it definitely makes sense to consider as one factor in your move.  From a number of articles online it looks like Washington periodically tries to pass a capital gains tax, but seems to have been unsuccessful.

Over 300k in total this year but 200k in taxable accounts. This is all in a single regular common stock (Around 14k shares of SPR) this is a one time deal, I am now living in Washington state. I will interview accountants but plan on holding until I can get the ltcg rates in September-novemberish. I am hoping it will at least double again but time will tell.

PS- I understand there is a lot of risk in this plan but I am comfortable with the risk. My plan will not change even though I am sure I am about to be facepunched. If it fails I will work part time until I can take my pension in 20 years, if it goes as planned I maybe FI this time next year.

[yachi]

Congrats!  I invest fairly riskily as well.  Mostly leaps on Berkshire Hathaway.  I learned to carry them in my IRA accounts from having to pay too much tax selling them before expiration.  Pennsylvania taxes everything, except lottery winnings until a few years ago... Some newspaper realized they were exempt and started asking around.

[WanderLucky]

Also, keep in mind that if you are a WA state resident, and do some of your work in WA state (like working from home) but for an OR company who is collecting the OR state income tax, you can get that OR state income tax back when you file your annual taxes. You need to keep track of the days that you worked in WA state though.