You always hear of people moving out of their state and hometown. But how many people have actually moved back to the area they grew up? Did you rekindle old friendships? Start fresh? Was it different than you remember?
Hey everyone, my wife and I are relocating mid-year (around July 1st) from a state with no income tax to one with a top rate of nearly 10%. Combined gross income is roughly $500K W-2 plus some self employment. Wanted to get input from people who have navigated something similar.
The main question - should we sell appreciated stock before the move?
We have roughly $600-700K in taxable brokerage accounts with a mix of long and short term positions. Our current state taxes long term capital gains at effectively 0%. The new state taxes capital gains as ordinary income at up to nearly 10%. Selling appreciated long term positions before establishing residency in the new state would mean paying only 15% federal vs roughly 25% combined after the move. We could immediately rebuy the same positions since wash sale only applies to losses not gains. We also have about $16K in capital loss carryover that offsets the first chunk of gains dollar for dollar.
On a hypothetical $300K in unrealized gains that math works out to roughly $29K in tax savings by selling before vs after the move. Seems like a no brainer but curious if anyone has done this and what gotchas to watch out for.
Has anyone made a similar move between states with drastically different income tax situations? What did you do with your brokerage before moving and any regrets? Anything else worth considering we might be missing?