Moving to Florida, measured on what it actually saves.
If Halloran Building Controls sells as a stock sale after you’ve moved, Florida keeps about $6.2 million of California tax off the sale and saves you about $140,000 a year after it. If the buyer wants the sale treated as an asset purchase, most of that disappears. The structure of the deal matters more than the date on the moving truck.
Some of your income leaves with you. Some stays in California.
California taxes its residents on everything. Once you are Florida residents, it taxes only what it can source to California, and a business that sells 88% of its work in California keeps a lot of income there.
Asset treatment: 88% still taxed in California
Two choices decide most of the answer.
Pick how the deal is structured and when you move. Everything below updates, counted from the move through ten years after closing.
The buyer’s tax plan is part of yours.
A stock sale is sourced to where you live. If you sell your shares as Florida residents, California has no claim on the gain.
Asset treatment follows the business. Most buyers want to treat the purchase as an asset purchase, through a 338(h)(10) election or an F reorganization, so they can write off what they paid. California’s courts have held that gain like this is apportioned to California by the company’s sales, even for owners who live elsewhere. At 88%, the move saves very little on the sale.
So it becomes a price question. A buyer who wants asset treatment gets a tax benefit worth millions. Your banker can ask them to share it by covering the extra California tax, about $4.7 million, plus the tax on that payment itself.
Its own decision, with a real cost either way.
California will ask. Have the answer ready.
The Franchise Tax Board looks hardest at the year of a large sale. It asks where your closest connections are: home, family, days, doctors, clubs, where your things are. More than nine months in California in a year creates a presumption that you live there. The burden of showing otherwise is yours.
- Now to March 2027Decide on the house; your CPA confirms the 88% figure; the banker plans a 2028 process
- Spring 2027Buy in Naples; start the day log
- June 2027Clara graduates; the family moves
- July 2027Florida licenses, voter registration, Declaration of Domicile; wills and trust re-signed in Florida
- January 2028Homestead exemption (resident on January 1, filed by March 1)
- Spring 2028 onLetter of intent signed only after the move; sale expected to close in the second half
- Florida driver’s licenses and car registrationsPeter and LenaJuly 2027
- Voter registrationPeter and LenaJuly 2027
- Declaration of Domicile filedAttorneyJuly 2027
- Wills and revocable trust re-signed under Florida lawAttorneyAug 2027
- Doctors, dentists and vet in NaplesLenaAug 2027
- Bank, brokerage and billing addressesCaldermontJuly 2027
- Club memberships switched to nonresidentPeter · or resignedSep 2027
- Art, heirlooms and the family’s things movedFamilyJune 2027
- Day log kept, with Peter’s California workdaysPeter · phone-based trackingOngoing
- Homestead exemption filedPeter and LenaMar 2028
What we’ll ask each of them.
- BankerLead with a stock sale. If a buyer needs asset treatment, ask them to gross up the California tax it costs you. No letter of intent before the move.About $4.7M
- CPAConfirm the 88% California sales factor, keep the pass-through entity election in place through closing, and prepare the 2027 part-year returns.Factor and PTET
- AttorneyDeclaration of Domicile, Florida wills and trust, and a structure for the sale with no installment payments if closing comes before the move.Domicile file
- YouDecide on the San Diego house by March. Keep the day log from the first day in Naples.House decision
California tax. 2025 married filing jointly rate schedule, the latest published, plus the 1% tax on taxable income over $1 million. As nonresidents, California applies the rate on all your income to the part it can source to California.
The sale. Price less 2.5% deal costs and your $2.4 million basis. Federal tax at 20% is the same in every case and is left out. Under asset treatment, the pass-through entity tax (9.3%) is deductible federally; we credit that at 20%, which slightly reduces what California costs you.
Before closing. Peter’s $600,000 salary (about 110 workdays a year in California) and $5.2 million of company profit, 88% California. Investment income from today’s $9.0 million portfolio at 3.2% a year.
After closing. Proceeds invested with the existing portfolio; 3.2% of it taxable each year, 4% growth after spending; ten years, not discounted. Florida costs: Naples property tax and insurance over San Diego’s, growing 3% a year, plus $180,000 to move.
What’s next. We’ll walk through this with you, your CPA and your estate attorney on November 12, then brief your banker on the structure before any buyer conversations begin.
Confidential, prepared for Peter and Lena Halloran. Prepared October 2026. Values and tax are estimates based on the assumptions above; the final structure, purchase price allocation, apportionment and California’s view of your residency will change them. This is not tax or legal advice; please review with your CPA and attorney.
This sample interaction is a derivative of real advisor work in Helmsted, fully de-identified: a hypothetical composite with fictitious names. Peter and Lena Halloran, Halloran Building Controls and Caldermont Private Wealth are fictitious.
Built with Helmsted.