Permanent Place of Abode: The Nature of the Relationship
12.14.15 | SALT Chat
The leading case examining what constitutes a permanent place of abode (“PPA”) states that “[p]ermanence, in this context, must encompass the physical aspects of the dwelling place as well as the individual’s relationship to the place.” In the last several posts, I have examined the physical aspects of a PPA but now it is time to move on to the other element of permanence. The nature of the relationship one has to living quarters is the most disputed and mine-laden aspect of permanence.
Mathematically speaking, a relationship is the correspondence between at least two variables. The Merriam-Webster Dictionary defines relationship as “a state of affairs existing between those having relations or dealings.” The New York State Nonresident Audit Guidelines (“Guidelines”) create quite the state of affairs in providing relationship advice.
The state of affairs I will be examining in the next several posts go beyond factors (I hope) most of you would never consider in your daily relationships and include such key terms as “unfettered access” and “residential interest.” I will discuss the type of contributions, both monetary and otherwise, that create the requisite relationship of permanence. I will delve into why it matters if you are an undergraduate or graduate student, whether you have the keys to all the locks, and whether you leave a shirt at your parents’ home. Since we are discussing your parents’ homes, why not examine how far they live from your workplace and whether they have your run of the mill couch or a pullout sofa?
This is just a sampling of the items to think about so as to not get permanently caught up in the residency trap. There are many variables based on individual circumstances. We will examine some of the more typical and avoidable traps.
Uncertain about your exposure to permanent place of abode rules and the impact on your tax requirements? Contact me at email@example.com.
Wayne Berkowitz, a tax partner and head of the State and Local Tax Group at Berdon LLP, advises on the unique requirements of governments and municipalities across the nation.