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BUNDLE OF MONEY MAY RIDE ON PLACE YOU CALL HOME

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In the ever-more-mobile world of 1990s America, a simple question like "Where do you live?" doesn't always have a simple answer any more.

But whether you have multiple addresses or no fixed abode at all, political and tax rules in this country sooner or later compel most people to state their domiciles.And if you have income, savings or investments, or expect to leave any assets at all behind when you die, quite a bit of money may ride on the place you call home.

"Whether you have moved to your retirement home or live in more than one home during the year, where you actually establish domicile can have a tremendous impact on your tax bill," says the accounting firm of Ernst & Young.

Income taxes, estate taxes and laws covering distribution of property at death vary from state to state and locality to locality.

For people who move to a new state on retirement, the situation can be complicated by efforts of their old state of residence to collect what are known as "source taxes."

These are levies imposed by State X on retirement income, even if you live in State Y now, based on the argument that you "earned" this money while living in State X during your working years.

"Not surprisingly, many people believe source taxes to be unfair and are vigorously protesting, claiming they're being taxed without representation since they have no vote where they no longer live," observes Lisa Berger in her book Feathering Your Nest - The Retirement Planner.

"Individual state tax laws are in flux," she adds. "Pensioners should consult with a local tax expert before moving or making decisions about receiving pension payments."

A broader problem confronting many retirees, and others who move from place to place, is simply establishing a domicile for legal, business and tax purposes in a state with the most advantageous rules.

"A person can have several residences but only one domicile," says attorney Alex Soled in his book Estate Planning, published by Consumer Reports Books.

When there is a dispute or uncertainty over where an individual's domicile was at his or her death, tax authorities may apply any of a series of tests.

"They may inquire where the decedent voted, where the automobiles were registered, where a safe-deposit box was maintained, where the children went to school, where checking and savings accounts were maintained, what state the decedent declared to be his or her residence in a will, and so on," Soled notes.

Thus, Ernst & Young says, it makes sense to vote, do your banking, register your car and get your driver's license in the state where you wish to establish your domicile.

The firm also suggests filing a formal declaration of domicile wherever possible. "Some states, such as Florida, have a special form you can file to establish permanent residency," it says.

Some other suggestions Ernst & Young offers: "Spend more time in your state of domicile than in any other state. Use your new address in all formal agreements.

"Become a member of organizations in the new state, rather than continue memberships in the old state. Execute a new will in which you refer to your domicile.

"Register securities at your new address. Change insurance policies that do not relate specifically to property located outside your new state."