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Can I Have My Name on the Deeds on Properties in Two Different States & Claim Residency in Only One?

Many families own multiple homes, one being a primary location and others being either rental or personal vacation properties. Ownership of these properties is signified by a deed. As a result, a name can appear on multiple deeds, but residency can be claimed on only one.

  1. Deeds Defined

    • A deed is a signed document that transfers property from one party to another. The document is finalized in front of a notary public, who also signs the deed to signify that it was signed by both parties to the transaction in her presence. The deed describes the transferred property in detail so as to clearly establish the ownership interest of the acquiring party. Upon completing the deed, it should be filed with the recorder’s office in the county where the property is located. The recorder’s office is the repository of official documents for the area and allows people to establish the ownership rights in the local real estate. The record title or deed is the one that is recorded in the local recorder’s office.

    Residency Defined

    • A residence is the primary home of an individual. What defines a home as a residence depends on the legal situation in which you are operating. If you are in the military, the legal residence is where the serviceman chooses to retire after retirement. Residency requirements for state proceedings, such as divorce, vary by jurisdiction. In tax law, the question is even more complicated. If you rent a home in which you lived, a residence is one where you or a family member lived for 14 days or for 10 percent of the number of days during the tax year the unit is rented. If you meet that standard, you cannot claim certain rental deductions for that tax year. However if you own two homes and sell one, the tax code defines a residence as your main home, defined by where you live most of the time, where you are employed, and the mailing address of important correspondence.

    Owning Property in Multiple States

    • Owning property in multiple states has several implications. First, you will owe property taxes on both. Property tax is a levy on the right to own real estate located in a certain area. The tax is defined by state law and therefore varies by jurisdiction. If you own multiple properties, you are likely renting the properties, which is not your primary home at least part of the time. In these scenarios you need to be aware of the federal rules on taxing rental income, especially if you use one or more of the property personally for a portion of the year. This use could disqualify you from taking full deduction you might otherwise be able to claim. In addition, you will probably have to pay state taxes on the income the rental homes generate. If the homes are in multiple states, you will have to file returns in each state.

    Considerations

    • If you are in the process of purchasing a home in your own state or out of state, consult with a licensed attorney in the area where the home is located. A local attorney will ensure that the purchase is made in compliance with local state laws. When completing your tax returns, consult with a certified public accountant, or CPA, to ensure that the returns are appropriately filed. While every effort has been taken to ensure that this article’s completeness and accuracy, it is not intended to be legal advice.

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