As Second Homes Get Far More Use, the Question Is: Where Do You Live?

In spring 2020, whereas caught at residence in Leesburg, Va., exterior of Washington, D.C., Kent Rounds, a cybersecurity government in his 50s, suffered a bout of cabin fever so extreme he determined to satisfy a long-held dream of splitting his time equally between the East Coast and a spot in the Teton Valley area, on the Wyoming/ Idaho border. In February, Mr. Rounds and his spouse, Simone Rounds, who’s in her 30s and in addition works in cybersecurity, closed on a $2.5 million home in Driggs, Idaho, bought sight unseen. They have already spent six months in the residence this yr.

The choice to separate their time between two properties additionally got here with some challenges hardly ever encountered by individuals who spend solely weekends and the occasional trip week at a second residence. The couple had to determine the way to ship automobiles midway throughout the nation, discover a second pediatrician for his or her 11-month-old daughter, and get their three Maltese canine forwards and backwards between the two properties. Since airways permit passengers to journey with just one pet at a time, the pups haven’t made the journey, Mr. Rounds mentioned. “They’re currently bouncing around between my family, friends and a nanny,” he mentioned.

Welcome to the “co-primary home” life-style, the place time is equally break up between two or extra properties, rendering the idea of a main residence out of date. For the uber wealthy, this life-style has lengthy been a norm, however the proliferation of distant work resulting from the pandemic has made it a viable life-style alternative for second-home house owners who’re much less rich.

The freedom to stay and work from whichever of your properties you need comes with a number of challenges, whether or not it’s discovering a neighborhood physician at every location, remembering which home has which garments, deciding the place to ship your kids to high school or figuring out which of the your residences is your main.

That final one is each complicated and essential. Taxpayers can have just one domicile, no matter what number of properties they personal, in response to Joan Crain, senior director and international wealth strategist at BNY Mellon Wealth Management. Where their main residence is positioned can have important implications for the house owner’s tax invoice.

Generally, most states take into account a domicile to be a main residence and the place the place the taxpayer spends the majority of their time, she mentioned. When a taxpayer spends equal time in a number of properties, it may be a grey space. When the domicile isn’t clear minimize, “state tax auditors will look at other factors, like where is your business address?” she mentioned. “Where do your credit card bills go? Where are your doctors?”

But what if the reply to these questions is “both”?

Designating a main residence is necessary to keep away from having all your earnings taxed by a number of states, mentioned Janet Hagy, president of CPA agency Hagy & Associates in Austin. “You prevent that by keeping track of the number of days you’re in a particular state,” she mentioned.

Someone who crosses state traces for work sometimes will get a tax credit score of their residence state for nonresident earnings taxes paid to a different state. Some states tax the earnings of nonresidents who spend a sure variety of days bodily working in the state, mentioned Taryn Goldstein, Florida state and native tax chief at accounting agency BDO USA.

Quite a few states have reciprocity agreements, together with New Jersey and Pennsylvania. For years, some states, notably in the Northeast, have taxed people who bodily labored in the state however lived elsewhere to make up for declining tax income. During Covid, some waived that rule, however the difficulty is evolving. “Since a lot of people have made their new telecommuting places permanent,” Ms. Goldstein mentioned, states “are starting to tax those people.”

Determining which of your properties is your main is necessary for different causes. Certain states, together with Texas and Florida, give taxpayers who personal their main residence there a homestead exemption on their native real-estate taxes. In some states, a main residence can also be protected by limits on annual property tax will increase, Ms. Hagy mentioned. There can also be a capital beneficial properties exemption related to promoting a main residence; sellers can exclude beneficial properties as much as $250,000 if single and $500,000 if married.

Okay. Duane Brelsford, 63, and his spouse, Terri Brelsford, 57, take into account Pullman, Wash., to be their main residence for tax functions. In truth, it’s the place the place they spend the least period of time. Mr. Brelsford mentioned he and his spouse migrate between a house in Lake Coeur d’Alene, Idaho, in the summer season and a house in Cabo San Lucas, Mexico, in the winter. They take journeys to Pullman each 4 to 6 weeks in order that Mr. Brelsford can examine in at the workplace.

Mr. Brelsford exterior his residence in Pullman, Wash., which he considers to be his main residence.


Chona Kasinger for The Wall Street Journal

Behind their Idaho residence, the Brelsfords have a 160-acre ranch.


Chona Kasinger for The Wall Street Journal

“I don’t need to be there as often,” mentioned Mr. Brelsford. However, he claims his Washington residence as his main residence as a result of Pullman is the place his real-estate growth companies are based mostly. Mr. Brelsford additionally grew up in Pullman, went to high school there and he and his spouse raised their two daughters there.

Another logistical problem of co-primary residing is determining the place to get mail delivered. This may appear trivial till an necessary authorized doc or paper invoice arrives at the residence you’re not in.

Mr. Brelsford, and lots of others residing in co-primary properties, solves a part of this downside by paying all his payments on-line and thru automated invoice pay. He has every little thing else forwarded to his residence in Pullman, the place he collects it throughout his visits.

Tom Newgarden, 54, and his fiancée Erica Wind, 36, who work in the insurance coverage trade, get mail at their 4 properties—one in New York City, a apartment bought for $1.35 million in May 2020 in Asbury Park, N.J., a trip residence in Charleston, S.C., they purchased in July for $660,000, and an residence they lease in Philadelphia close to Ms. Wind’s workplace. Now that the world is slowly reopening, the couple plan to spend a number of days of every week in New Jersey and Philadelphia.

Tom Newgarden and his fiancée, Erica Wind, at their apartment at the Asbury Ocean Club in New Jersey.


Tom Newgarden

Mr. Newgarden mentioned he has payments related to every residence despatched to the corresponding deal with, which helps him observe bills for every property. To keep away from lacking something necessary or time delicate, he signed up for a service from the U.S. Postal Service that sends him a day by day e mail displaying him an image of what’s been delivered. Mr. Newgarden mentioned that going ahead, New Jersey can be their main residence, not solely as a result of they’ll spend the most time there, however as a result of it feels “more like home” than wherever else.

One of the much less legally fraught, however no much less annoying challenges of residing in a number of properties is holding observe of the place your stuff is.

Josh Hepburn, 35, and his associate, Lynn Odvody, 60, a customized home-builder, have duplicate clothes, canine beds, a full set of instruments, and Breville Barista Express espresso makers at their properties in San Francisco and South Lake Tahoe, Calif., which they purchased for $700,000 in February 2020. A month after closing, Covid hit and the couple arrange a house workplace in Tahoe for Mr. Hepburn, who works for a smart-home startup. He has a pc monitor in each locations and brings his laptop computer when he travels forwards and backwards. The couple spend roughly 40% of their time in Tahoe, returning to San Francisco when Mr. Odvody must be on a job website.

Josh Hepburn and his associate, Lynn Odvody, bought a cabin in South Lake Tahoe, Calif., a three-hour drive from their home in San Francisco.


Hepburn Family Photo

Mr. Hepburn (left) and Mr. Odvody with their canine in South Lake Tahoe.


Hepburn Family Photo

Mortgage government Charles Nay, 58, and his spouse, Carrie Nay, 53, a stay-at-home mother to their 12-year-old daughter, have been shuttling forwards and backwards between their residence in Medina, Wash., which they purchased for $1.715 million in April 2013, and a cabin in Cle Elum, about 90 miles away, which they purchased in September 2020 for $1.35 million. They hold bins by the doorways of each properties. “When we’re ready to leave, we grab it and go,” he mentioned. The household canine, a Cavachon named Harlow, goes in the automotive forwards and backwards with them and acknowledges the exit for the cabin. “By the time we get to the gate, she’s like trying to jump out the window,” he mentioned.

The Roundses hold automobiles at every of their properties—a truck and a Porsche Cayenne in Driggs, Idaho, and one other Porsche Cayenne in Virginia. Mr. Rounds mentioned though Virginia stays his main residence for tax functions, he received an Idaho driver’s license, which made it simpler for him to get permits for searching and fishing.

Having a driver’s license exterior of your domicile state might elevate a purple flag, mentioned Ms. Hagy, by offering each states with proof to make a case {that a} taxpayer is primarily domiciled there.

A view of Lake Coeur D’Alene, the place Okay. Duane Brelsford and his spouse, Terri Brelsford, constructed a home in 2016.



As for automotive insurance coverage, premiums are based mostly on the place the automobile is garaged, and price varies extensively based mostly on the perceived threat profile of that location, mentioned Aaron Gordon, a vp at Gordon Companies, a New York-based insurance coverage brokerage agency. Typically, a automotive is registered to an individual’s residence deal with, though that will get murky when there are two (or extra) properties in play. For somebody actually splitting their time between two properties, he mentioned, there’s each cause to storage the automotive in the much less dangerous location.

The bigger-ticket concern is house owner’s insurance coverage, Mr. Gordon mentioned.

Insuring a second house is dearer than a main residence as a result of, in the eyes of the insurer, the house owner could also be absent for lengthy stretches of time, he mentioned. If a leak shaped, the house owner may not know for a number of weeks.

The Brelsford property in Idaho doubles as a nature protect.


Chona Kasinger for The Wall Street Journal

However, Mr. Gordon mentioned insurance coverage corporations are more and more allowing shoppers to designate properties as “dual primary” residences, in response to a larger quantity of people that break up their time extra evenly between two properties. “The ability for people to check up on things is possible,” he mentioned, citing the shift to distant work. “Before, you had to do this crazy thing called, ‘Go to an office.’ ”

One set of things that tax authorities take into account when figuring out which house is the main, says Ms. Crain, is expounded to the place the particular person has deep, lasting connections, corresponding to their buddies, prolonged household, physician, vet and social networks. But individuals who have co-primary properties typically have all these issues in two or extra areas.

The Roundses have a pediatrician in each Idaho and Virginia, though they solely have main docs for themselves in Virginia. Mr. Rounds mentioned his insurance coverage covers each pediatricians, as long as they’re in community.

A drone shot close to the Brelsfords’ villa in Cabo.


Noah Duethman


How do you suppose tax authorities ought to outline “primary home”? Join the dialog beneath.

Mr. Newgarden, who has seen docs in New York and New Jersey, mentioned he has a high-deductible plan that enables him to see specialists wherever and each time he must. It permits for flexibility, though he mentioned he’s primarily paying for every little thing as he goes. His fiancée, Ms. Wind, doesn’t have a main care doctor, however the couple wasted no time lining up vets for his or her two toy Australian shepherds, named Bear Bear and Teddy, in every locale. “It’s good to be prepared for emergencies,” Mr. Newgarden mentioned.

When household and good friend connections are additionally positioned close to a number of properties, the difficulty of a main residence will get murkier.

Mr. Brelsford mentioned that when he and his spouse are in Pullman, he hangs out with highschool and school buddies, and he belongs to the Golf Club at Black Rock in Idaho. He has a wholly totally different social community in Cabo, the place his mom additionally constructed a house.

Charles and Carrie Nay have a cabin at Tumble Creek, a non-public group in Cle Elum, Wash. The group’s central Great House is proven right here.


Rachael Ann Adkins

Mr. Nay mentioned he was initially involved his household could be bored at their mountain cabin with no social community or close by city. But the neighbors of their non-public group, known as Tumble Creek, are pleasant and several other buddies from Medina have determined to construct properties there. On a current weekend, a number of {couples} from Medina, together with the Nays, had drinks at the clubhouse at Tumble Creek, adopted by dinner at a non-public residence.

Recently, as staff and college students are being known as again to work and faculty, co-primary households are adjusting once more.

The Nays lived at Tumble Creek full time whereas their 12-year-old daughter was studying remotely, however in February 2021, when college resumed in-person three days every week, they slept in Medina on college nights and would then “scoot back up to the mountain,” mentioned Mr. Nay. This yr, the cabin is for weekends and holidays.

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