For Estate And Gift Tax Purposes Residence Means Domicile

For estate and gift tax purposes, residence means domicile.

If an alien individual is not domiciled in the United States at the time he makes a gift, he is nonresident for gift tax pur­poses. (Treas. Reg. § 25.2501 -1 (b); F. Giacomo Fara Forni v. Commissioner, 22 T.C.M. 975 (1954).)  If he is domiciled outside the United States at the time of his death, he is nonresident for estate tax purposes. (Treas. Reg. § 20.0-1(b) (1); Estate of Julius Bloch-Sulzberger v. Commissioner, 6 T.C.M. 1201 (1947).)

Every individual must have a domicile. (See Restatements (Second) of Conflicts of Laws § 11(2) (1971).)  At birth, a child normally acquires the same domicile as his father. If his father changes his domi­cile while the child is a minor, the child’s domicile will normally fol­low that of the father. Once he is an adult, the individual is free to choose his own domicile.

To effect a change of domicile, there must be physical presence in a new jurisdiction with the intent to make that place his home and with no present intention of departing.  A married woman traditionally takes the domicile of her husband but she is capa­ble of changing her domicile (i.e., Domicile of Choice).

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