Florida Tax Attorney Blog

The Florida Constitution (F.C.) (Article 10, Sec. 4) protects homestead property from levy of creditors of the owner. The F.C. provides that homestead property should be liberally construed in favor of the homesteader against the creditor. The person claiming the homestead exemption must be a Florida resident who establishes that he or she made, or intends to make, the real property his or her permanent residence.

A permanent residence is the address listed on your driver's license, the place from which you register your cars, or file your income tax return or vote. If this property is not your permanent residence, or you are not a resident of Florida, you must notify the Property Appraiser. It is also important to note that only natural persons may claim homestead (not corporations or other like entities). If you are receiving a residency based exemption or benefit in another county, state or country; you are not eligible for exemption.

Homestead must be established before levy of the judgment creditor. However, homestead is subject to forced sales for property taxes, mortgages on the property, and mechanics liens arising from improvements of the property. Homestead inures to the benefit of the surviving spouse and minor children. Homestead consists of a ½ acre of contiguous land including a residence within a municipality. Outside of a municipality one may claim up to 160 contiguous acres. Homestead also protects personal property to the value of one thousand dollars.

If homestead is sold, the proceeds are considered to retain homestead exemption provided the owner has good faith intent to reinvest the proceeds in another homestead within a reasonable time. In other words, if you moved to a new home, the homestead exemption does not transfer automatically. To receive a new or additional exemption, you must make the application before March 1, of this year. If you have moved from another home within the state of Florida and you had homestead on your previous property, you may be eligible to bring your homestead savings with you.

To be eligible you must apply for and receive a homestead exemption on your new property within two years of leaving your previous homesteaded property and submit a (DR-501T) Homestead Assessment Difference form to the Property Appraiser's Office. However, it is important to note that if the homestead is abandoned, the protection may be forfeited.

Continue reading "Are You Eligible For The Florida Homestead Exemption?" »

A corporation is a separate legal entity, with its own identity. Once funds are deposited into a corporate account, those funds become the property of the corporation. Decisions with regard to a corporation's property are made by the shareholders and carried out by the board of directors and officers of the corporation. Florida law requires that a corporation has a board of directors and that the board exercise all corporate powers. Any action of the board must be approved in a meeting and if no such meeting occurs, then by written unanimous consent of the board of directors. The board of directors has the authority to execute bylaws, which detail the methods through which these decisions and activities occur.

The directors of a corporation are fiduciaries who are entrusted with the activities of the corporation and are held to a high standard of conduct. Under Florida corporate law, a director must perform his or her corporate duties: (1) in good faith; (2) with such care as an ordinary prudent person in a like position would exercise under similar circumstances; and (3) in a manner the director reasonably believes to be in the best interests of the corporation. Courts have noted that Florida law has long recognized that corporate officers and directors owe duties of loyalty and a duty of care to the corporation. A director's fiduciary duties are extended to the creditors of a corporation when the corporation becomes insolvent or is in the vicinity of insolvency.

Fraudulent transfers in Florida are governed by statute:
A transfer made by a debtor is fraudulent as to a creditor whose claim arose before the transfer was made if the transfer was made to an insider for an antecedent debt, the debtor was insolvent at the time, and the insider had reasonable cause to believe that the debtor was insolvent.

Generally speaking, if there is not enough corporate funds to pay all creditors, an "insider" of the corporation cannot get paid before outside creditors.

Continue reading "Fraudulent Transfers In Florida" »

The State of Florida does not impose a personal income tax on its residents. For purposes of Florida property taxes and the homestead exemption, permanent residency is a factual determination made by the property appraiser. Some factors considered are:

1. Formal declarations of the person;
2. Informal statements of the person;
3. Place of employment;
4. The date previous non-Florida residency was terminated;
5. The place where the person is registered to vote;
6. The place of issuance of the person's driver's license;
7. The place of issuance of a license tag on any motor vehicle owned by the person;
8. The address as listed on federal income tax returns filed by the person.

Florida permits a person who has established a domicile in the state, but who also maintains another place or places of abode in some other states, to manifest and evidence such domicile by filing in the office of the clerk of the circuit court for the county in which that person resides, a sworn statement showing that his or her place of abode in Florida constitutes his or her predominant and principal home, and that he or she intends to continue it permanently as such.

Continue reading "Florida Residency Requirements for State Tax Purposes" »