| Subject | Date Asked |
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| estate | 11/20/2009 |
Q: My mother passed away on January 25, 2009. I understand I have to file 1040 and 1041. Her income ...
A: Sorry to hear about the passing of your mother. There are 3 returns that you need to consider from ...
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| IRS Audit | 11/20/2009 |
Q: We are getting audited for specifically Cost of Goods issue, because of a family farm. So there is a ...
A: If the family business was filed as a schedule C on your form 1040, and was not a separate business ...
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| Taxes on Severance Pay | 11/19/2009 |
Q: Is severance pay taxed like regular income or as a bonus?
A: Severance pay is taxed as regular income. However, you can adjust your W-4 prior to the payout to ...
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| Payroll tax liability for C-Corp that's filing bankruptcy | 11/17/2009 |
Q: If I own 50% of the stock in a C-Corp that is filing bankruptcy and the payroll tax liability is ...
A: I assume that you are paying the Trust Fund Recovery Penalty that is assessed to responsible parties ...
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| Is paying someone's medical bills a taxable gift? | 11/16/2009 |
Q: My sick friend D needs $28,000 worth of medical care. My friends and I want to pay for it, but it ...
A: The recipient of a gift does not have to pay taxes on the gift, so the money you give to your friend ...
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| Capital Gains on Warranty Deeded House | 11/11/2009 |
Q: My father, using a warranty deed with reservation of life estate, sold, conveyed and warranted his ...
A: You are right as far as the transfer of legal title goes. Actual conveyance of legal title to the ...
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| gifting money | 11/10/2009 |
Q: If a family member were to give a very large amount (over a million)is there a way to not have to ...
A: First, the family member is entitled to an annual gift tax exclusion of $13,000 per year per person. ...
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| payroll tax withdrawal | 11/10/2009 |
Q: My current employer is withdrawing state (Indiana) and federal taxes, and 401(k) contribution from ...
A: This is a sign of a company in trouble. It is also a sign of the times, unfortunately. Your employer ...
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| Monetary gifts received by Widow | 11/10/2009 |
Q: I have a friend whom recently passed away and left his wife with 3 children. The community has ...
A: This would be treated as a gift for tax purposes. Gifts are not taxable to the recipient. ...
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| Capital Gains on Warranty Deeded House | 11/10/2009 |
Q: My father, using a warranty deed with reservation of life estate, sold, conveyed and warranted his ...
A: If I understand the facts correctly, your dad deeded the house to you prior to his death for no or ...
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| Distribution into HSA from roth IRA | 11/6/2009 |
Q: My wife and I have a HSA health insurance plan and I would like to one time fund the HSA with money ...
A: You can do a direct roll over from a Roth IRA to an HSA account, but it does not make sense. You ...
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| Pell Grant - FinAid ... | 11/5/2009 |
Q: I am trying to get ready to go to college by starting my FAFSA application ... though I am worried ...
A: For this dollar amount, you should should just pay the amount due. It will continue to accrue ...
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| inheritance tax | 11/5/2009 |
Q: We need to have a gun collection appraised for the IRS for inheritance tax. Can anyone do it or must ...
A: You need to use a qualified and experienced appraiser. Look at the appraisal as your insurance ...
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| tax laws | 11/5/2009 |
Q: My wife and I are separated and headed toward divorce. I make about 40,000 this year and have quite ...
A: To see how married filing separately will affect you, you can prepare your return this way and ...
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| 2-member LLC for rental property | 11/4/2009 |
Q: I set up a 2-member LLC with my father and I as members, so we can purchase rental properties as ...
A: I will assume that the property title is held in the name of the LLC already. I will also assume ...
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| Corporate Owned Life Insurance Proceeds | 11/4/2009 |
Q: The LLC is taxed as a corporation. The LLC is the owner and beneficiary of the life insurance ...
A: Under Internal Revenue Code Section 101, Proceeds of life insurance contracts payable by reason of ...
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| Boyfriend/Foodstamps | 11/4/2009 |
Q: Me and my biyfriend stay in the same home with our daughter. I receive foodstamps for me and my ...
A: Food stamps are not taxable and will not affect your income taxes. Any individual seeking legal ...
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| estate sale of real estae | 11/3/2009 |
Q: In advance thanks Dan for taking time to answer my question. My mother passed away in January 09, ...
A: Unfortunately, you cannot distribute a capital loss on a trust tax return. So it never makes it to ...
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| incarcerated spouse | 11/2/2009 |
Q: My question to you is:How should I file my taxes for the upcoming tax season when my husband is in ...
A: Your spouse has to live with you at least six months or you are considered separated for tax ...
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| Tax Issue | 11/1/2009 |
Q: I will try and keep this as concise as possible. I am a 34 year old male who currently owes the IRS ...
A: Avi, Just because you owe over $25,000 does not mean that you cannot have a payment plan. ...
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| being claimed as a dependent | 10/31/2009 |
Q: I'm 21. I've been taking care of myself since I graduated from high school in 2006. I moved on ...
A: Your mom is not entitled to claim you as a dependent under these circumstances. Let her know that ...
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| possible fraudulent claim of a dependent | 10/30/2009 |
Q: My father-in-law has lived with me since 2008. When I filed my 2008 taxes I claimed him as a ...
A: Your first step should be to ask your father-in-law's if he filed and claimed himself. I have found ...
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| incarcerated spouse | 10/28/2009 |
Q: My question to you is:How should I file my taxes for the upcoming tax season when my husband is in ...
A: Sorry to hear that your husband is incarcerated. When you are married you only have two choices in ...
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| Deductions | 10/27/2009 |
Q: I worked as accounts clerk and sale person, as well I studied University in accounting course. Can I ...
A: You can only deduct these expenses if they were ordinary and necessary business expenses. Your car ...
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| Estate Final Return | 10/26/2009 |
Q: My father's estate consists of stocks and there is a fair amount of dividend income. In the year ...
A: The way that I handle this is by setting up an administrative trust for this very purpose. Run all ...
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| Tax Write-off | 10/26/2009 |
Q: I need to know whether sponsoring a local soccer team can be considered a tax write-off. The ...
A: This appears reasonable, but would be based on your particular facts and circumstances. This ...
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| Tax audit | 10/26/2009 |
Q: I am being audited for the last 3 years. I guy who did my taxes I think buffed my return and/or did ...
A: Most states have reciprocal agreements with the feds whereby they share the final results of their ...
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| noncustodial parent claiming minor child as deduction without proper form/papers | 10/24/2009 |
Q: My former husband has claimed our daughter on his federal taxes for the last 12 years, per our ...
A: The form you are talking about is Form 8332 which is a release of the exemption by the custodial ...
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| Inheritance Tax | 10/23/2009 |
Q: My wife's mother in law passed away. She lived in Pennsylvannia. My wife's sister is named the ...
A: The first obligation of the estate is to pay all its debts and taxes prior to making any ...
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| Tax Write-off | 10/23/2009 |
Q: I need to know whether sponsoring a local soccer team can be considered a tax write-off. The ...
A: To be deductible as a business expense, the expense must be ordinary and necessary. It is ordinary ...
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| Tax audit | 10/22/2009 |
Q: I am being audited for the last 3 years. I guy who did my taxes I think buffed my return and/or did ...
A: At a minimum, the tax preparer is liable for the penalties that were caused by his error. He may be ...
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| Short Sale Tax/1099 | 10/22/2009 |
Q: I am trying to buy a property on short sale, but the seller is having a difficult time getting a ...
A: If they pay back less on the loan than was owed they will trigger a 1099 from the bank for income ...
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| Partnership Self Employment Income | 10/22/2009 |
Q: I have a manufacturing client who is an LLC and has two members, both are general partners. Each ...
A: This is correct based on the way that the LLC is currently structured. That is, that both members ...
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| Gift Taxes | 10/21/2009 |
Q: there. I helped my mother sell her house, buy a new one and move into it this year. To do this, I ...
A: The expenses that you incurred to help your mom are personal in nature and are not deductible. One ...
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| S_corp deduction | 10/21/2009 |
Q: 100% S-corp shareholder/CEO owns building out of which business is run. Property is residential, but ...
A: To take a deduction for interest and property taxes the taxpayer must be on title to the property ...
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| Taxes not taken out of paycheck | 10/20/2009 |
Q: I just moved and started a new job a couple of weeks ago at the end of a pay period. I got my check ...
A: It sounds like your check was done correctly. You just did not have enough pay on this check to get ...
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| Interest in partnership | 10/20/2009 |
Q: My husband was a partner in a business and he passed away.His interest in business was transferred ...
A: At the date of your husbands death, his interest in the partnership must be evaluated. You can also ...
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| Use of Company assigned vehicle | 10/19/2009 |
Q: I was issued a company vehicle to use for service and technical support. It is a van that has a ...
A: Your personal use of the vehicle is a taxable benefit that you receive. Your commute for example is ...
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| Inheritance Gift | 10/19/2009 |
Q: My grandfather wants to give me and by brother $60,000 each before his death (he is 82). He is ...
A: The recipient of a gift does not pay any gift taxes. Since you are receiving cash, there is no ...
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| $8000 Tax Credit | 10/16/2009 |
Q: My husband and I are in the process of purchasing a home. I am a US citizen and he is a permanent ...
A: The $8000 credit is the New Home Buyer Credit. To receive the credit you must be a new home buyer ...
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| estate tax | 10/16/2009 |
Q: My wife and I are planning to move from Canada to the US. We are both retired. My wife is a US ...
A: The United States taxes it's citizens on a world wide basis. The estate for your wife will include ...
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| Federal Employment Tax | 10/16/2009 |
Q: I am the owner and sole employee of a Subchapter-S Corporation. Am I responsible for paying ...
A: Technically no. The profits that are distributed to an owner of an S-Corporation are not subject to ...
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| stock cost basis in light of disclaimer | 10/15/2009 |
Q: My mom died 2/01/04. My dad disclaimed her half of the estate in 4/04. I inherited it. In 2008, ...
A: When you say disclaimed, I will assume your dad made a proper qualified disclaimer. If your parents ...
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| Tax deadline | 10/15/2009 |
Q: I worked for my current employer part of the year in 2008 and received a W-2. I also had a ...
A: Gary, For Federal tax purposes you will need to file Form 1040 and the required schedules. As you ...
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