Tax Law (Questions About Taxes) - Corporate Law - Business

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About Richard Fritzler
(Top Expert on this page)

Expertise
Specializing in Business and Corporate taxation. Comparing the advantages and requirements of different business entities, such as Sub-S Corporations, LLC`s, Partnerships (Both Limited and General), Doing Business as a Sole Proprietor, or Using a C-Corporation. Issues regarding K-1 distributions, 1040, schedule C, 1120, 1120s. Are you considering domiciling a Corporation in a low tax state? I can review the benefits and misinformation that exists.

Experience
I have been in the business of assisting business owners in reducing their taxes and liability since 1986. The company is Owelesstax, incorporated, at www.owelesstax.com

Organizations
National Small Business Owners Association.
Publications
Contributing author to "The Corporate Standard Newsletter".

Publications
Contributing author to "The Corporate Standard Newsletter".

You are here: Experts > Business > Corporate Law > Tax Law (Questions About Taxes)

Questions Answered By Expert Richard Fritzler
In Category Tax Law (Questions About Taxes)

Subject	Date Asked

Spouse didnt file	10/15/2009
Q: I am going through a divorce, in that process I have found out that my wife (who had handled all the ... A: As a married couple filing separately dependent deductions are negotiated between the spouses. If ...
Transferring personal property to business.	10/14/2009
Q: I ran my business as sole proprietorship for many years. Then incorporated, S type a few years ago. ... A: Absolutely you can contribute it to the corporation. There are tax implication. You can retain it ...
Transferring personal property to business.	10/12/2009
Q: I ran my business as sole proprietorship for many years. Then incorporated, S type a few years ago. ... A: Although the protocol is specific, the result will be the same. you'll personally pay all the taxes ...
Foreign Owned LLC and taxes	10/9/2009
Q: I hope you can help clear up some questions with foreign owned LLC tax. I am located in South ... A: Uhhh, no that would not be true. Since this is a pass through entity all of the money will be ...
S-Corp	10/8/2009
Q: I want to transfer title (car) from S-Corporation to my name. The owners of the corporation me and ... A: In order to transfer title you'd have to get permission from the lein holder. they might not allow ...
beginning balance sheet and tax law	10/7/2009
Q: My company incorporated and started a corp year on Apr 1. The same bank account was used from the ... A: Tell your accountant that she will do it your way or she is out. You should probably reconcile the ...
C corp to merge into S corp parent	10/6/2009
Q: My wife and I own an S corp. In the early 90s it was a C corp and it had 3 subsidiary C corps that ... A: There are lots of answers that could be given to this question and not all of them would be ...
s-corp	10/3/2009
Q: I currently have an S-Corp set up 2 years ago with a partner. I have since assumed full ownership ... A: Since these are all payments that have happened in the past, the question is: to who were the ...
debt financed distributions	9/29/2009
Q: Under a debt financed distribution filed using notice 89-35 and the optional allocation rule, must ... A: Those notices have to do with how the "individual" characterizes the interest owed on a loan he has ...
1099 contract labor	9/28/2009
Q: I am a sole proprietor and do not have any employees. I contract people out that have normal jobs, ... A: You are obligated to issue 1099's to anyone you pay a total of $600 or more during the calendar ...
Sale of personal auto to S Corporation	9/27/2009
Q: Is there any advantage to selling my personal auto to my S Corporation at blue book value and paying ... A: There is an obvious advantage to the State of Pennsylvania. Since the S-corps money is already ...
debt financed distributions	9/26/2009
Q: Under a debt financed distribution filed using notice 89-35 and the optional allocation rule, must ... A: All Corporate distributions are handled the same. They must be proportional to ownership, which is ...
receiving customer payments for the upcoming year	9/21/2009
Q: We have a client who wants to pay us this year for next years services. We use QB. Is there a way to ... A: Assuming you are on a Cash Accounting method, it is expected that you will pay taxes in the year ...
Subchapter S after 2553 Filing	9/20/2009
Q: Fritzler: Our accountant suggested we convert our C corporation to an S Corporation and filed From ... A: Yes, but this is not the forum to openly discuss the fine details of your specific issues. Feel ...
natural gas leasing	9/18/2009
Q: I live in NJ but own 5 pieces of property in northeast PA. there is a good chance I could receive a ... A: Ahhh, it is so satisfying when I get a question from someone that already sees the light. Yes a ...
Husband/Wife SelfEmployment	9/17/2009
Q: My husband and I own a small acreage and occasionally take a few logs off it for extra income. My ... A: First, Social Security is not a savings account. Nor are you credited for the money that you ...
Business loss	9/15/2009
Q: I hope you can help me. I started an Electronic-cigarette business (LLC) in Oregon selling them ... A: There are variables, let me cover what I can. First, you filed an LLC. If that is all you did then ...
Setting Director's Salaries in a C Corp	7/14/2009
Q: When forming a C Corp, can you be penalized by the IRS for setting your director's salaries too low? ... A: This line of concern stems from requirements that are laid out for S-Corps. This does not apply to ...
Selling Car to C Corporation	7/13/2009
Q: I am the sole owner of a C Corp. Can I sell my paid-off car to the Corp so I can deduct the fuel ... A: You can. Is that the best option? It depends. There are some pitfalls. What price? that also has ...
Multiple C Corporations or Divisions?	7/12/2009
Q: Fritzler, First of all, I want to say how thorough your answers are. I've spent some time today ... A: I humbly thank you for your kind words. Your concerns run the gamut, and there are some concerns ...
investment company tax losses	7/11/2009
Q: I know individuals are limited to $3000 loss from investment losses and I know day traders are ... A: Deductions for deductions sake are bad. If you are making a "business decision" then you always need ...
LLC for rentals?	7/10/2009
Q: I have two rental properties. Presently, I just collect the rent, make repairs, and file my taxes. ... A: I'm going to take the other side and explain why it would be less than effective to go through the ...
LLC operating agreement	7/8/2009
Q: Forming a 3 person LLC. I am doing most of the work and we wish to setup so that the LLC has equal ... A: LLC's don't issue shares, there is no option to create different classes. The owners are members. ...
taxes	7/7/2009
Q: My question is somewhat loaded in its content. My brother and I formed a partnership about 7 years ... A: You are right, you are getting hammered, you are right, self employment tax is a big bite out of the ...
Personal Service Corporation Clarification	7/6/2009
Q: Your prior explanation of PSC taxation was very useful, but I have a follow-up question. With regard ... A: Good try, but. . . If I can take license with the explanation: The term "Personal" would apply to ...
Corp income tax	7/5/2009
Q: An S Corp buys a foreclosed property in March for $100.000. In June it sells the property to a ... A: In a vacuum, the answer is yes, the corporation pays the taxes on the gain at income tax rates. ...
investment company tax losses	7/4/2009
Q: I know individuals are limited to $3000 loss from investment losses and I know day traders are ... A: The answer is no. Corporations apply losses to gains. But if you are losing more than your gaining . ...
Income Tax on a Foregin Memeber of a LLC	7/1/2009
Q: We are a company located in Bangalore, India. We are structured like a US 'C' Corp. Our company is ... A: The LLC will file a 1065 General Partnerhip tax return in the US each year, there is approximately a ...
Sale of an interest in an S-Corp	6/30/2009
Q: I am selling a partial interest in an S-Corp to some of the other shareholders of the S-Corp. The ... A: Absolutely correct. Their Cost Basis is what it costs them. To them it matters not, taxwise, what ...
Amended 1120S - Real estate in Corp	6/29/2009
Q: At that time, he did not start a new QuickBooks file, so his previous preparer did not have a good ... A: Q1: You could file amended tax returns. Were you going to have him hold the property personally and ...
Sale of an interest in an S-Corp	6/26/2009
Q: I am selling a partial interest in an S-Corp to some of the other shareholders of the S-Corp. The ... A: Could you tell me: Are you selling 100% of your interest, which is a fraction of the S-corp stock? ...
husband and wife LLC - North Carolina	6/25/2009
Q: I am doing a IT consulting and formed a husband and wife LLC in NC. Got EIN and it says we need to ... A: The 1065 will provide no different results than the 1040. Neither provides any tax advantage. The ...
Question about HOA and 1120H	6/24/2009
Q: As a new Treasurer to our Home Owners Association, it looks like somewhere around 5 years ago, the ... A: You can download the form for each year from the IRS website. Mail them in with the taxes due, the ...
what intersest is deductable in a c corp	6/23/2009
Q: In a c corp, is the interest on a loan for a work vehicle (100% business use) deductible? Also, is ... A: If it is a reasonable and necessary business expense, the interest paid on the loan is always ...
NYC S CORP,LLC	6/22/2009
Q: I have just read one of your responses, but need it clarified for my situation. A Manufacturer's Rep ... A: Having answered a few thousand Q's over the last 5 years, I don't recall that one. The S corp/LLC ...
LLC or PLLC	6/19/2009
Q: As an attorney going "solo" which is better to form in the state of NY for tax purposes...an LLC or ... A: You decide: Neither provide any liability protection since it your license to practice law ...
LLc	6/15/2009
Q: My brother and I have opened a clinic as an llc and we are equal partners. We pay ourselves a fixed ... A: A multi-member LLC, by default, files taxes as a General Partnership. That is a 1065 form. If you ...
1099	6/14/2009
Q: I am an independent contractor for a brokerage firm and I recieve a 1099-misc from generated ... A: There is nothing legally that keeps you from doing that brokering business as a real corporation. ...
dog breeding	6/12/2009
Q: and would i need to file with the irs as a business. this is going to be a hobby and of course ... A: It is a business, but if you intend to handle it as a hobby it will just cost you extra in taxes. ...
Self-Employment Health Insurance Tax Deduction	6/11/2009
Q: I have a question similar to (although with a KEY important difference), ... A: From your position of a personal tax payer, there are no stipulations that I can find that limit ...
Home office	6/9/2009
Q: Situation: I have started a “C” Corporation about a year ago and am working out of my house. I ... A: I commend you to the Nth Degree on choosing to do a successful business as a Real Corporation. I've ...
Taxes	6/8/2009
Q: How much is the state taxes in CA? Will I be taxed in CA and still own a home in IL? A: California state tax rates go as high as 9.3% on all personal income over $44,815. Below that amount ...
LLC with foreign company member	6/6/2009
Q: Does a foreign company(Cyprus) that is indeed has a tax residency certificate, that is a holding ... A: By default the LLC pays NO Tax. It is a pass through entity and ALL the tax liability pass through ...
Gift Tax	5/24/2009
Q: I received $86,000 from various members of my friend’s family in 2007; they deposited this money in ... A: A 1099 is required to be issued to any individual that was paid over $600 in the year. 1099's come ...
mileage	5/21/2009
Q: Is there a cap by the IRS on business miles that can be driven per month ? A: Well let me start with the obvious, you can't claim more than are on the odometer. The IRS doesn't ...
do i pay myself from my s corp	5/19/2009
Q: I am the sole owner and officer of my Ca. s-corp. I have been inc. now about 5 years. Starting this ... A: This can be a cloudy issue if we don't have a clear understanding of the fundamentals. The S-Corp ...
Rental Property Tax Deductions.	5/19/2009
Q: I am just starting out in rental property investments and I have a deduction question. I know most ... A: Yes, you can and you claim them on the tax return, however, in order for it to be "deductible" it ...
do i pay myself from my s corp	5/18/2009
Q: I am the sole owner and officer of my Ca. s-corp. I have been inc. now about 5 years. Starting this ... A: While I understand your desire, and appreciate your intent, this is not a good path. Doing business ...
International Corporations	5/18/2009
Q: Is there any tax benefit of owing a International/foreign company vs a USA Single owner LLC for high ... A: Setting all the cloak and dagger marketing hype aside; You as a US citizen are required to pay US ...
K-1	5/18/2009
Q: I am a partner in an LLC, since its founding it has lost money so the K-1 showed negative balances. ... A: Yep, welcome to the world of pass-through entities. If the company continues to have positive ...
opening up a medical practice LLC vs S-corp (PC)	5/18/2009
Q: Fritzler, I am in the process of opening up a medical practice in the state of virginia. I am ... A: The LLC has not been "Proven" to limit liability. It could be considered the Phen-Phen of business ...
executive bonus	5/16/2009
Q: Richard, Can you claim a whole life policy as a executive bonus. Also is it claimed in code162 of ... A: Well, you can claim it as an "executive bonus", which means you pay all the income and payroll taxes ...
Asset transfer from Parent company to subsidiary	5/15/2009
Q: We own a parent company (a Texas C Corp) that would like to transfer assets in the form of a water ... A: Is it taxable? No, except. . . The reason and method you are intending on may create a change in ...
about c-corp and medical expenses	3/27/2009
Q: I saw your answer about medical expenses and C-corp: I, the CEO of a C-corp I founded and own 60% ... A: OK. So if we do this, can the corp directly pay the CEO's doctor bills, e.g. dentist, physician. I ...
S corp taxation	3/27/2009
Q: I have an S corp with 2 shareholders, me and my wife, 50/50. In addition to normal salary taken in ... A: Yes the S-Corp can distribute the money to you. There is no additional tax, since you have already ...
Do I need to file estimated taxes for a DBA?	3/27/2009
Q: I have a DBA for my home business and I have over $400 of net income for 2009. Do I need to file my ... A: You have two ways to calculate your quarterly payment. You can take 1/4th of last years profit. . . ...
taxes	3/26/2009
Q: what is the tax consequences of a stock for stock acquisition? When does the holding period for the ... A: If you get a copy of IRS Publication 542 "Corporations" that was published before 2000 (I use 1997) ...
Renting a home	3/26/2009
Q: I work for a company that has offices all over the state. The owner purchased a home close to one of ... A: He's going through a lot of cycles of action that net nothing. If the company leases the house from ...
capital gains tax on s corp	3/25/2009
Q: I have an S corp and own two brokerage accounts; one is a corporate account. Is there an advantage ... A: Since the S-corp is a passthrough entity and you pay all the taxes personally. . . no. If you asked ...
Corporate Payroll Tax	3/25/2009
Q: In 2005, I purchased a company from an individual. The individual had an option to exercise at any ... A: From the IRS's perspective the business has always been yours. You would be required to pay taxes on ...
Schedule C vs 1120S	3/25/2009
Q: As an S-Corporation, what are the conditions for filing a Schedule C versus an 1120S? What are the ... A: As an S-corp you are REQUIRED to file the 1120-s, the 1120-s will attribute soe things to you ...
Health Insurance Tax Credit	3/24/2009
Q: My wife has an illness that prevents her from working. She is currently retired and receives a ... A: Not as an LLC. Not as a Partnership of any kind. Not as a S-corp. You can personally, deduct all of ...
Consulting Income	3/24/2009
Q: I am a consultant and have only received one 1099 this year. Do i need to report any other income ... A: The IRS requires that you pay taxes on your entire income. While it may be compelling to imagine tax ...
Single Entity LLC Interest Expense	3/24/2009
Q: I have formed a single entity LLC to own and rent real estate. I own a personal home that I paid ... A: I understand your intent, and I understand your question, and the answers to your questions is YES. ...
townhome association and income tax	3/23/2009
Q: I am treasurer of a small (12 unit) self-managed townhome association and none of us has experience ... A: This is a question if minuteae. You would only pay tax if you have a net profit. The interest might ...
Tax Filing	3/23/2009
Q: One of my friend has this question. He came from China and now on L1 Visa working for a chinese firm ... A: You are right, those are personal expenses, the tax for which he is liable. Your friends ...
Can Personal Tax Debt affect my Corporation	3/23/2009
Q: I am starting a business with a partner - I believe that incorporating is the best solution. I ... A: It could "Reach over" to your ownership of the corporation. The IRS could foreclose on your stock. ...
EMBA and tax	3/22/2009
Q: My firm has suggested to me that I need to go to get an Executive MBA. Relevant facts: This is not ... A: As your research has shown, Congress has coninued to modify the rues so that individuals have no tax ...
LLC and salaries	3/21/2009
Q: My husband and I operate an office cleaning business in Tennessee. In the past, to buy our house, ... A: The rules have become tighter on home mortgages. while your mortgage person is on the right track, ...
Daycare Business Taxes	3/20/2009
Q: I operate an in home daycare. For this upcoming year, I anticipate having $20,000 in taxable income. ... A: The best way to afford the house is not going to be found in trying to craft your in home business ...
K-1 Distibutions S Corp.	3/20/2009
Q: I was the majority share holder in an S-Corp. I sold my shares in Dec. 2007. The 2007 company tax ... A: Yes, you are obligated to pay the taxes on the profit that was "Attributed" to you. Keep in mind the ...
How to offset unrimbursed expenses when actively involved in LLC?	3/20/2009
Q: I have received a K-1 from a LLC and I have been actively participating in the LLC's business ... A: An amendment "Could" increase your likelihood of an audit. It "Does" extend the statute of ...
Sub S general questions...	3/20/2009
Q: I'm new to the whole business ownership (S corp) thing and just wanted to clarify a few issues: 1. ... A: Of the $75k how much of that do you need to cover: Personal rent, groceries, utilities and vehicle ...
RE; 1099 for partnership	3/19/2009
Q: have a Vendor with a Federal ID# - LLC Partnership. They would like the 1099 for this coming year to ... A: I am as lazy as the next guy, but . . . They are asking you to issue 1099's to people that you did ...
Who Should We Turn To?	3/19/2009
Q: My wife and I find ourselves in the uncomfortable position of not wanting to go back to our old ... A: The link I sent you was set up incorrectly. AS I said we just found it ourselves and my webmaster ...
2 schedule C's?	3/19/2009
Q: I have a carpet and upholstery cleaning business and I'm a S Corporation and Incorporated. I'd like ... A: Are they profitable? If so, you should reconsider your plan. S-corps and LLCs are designed for ...
W-2 and 1099 forms	3/19/2009
Q: Mr. Fritzler, I am offered an opportunity to work for a professional corporation with 4 locations. I ... A: Problems? Oh sure. . . Do you know why they want to convolute this? I can tell you. If you work ...
Mileage Reimbursement	3/18/2009
Q: I have a question that I hope you can help me with. I work for a company based in Baton Rouge, La ... A: The IRS is very clear that mileage from home to office and office to home are personal miles, and ...
Corporate Tax Lien - Am I personally protected?	3/18/2009
Q: The state of NY has placed a tax warrant/lien on my former corporation. It's for the state franchise ... A: Tax collection is a dicey area. The IRS and the department of labor have actually held anyone that ...
Sub S general questions...	3/18/2009
Q: I'm new to the whole business ownership (S corp) thing and just wanted to clarify a few issues: 1. ... A: 1. Not beyond a shadow of a doubt, but most businesses do, with no problems. Of course it also ...
1099a	3/18/2009
Q: I received a 1099a from a bank that took possession of a business property that I was redeveloping. ... A: $3000 applies to personal capital losses, whether they were in the stock market, real estate, or any ...
Fulltime Grad Sudent	3/17/2009
Q: I'm going to grad school fulltime this year. I'm single and I own a house which I bought 4 years ... A: You are already a zero for taxes. Imagine that taxes are heat, and you don't have any. That is known ...
How to offset unrimbursed expenses when actively involved in LLC?	3/17/2009
Q: I have received a K-1 from a LLC and I have been actively participating in the LLC's business ... A: Best Practice would be that you get reimbursed by the LLC for the receipts of the LLC. That would ...
LLC 1065 filing	3/17/2009
Q: Facts: LLC created in 2008, that has three members. The LLC operates a rental property. The ... A: Are you the partner that is not on the deed? if so, you have nothing and have simply been giving aid ...
Depreciation	3/17/2009
Q: I'm currently working on our 2008 tax return and a couple of question have popped up. 1. we ... A: The Remodel was all yours. The Business can't claim it as a business expense. And since you didn't ...
S-Corporation	3/17/2009
Q: I'm told that an S-Corp pays no corporate tax, rather that the taxes are paid through the ... A: You used $10 million of income in your example, and only $1 million of payroll. which would leave $9 ...
C-Corp change of ownership and NOL	3/16/2009
Q: Richard: Thanks for taking my question. My client purchased a C-Corp in Nov 2008 (in home ... A: (Edit: I did not address the application or non-application of section 382 to this question, that ...
LLC 1065 for 2007 not filed	3/16/2009
Q: We have a two member LLC that had no revenue in 2007 and tiny expenses. We did not file a 1065 with ... A: There are no penalties if there are no taxes due. Filing a tax return allows you to document those ...
State tax deductions	3/16/2009
Q: One of the reasons businessmen get LLCs and incorporate in places like Nevada is too avoid state ... A: To adequately explain, I'm going to have to dissect your question. Please don't think I'm trying to ...
Tax treatment of grant funds	3/15/2009
Q: my husband is in post-doctoral fellowship and received grant money for a 5 month period. The ... A: W-2's and 1099 are intended to notify the IRS that you were paid money. You are sent a copy as a ...
Is per diem taxable	3/15/2009
Q: I am a sole proprietor and worked a job as a sub contractor in Texas for 9 months during 2008. My ... A: The per diem is intended to be a reimbursement of expense. . . without having to keep all the ...
1099a	3/15/2009
Q: I received a 1099a from a bank that took possession of a business property that I was redeveloping. ... A: Well yes that is a capital loss. A very large loss. At $3000 a year limitation, it will take a long ...
2 residential sales in one year-capital gains	3/15/2009
Q: In 2006, I sold my primary residence which I had been living in for 2.5 years for a plus 180K. I ... A: Yes. You are an example of why the rule was written the way it was. Obviously, the 2 out of last 5 ...
cap gains real esstate	1/7/2009
Q: Capital Gains on Real Estate I need info regarding a rule that may apply in our case. We sold our ... A: Multiple taxes. you have experienced a "Gain" (the difference between your original purchase price ...
Loss on Startup in LLC	1/6/2009
Q: Facts: LLC formed in 2005 to develope and sell a software product. 2 members in the LLC. After 3 ... A: Long term capital losses are deductible against long term cap gains. $3000 of capital losses can be ...
Claiming allowances on taxes	1/6/2009
Q: I have an Uncle who said for me to claim 8 in allowances on my taxes due to the fact that the ... A: Payment of all the past taxes, penalties of 50% and Interest. Being a Tax Protestor is a Career (a ...
Sole Proprietor incorporates	1/5/2009
Q: I have a sole proprietor that incorporated without my input. Proprietor had loan on the books that ... A: You could just not pay the loan. No tax event. I imagine that the "Loan" fails the test of being a ...
death of sole proprietor, annunity taxation, etc	1/4/2009
Q: I have questions in three possibly distinct areas. Maybe you can answer at least a couple.... 1) ... A: 1) My domestic partner is the sole proprietor of an online business. If she leaves her business to ...
two member LLC - earning way in for partner	1/4/2009
Q: Mr. Fritzler, my fiance and I have a two member LLC in NC that owns a small retail business and the ... A: Your accountant is arrogant and ill informed. The closest I could bring those statements into ...
taxes on sale of business	1/4/2009
Q: If a family business is a c-corp and the stock was gifted to me with original value of 10,000 and ... A: If you received the stock at a value of $10,000, that is your basis. Appraisals have little value, ...
Business startup question	1/4/2009
Q: I'm planning to start a new business purchasing and re-selling antiques with my daughter. I have a ... A: Let me bust a far too common myth. Deductions are NOT good. Deductions only make bad things less ...
Loan to Small Business - Repayment	1/3/2009
Q: I have an LLC with a partner, in order to start the business I made a personal loan to the ... A: This would NOT put you in a better tax position. While interest on a business loan is tax ...
Capital Gains Taxes on Donated LP interest	1/3/2009
Q: We have a DE Limited Partnership. Limited Partner is Mother and General Partners are Daughter and ... A: Hmmmm, donated is not the right word when it comes to transferring assets between individuals. That ...
Personal Income and my LLC	1/2/2009
Q: How are you? I work for a company as my normal 9-5 job. In 2008 I started by own online business ... A: Fro tax purposes you are a sole proprietor. Filing an LLC did not change that since the LLC is a ...
Bartering	1/2/2009
Q: Can a hotel and an advertising agency barter without going through a barter exchange? If so, who ... A: If we all take one step back and consider: What if we just ignored the person that stayed in the ...
LLC Taxed as S-Corp good or bad?	1/2/2009
Q: I formed a sole-member LLC in 2008. I would prefer to keep it a sole-member LLC due to the paperwork ... A: You are asking me if you are better off with 1 lump of sugar or 2 lumps of sugar in your cup of ...
Personal Use of Company Owned Vehicle	1/1/2009
Q: Fritzler, I am the sole owner of my S-Corp. The S-Corp owns an SUV that I use 80% for business, 20% ... A: As a fringe benefit that gets applied as wage, it is also subject to all the employment taxes. ...
Expenses Incurred for Foreign Travelling	1/1/2009
Q: MY client is a company assessee and hav reimburse expenses to a person who is not an employee of the ... A: If this truly an arms length arrangement, then all details are derived from the contract between the ...
File in NC or CA	12/31/2008
Q: I live in both NC and CA 6 months of the year. I have a subchapter S corp (NC) that hold 10 units ... A: Where is it best (cheapest) to file taxes? As a Real Corporation in Nevada. . . But you make it ...
S-corp and capital losses	12/31/2008
Q: I have an S-Corp that was holding stock and took some significant losses in 2008. The losses are ... A: They do not off set ordinary income in a Real Corporation, nor do they in a S corp. However, as you ...
s-corporation shareholder distributions	12/31/2008
Q: If an S-corporation makes a distribution to a shareholder to pay federal and state income taxes, can ... A: The Pro-Rata Distribution is not simply an IRS mandate. The base requirements of a corporation ...
Independant Contractor	12/30/2008
Q: I'll try to make a long story short here. I received my real estate license last year and 2008 was ... A: I think it is great that you have chosen to do your own taxes, you'll be far better prepared to run ...
S-Corp K1 tax liability	12/30/2008
Q: I am a co-owner in an S-Corp where we have approx $45K to distribute for 2008 SEP IRA contributions. ... A: Once the year ends, the year has ended. The road to high taxation is paved with intended payments ...
1099-C	12/29/2008
Q: As a medical office practice manager, I have been told at various seminars that we can write off a ... A: Assuming that you have not structured your client management model to provide this benefit, then ...
section 179	12/29/2008
Q: I am a sub S corporation. I plow snow I work by myself, I also work a full time job. I am ... A: I can't seem to find that passage on the IRS website. If you are taking the advice of a self ...
can lease option payments be tax deductible?	12/29/2008
Q: I currently pay 4000.00 a month for rent. That's 48000.00 dollars a year I can't write off on my ... A: Living and lifestyle are not deductible. Leasing, or renting your personal residence is not ...
Self-employed 401k	12/29/2008
Q: I am s corp owner. I set up Self-Employed 401k account. I am not clear that the employer ... A: Where to start?!! Let's start with: the 401k provides little or no real tax advantage. It is a "tax ...
Company went bankrupt	12/28/2008
Q: My wife works for a company in Ohio that went bankrupt The company owes each employee 3 weeks pay ... A: Payroll will be the highest priority for the Bankruptcy Court. The Bankruptcy process is to ...
section 179	12/27/2008
Q: I am a sub S corporation. I plow snow I work by myself, I also work a full time job. I am ... A: Section 179 is only available from the profit of the business, if you are not profitable you are not ...
LLC - single or multi-member	12/27/2008
Q: My wife and I recently bought a farm and created an LLC to manage it under. We would like the ... A: You could file articles of dissolution with the state inwhich it was formed. Or just not pay any ...
HOA's requirement to file with IRS	12/27/2008
Q: Richard, I came across your answer to a previous HOA question and it looks like this is in your ... A: (((Oops, Amy Madigan is an actress. The reference was actually Kathleen Madigan.))) There would ...
s corp	12/25/2008
Q: If I am listed as a VP in a S Corp, am I liable for debt if the company fails? A: Debts; You could be liable if you personally guaranteed anything. Unpaid Taxes (more important); If ...
LLC, S-Corp, or C-Corp	12/23/2008
Q: Richard, I recently started a business as an independent consultant. I provide project management ... A: I am going to assume that you have read some of my other posts; and that is why you are posing this ...
Business formation	12/23/2008
Q: I am starting a small roofing business in Kansas. I will subcontract all employees and do approx. 1 ... A: A hammer is a hammer is a hammer, isn't it? Of course not and to make a general statement that one ...
S Corp Termination of Shareholder Interest	12/23/2008
Q: Have you had to elect under section 1377(a)(2)? This is using two separate tax years (one before ... A: I can't say I fully understand the questions, but if I do understand it. . . We are not talking ...
Sub S Corp in CO / Living in FL	12/23/2008
Q: I currently own and take salary and profits from a Sub S Corp in Colorado. I will soon be moving to ... A: The state has a right to tax and regulate all of its residents. Domicile is certainly one way to ...
corporate	12/22/2008
Q: I have C-corporation registered in New Jersey. To the best of my knowledge, officers of the company ... A: You have taken a little literary license. I believe you would be closer to the truth by saying that ...
Taxes, Foreign Business working for U.S. company	12/21/2008
Q: I have a question about taxes for foreign companies doing contracted work for the U.S. business. If ... A: We have to separate expenses and distributions. And expensing to an owner may be deemed a ...
UMBRELLA CORPORATION	12/21/2008
Q: A client of mine is looking to file an umbrella corporation, to house two or three other ... A: If your client is successful at following through with their master plan, they will be very ...
HOA's requirement to file with IRS	12/21/2008
Q: Richard, I came across your answer to a previous HOA question and it looks like this is in your ... A: If you have done nothing to formalize the HOA it is a general partnership by default. The ...
LLC terminated and business closed	12/19/2008
Q: I am looking for information about tax issues with closing down a LLC with two members, 1.5 years of ... A: I can understand the desire to make something good out of this less than good business situation. ...
company form for rental property	12/19/2008
Q: Mr Fritzler, My wife and I own 2 houses (1 with mortgage, 1 with mortgage paid off) and we are ... A: My reference to "REAL" corporations as opposed to pseudo corporations: Real corporations pay their ...
LLC for Realtors	12/18/2008
Q: I am a real estate agent who formed an LLC in 9/08. I was paid commissions as a self-employed ... A: I have spoken to many Realtors, Prudential Realty actually had us speak to their key agents in each ...
c-corp medical premium deduction	12/18/2008
Q: I recently set up a c-corp which is owned by my husband and I. My husband has a full-time job ... A: No, the corporation does not own the asset and cannot depreciate it. You pay taxes at regular ...
LLC - single or multi-member	12/18/2008
Q: My wife and I recently bought a farm and created an LLC to manage it under. We would like the ... A: At the end of these cycles of action, you will find the LLC has provided you no real benefit. It ...
How detailed do I get on my Form 1120 Other Deductions Schedule?	12/17/2008
Q: On From 1120 - Line 26, Other Deductions, I wonder what's the general guideline for how detailed I ... A: Your tax return will be entered in as data in a computer. The computer will deal with the numbers, ...
Employee Bonsuses	12/17/2008
Q: The Tribe wants to give out bonsuses to its employees (6) at $300.00 for Christmas. We have an ... A: Bonuses are handled and taxed just like payroll. All the same taxes, all the same withholdings, all ...
S-Corp deduction for Franchise Fee	12/17/2008
Q: My wife and myself recently started to acquire a franchise. We paid the franchise fee $25,000.00 ... A: You have experienced a "Capital Loss". If you close the S-Corp, you can put the $25,000 against ...
LLC taxation & agent renewal	12/17/2008
Q: I currently work as a freelancer and an independent contractor and I created a Nevada LLC years ago ... A: Sorry, I answered this quite a while a go but it must not have registered, so it has been ...
Stock basis	12/16/2008
Q: I have participated in an employee stock purchase plan, with a DRIP, for many years. I have kept ... A: This question was abandoned by whoever you sent it to. I found it and wanted to get you an answer. ...
Small Business Deductions	12/16/2008
Q: My 13 year old son and my 14 year old son helped me during the year on my side business. I ... A: AS casual labor, you can pay someone up to $600 per year without having to withhold or report taxes ...
Taxable % of personal auto usage	12/16/2008
Q: I have an executive that I need to calculate the % of the personal usage of his vehicle. I cannot ... A: The percentage is gathered from the driving log, where he kept track of every trip he took, from ...
LLC's	12/16/2008
Q: I recently sent up two LLC's to separate a few rental's. My husband and I are the only two members ... A: When you say "separate a few rental", what do you mean? Many people have been told the LLC can ...
LLC providing a personal loan	12/15/2008
Q: My question is hopefully a simple one. My parents own an LLC with holdings on multiple buildings in ... A: Starting with the fundamental: In order to be a valid loan, there has to be a "Note", and "interest ...
RE interest writeoff	12/15/2008
Q: I am a 12% partner in an S Corp, "company A". I was my understanding that "Company A" wanted to buy ... A: Do you want out? Or do you want in? What is the relationship of the players? Were you looking to ...
business tax filing on closed business	12/15/2008
Q: We closed our business in Oct. of 2008. This business operated at a loss for all 6 years it was ... A: The answer to that question is "Yes" file a final tax return. Here are the unasked questions: ...
c-corp medical premium deduction	11/25/2008
Q: I recently set up a c-corp which is owned by my husband and I. My husband has a full-time job ... A: OHHHH, congratulations. It is far too rare that I hear of someone choosing to do business as all of ...
change of llc from three 3 to one foreign corporation member	11/25/2008
Q: Richard We are an llc in South Carolina. On November 1st the foreign corporation member bought out ... A: LLC's are pass through entities and as such are always on a calendar fiscal. Tax Pitfalls? Oh ...
Homeowners Association Taxes	11/25/2008
Q: Last year I became Treasurer of a single family home Homeowners' Association, replacing someone who ... A: Addendum: When I suggested that the HOA might deplete it's reserves on improvements, I would not ...
Owner Finance Payment Taxed	11/25/2008
Q: I bought a business and the owner is financing without interest. I make a $20,000 payment a month. ... A: Why? because you are using that money to make an investment. Investments are done with "After Tax" ...
sole member LLC: adding member or transfering ownership in NJ	11/24/2008
Q: I have a sole member LLC in NJ. I set up the business so that my 17 y.o. son could "take over" his ... A: The Grunt working for the state of New Jersey is mistaken. Your son can own an interest in an LLC. ...
sole member LLC: adding member or transfering ownership in NJ	11/24/2008
Q: I have a sole member LLC in NJ. I set up the business so that my 17 y.o. son could "take over" his ... A: Well Tammy, A "single member" LLC is defined as having only 1 member. If you added him as a member ...
S-Corp Sale - Capital Gains Tax	11/23/2008
Q: I help 25% share in an S-Corp in 2003 and 2004 (filing K1s) when it changed name and EIN but ... A: I know you would like it to be a long term gain, taxed at a lower rate, but. . . You could always ...
Homeowners Association Taxes	11/23/2008
Q: Last year I became Treasurer of a single family home Homeowners' Association, replacing someone who ... A: The First Problem is you aren't asking enough questions. Your accountant gave you a plan, but ...
LLC taxation for owners in name only	11/23/2008
Q: A friend and I are forming a small company (an LLC). The company owners will be listed as two of ... A: The 2553 form is a "Sub-S Election" which does define it as a passthrough entity. They would be ...
LLC Tax and Out of State Member	11/22/2008
Q: I have an LLC domiciled and formed in Wyoming. The Wyoming LLC has started an Internet business ... A: I'm going to assume that you have allowed the LLC to be taxed as a pass through entity, which is the ...
s corp and taxes	11/21/2008
Q: how are you? i have my s corp setup in delaware. currently i have a contract with a company which ... A: My name is Richard Fritzler, another expert on All Experts and your question was forwarded to the ...
FEderal ID request and Personal Taxes	11/20/2008
Q: Can you get a Federal Tax ID under your SSN (Treasurer for a non profit)if you personally have a Tax ... A: There seems to be two questions here. First, as a treasurer of a non-profit, you would not get a tax ...
s corp in delaware	11/20/2008
Q: i have a friend of mine who said he setup a s corp in Delaware and he was able to buy an address. ... A: Your friend failed. You can certainly file a corporation anywhere, you can even rent space in any ...
Trading as a partnership	11/19/2008
Q: I am about to go into business day trading with another individual. I am looking for advise on what ... A: Taxes only apply if you are profitable? Do you intend to be profitable? Partnerships of all kinds, ...
Doing taxes as a Sole Proprietor	11/19/2008
Q: I have just started a housecleaning business in Oregon and I am uncertain about where to start in ... A: Congratulations on jumping into entrepreneurship. Being in business is GREAT, however the way you ...
Business	11/18/2008
Q: The Government is planning to increase taxes what are the consequences of that on a business A: Glena, This question was transferred to the AllExperts Question pool. Obviously it is very open ...
C corp loss	11/18/2008
Q: I was wondering if there is any way to take a substantial 2006 loss in a company (c corp in 2006) ... A: I realize that the strip mall accounting dogma always pushes everything to the personal tax return, ...
Gifting Money	11/17/2008
Q: I know I can give my son $11k per year and my wife can do the same. But can I give my future ... A: Yes, and if you were so inclined you could gift me $11,000. But. . . why all the gifting? Is it to ...
Ownership of Rental Property	11/15/2008
Q: My son and I inherited a home which we own 75/25. We intend to rent it. My question is about the ... A: Because you own it jointly, you are already a general partnership by default. If you go with this ...
TREATMENT OF PROFITS	11/12/2008
Q: I have loaned my small company moneys over the years. I had a small profit this year and I wanted to ... A: Unless the small company is a Real corporation, you have effectively loaned money to yourself and ...
Adding LLC "members" from outside the US	9/23/2008
Q: We currently are operating an LLC out of the state of Arizona for our software organization. We ... A: To answer your explicitThe LLC would be obligated to withhold (and pay to the IRS) 30% of the money ...
S Corp profit disbursements	9/22/2008
Q: I appreciate your time in answering my question. I live in Texas and on August 1 became a partial ... A: I'm not trying to be evasive or hard to understand, I am just trying to be accurate: There are no ...
per diem laws	9/21/2008
Q: Can a sub contractor charge a contractor more on per diem than they pay their employees? Our ... A: The two agreements aren't really related. Agreement 1 between you and your employer: You ...
S Corp profit disbursements	9/20/2008
Q: I appreciate your time in answering my question. I live in Texas and on August 1 became a partial ... A: Your disbursement of the "tax liability" is well defined. At the end of the year, you will be ...
non-profit organization tax-exempt	9/19/2008
Q: we are a non-profit organization located in LA, CA. We own a commercial building and lease the ... A: It is not tax exempt. This would be subject to the UBTI (unrelated business taxable income). You ...
Shareholder buyout issues	9/19/2008
Q: I have a C-Corp client that has 6 shareholder/owners. It is an electrical contractor business and ... A: I'm going to start with part 2: The purchase of stock is made out of capital (after tax dollars). ...
Notice form Delaware revenue division that I didn`t file Personal income tax for 2004-2007	9/19/2008
Q: I'm a bit confused with this notice I got from Delaware revenue division, about not filing and/or ... A: Normally, when winding up a business it is expected that you mark the last tax return as "FINAL ...
Foregiveness of Interest on Notes	9/18/2008
Q: We are cash basis. We loaned a company $90,000 on a secured interest bearing note. They quit paying ... A: What was the collateral for the "secured" note? The unpaid interest would be transferable to the ...
Hi	9/17/2008
Q: I want to know when you start a sole propritorship. Im will be doing business in Little Rock ... A: A sole proprietorship is the default business structure if you do no planning. The first time you ...
Business Expenses	9/17/2008
Q: I'm a self-employed website designer. Can I deduct the following as business expenses? - Laptop ... A: First: are you profitable? If you are not, then the deduction does not do any good for the business. ...
corporation start-up phase	9/17/2008
Q: We v been incorporated May 1, 2007 and started renovation & improvement of leasehold property in ... A: The IRS will not allow the business to deduct payments to individuals without a completed 1099. The ...
Paying and Collecting Taxes on Consultants	9/16/2008
Q: I have been a consultant and am now an account exec with a staffing and recruiting company. My ... A: As to What to bill the customer? That should be decided and stipulated in the contract, whether the ...
Per Deim Rates	9/16/2008
Q: I am a contract employee. The company I work for is located in Boston, Ma. The company I am assigned ... A: No. They can pay as much or as little as they can negotiate. The GSA perdiem is really a Maximum ...
corporation start-up phase	9/16/2008
Q: We v been incorporated May 1, 2007 and started renovation & improvement of leasehold property in ... A: The corporation is required to file a tax return every year. Filing for 2007, will allow you to ...
Taxes and Artists.	9/15/2008
Q: I am a working artist who like most creative folks, has a full time day job as well to make ends ... A: The potential for audit and the potential to lose in an audit are two separate concerns. Obviously ...
Tax benefits question	9/1/2008
Q: I am a non-resident alien (on L1 visa) working in Texas. I would like to know if I am eligible to ... A: Nope. The deduction only applies to a primary residence (that home that frequent more than 50% of ...
Question about DBA and taxes	9/1/2008
Q: Wellman, I live in Massachusetts and I am considering opening a DBA company and I am a little ... A: This not Mr. Wellman my name is Richard Fritzler I am an expert here on all experts and I see that ...
1120S	6/27/2008
Q: I understand where retained earnings come from(accumulated earnings over years). But when it climbs ... A: Any retained earnings, would normally be added to investor equity. Since they already paid the taxes ...
LLC Contribution for Interest	6/26/2008
Q: 2 members are starting an LLC, 1 Member is contributing $75k in cash as initial capital contribution ... A: Allow me to point out that capitalization is not a taxable event. So your contribution or his ...
C CORP ASSET/GOODWILL SALE	6/26/2008
Q: BOTH SELLER AND BUYER HAVE A LIST OF SALE ALLOCATION (FUN.& FIX., PERSONAL PROPERTY, AND GOODWILL). ... A: Asset sales by a C Corp are reported on Form 4797 with capital gain/loss transferring to Schedule D. ...
2nd home tax implications	6/25/2008
Q: I would like to buy a second home for my in-law in Kentucky. Our principal residence is in ... A: Is your annual income derived as a w-2 salary, or are you in business? Contrary to commom belief, ...
Married couple residents of two different states	6/25/2008
Q: I recently bought a home in Florida and my husband owns a home in Wisconsin. Can we (as a married ... A: You can each sell you own home and get a $250,000 exemption. You cannot both sell one home and get a ...
Married couple residents of two different states	6/24/2008
Q: I recently bought a home in Florida and my husband owns a home in Wisconsin. Can we (as a married ... A: Like I said, If you can live by the rules then it is theoretically possible. To clarify on the ...
Can any of these things be advantageous to us tax-wise?	6/23/2008
Q: My husband works for a private environmental firm as a geotechnical driller. He's out-of-town 80% ... A: All of the money that is given as Reimbursement is tax free. I can't think of a greater tax ...
Selling sole proprietership business	6/21/2008
Q: I am selling a furniture business for $55,000 in July, 2008. Apparently, I have some leeway ... A: Allow me to describe the tax situation for the buyer: He is going to pay with after tax dollars ...
Married couple residents of two different states	6/21/2008
Q: I recently bought a home in Florida and my husband owns a home in Wisconsin. Can we (as a married ... A: Well it is theoretically possible, however, married or single is not the determinant. Job, length of ...
Single Member LLC: S-Corp vs Disregarded Entity	6/20/2008
Q: I have formed an LLC for the purpose of giving away my home via an essay contest a la 'Spitfire ... A: You might want to make sure of your footing on charging a fee for entry into drawing for a prize. ...
State Income Tax	6/19/2008
Q: I have a few questions regarding state income taxes and whether I should register a business as an ... A: "Time of residence" in a state, is only one criteria to determine, another is "Have a Job". If you ...
state taxes on sale of business	6/18/2008
Q: I moved to Arizona from Florida in Dec of 2007, having hired a person to manage my business in FL ... A: I would recommend that you do all that you can to remove yourself from being considered and AZ ...
LLC/Buy-In Opportunity/Personal Loan & Taxes	6/18/2008
Q: I have been offered an opportunity to buy into my company which will be a multi-member LLC entity in ... A: According to the tax code you are eligible for interest deductions for investment purposes that do ...
Startup Help please	6/17/2008
Q: I am currently located in Massachusetts and planning to start my home based business to provide the ... A: For tax purposes, the LLC is considered a "disregarded entity". What does that mean? that means that ...
Convert Sole Proprietorship to S corp	6/17/2008
Q: I have been S Sole Proprietor for 15 years. Last year, I set up an S corp, plan to continue my ... A: Well . . . What assets are we transferring. The "business" is not an asset, the inventory, the ...
Comparing taxes on profits from commodities futures investment profit	6/16/2008
Q: I'm trying to decide if I should trade commodity futures as an individual or form an LLC and trade ... A: I have to start with: "the LLC is a disregarded entity", the IRS does not recognize it. Why start ...
NYC jobs make S-Corp less attractive?	6/12/2008
Q: I'm going through the standard LLC vs. S-Corp debate - I understand you strongly advise towards ... A: Wow, you really set me up with the worst case scenario: As you have described it, a lesser man would ...
Sale of closely held S Corp	6/12/2008
Q: If a Mom & Dad wanted to sell their auto repair business (S Corp) to their son (Who works in the ... A: This really more of topics for discussion than questions that have hard and fast answers. For ...
Commute Mileage for Field Sales Professionals	6/10/2008
Q: I am a field sales professional for a high tech company in the US. My company doesn't have a field ... A: Yes. If you are using and claiming your home as your primary business location, then traveling to ...
LLC taxing of consulting jobs within LLC	6/10/2008
Q: My friends and I have sole proprietor consulting situations. We are considering forming an LLC in ... A: Reasons 1 and 2 are good solid reasons to formalize your business model. However the LLC is not ...
LLC taxing of consulting jobs within LLC	6/7/2008
Q: My friends and I have sole proprietor consulting situations. We are considering forming an LLC in ... A: I can empathize with the confusion, in your description you have appropriately pointed to a number ...
LLC and personal taxes	6/7/2008
Q: I recently started an LLC with three other members. I would like to plan ahead and keep track of ... A: The IRS does not recognize the LLC. Their term is "Disregarded Entity". Since you are a multi-member ...
How to ensure my fiance' is not liable for my tax debt	6/6/2008
Q: I am currently engaged, and owe some back taxes that I pay on each month. However, I do not want my ... A: Be assured that the person that said a Prenuptial is satisfactory, is not giving the most sound ...
disguised sale???	6/4/2008
Q: First I am trying to determine if in fact this is a sale or contribution. Partner A contributed ... A: The first part of your explanation is correct, both partners made a contribution (we'll discuss ...
Tax ID Number	6/4/2008
Q: I am self-employed as a freelance camera operator and editor here in Los Angeles. I have been ... A: Since you are in business, as a camera operator, you are already expected to file quarterly. Failure ...
Gain on The Sale of a Business	6/4/2008
Q: We have made a land and asset purchase of 14 million dollars. The business that operates on the ... A: Tax rates very so much depending on whether your are married, single, filing jointly or filing ...
401k and S corp.	6/3/2008
Q: and thanks. I have resigned from my job of 24yrs., I am 45yrs. old, have a 4yr old daughter and am ... A: If you are willing, I am willing to commit more than just this brief exchange of e-mails. Some of ...
Washington LLC agent	6/2/2008
Q: My question is this: My sister has a consultant business set up as a LLC. I plan to piggyback on ... A: May I ask why you would want to "Piggyback" your business onto hers? For tax purposes the LLC is a ...
setting up as a ranch or farm	6/2/2008
Q: NV a town an hour outside of Las Vegas. I was wondering how do you go about setting up my ... A: Well, you can certainly farm your ground. Were you looking for a Farm Loan? a loan designed to ...
Late 1099's	6/2/2008
Q: I failed to mail out 4 1099's to 4 of my sub-contractors. Its totally my fault. Now that I'm ... A: Well, regardless whether they received the 1099, they are still obligated to file a correct tax ...
Complex: PER DIEM Reimbursement - Deductibility	6/1/2008
Q: I work as a Consultant for an END CLIENT through several 'layers' of consulting companies. Here is ... A: Per diem is a Per day rate, regardless, what was actually expensed. The Per Diem rates and ...
1099 vs W4	5/1/2008
Q: When is one an employee or independent contractor? A: Well Tom there are so many ways to answer that question, but I think you are looking for the ...
Corporations/LLC	4/28/2008
Q: I have a question about setting up a corporation or LLC (Limited Liability Company). I have an ... A: I'm not sure who you sent this question to, since it ended up in the "Question Pool" so let me ...
Form 1041 Line 20 Exemption- Definition of "all income"	4/7/2008
Q: Am self-preparing my late father-in-law's Residuary Trust return. Am stumped by whether it ... A: Whether or not the trust is required to disperse all income or not is stated in the trust document. ...
selling personal property with primary residence.	4/6/2008
Q: I am selling my primary residence for $300,000 for house, and $50,000 for personal property (none of ... A: You will have to reference it on your tax return, otherwise you may get a NastyGram, also known as a ...
tax	4/6/2008
Q: I am on ss/retirement My wife had a bussiness in 2007. She was closing in aprox 6-17-2007. On Dec ... A: That was not long winded at all. I hope she is on the speedy road to recovery, my father went in for ...
Using My LLC	4/4/2008
Q: I hold a full time job and have a couple of rental properties. I handle all the property management ... A: "Is there a Point?" Exactly. You have done nothing to change your tax disadvantage. Nor have you ...
Taxes	4/4/2008
Q: "I have an S corp. I need to pay quarterly taxes personally. How do I legally obtain cash from the ... A: When you say "Cash" do you mean $100 bills? This is not an advisable way to pay the taxes. If you ...
S-Corp	4/3/2008
Q: I have an S Corp and I am the only owner. Last year I had a loss of $20,000 which I reported on ... A: You obviously are starting to see some of the problems with the Sub-S, that these losses once ...
LLC for a personal residence?	4/3/2008
Q: I am trying to buy a 2 bedroom condo in Hoboken, NJ (north jersey). I would bring in a tenant to ... A: The LLC would do either Nothing or make things more complicated and costly. And it would do those at ...
International Tax	4/2/2008
Q: I have a customer from India. Our invoice amount will be $ 500. In India they are required to pay ... A: I believe that India and the US have a tax treaty that in insures there is not the appearance of two ...
TAXABLE INCOME FOR NON PROFIT	4/2/2008
Q: If a Homeowner Assoc. received a one time payment of $ 72,000 for the use of land that belongs to ... A: Even though your HOA is set up as a tax exempt entity, it is still subject to the UBTI (Unrelated ...
LLC taxed as Corp	4/2/2008
Q: A partner and I formed a LLC and bought a business late in 11/07. Our payroll service would not put ... A: Sorry the 2553 form won't change your status for last year, in fact you can't change your tax status ...
Tax Liability	4/1/2008
Q: I am a legal temporary immigrant here doing my own advertising business, let's call it Business A. I ... A: As long as Business A operates only in the US, it pays taxes only in the US. As long as Business B ...
LLC or S corp	4/1/2008
Q: I am buying an apartment building and trying to decide if I need to form a LLC to take ownership of ... A: I could just pop off with a reactionary "knee jerk" answer, but you shouldn't accept that. You ...
spouse living/working 3 -4 days in another state	2/22/2008
Q: Husband works for airline. Pays for place to stay in PA while he works there anywhere from 3 to 5 ... A: By definition your husband resides in PA. The state claims that on two fronts, the first is whether ...
taxation of an Indian company	2/21/2008
Q: I received information that if the board meetings of a foreign company is carried out from the USA, ... A: Certainly, there are areas of the law that are subject to interpretation. The US Government would ...
per diem and travel expenses	2/18/2008
Q: I have an employee that is on temporary assignment and I am paying him per diem. He will also be ... A: The per diem rate is intended to compensate him for Lodging, Meals, Incidentals, and Entertainment. ...
1099 Reporting	2/16/2008
Q: I received 2 1099-S's for the sale of a principal residence and a farm that was held in a living ... A: Yes the IRS uses the 1099 to "proof" the return. Although you may not owe tax, if there is ...
claiming a parent	2/15/2008
Q: My mother has been living with me for 14 months and receives social security disability and makes ... A: Unless she is a dependent (meaning she stays with you because she cannot take care of herself and ...
Converting a S corp to a C corp	2/13/2008
Q: Just doing a little research, in a previous question you replied that the IRS gave you 60 days after ... A: The March 15 date would be the date a tax return is due after a calendar fiscal year. Just like an ...
LLC shares and ownership	2/12/2008
Q: I recently opened a LLC business in New Jersey. I am the sole member. How do I transfer ownership to ... A: I'm going to start this answer with a question. What paperwork do you have to show you own the LLC? ...
Partial Sale of Corporation	2/10/2008
Q: The corporation owned by three friends and me operates restaurants. In 2007 we sold one of our ... A: outside of the real estate, you are most likely on a cash basis accounting and therefore account for ...
oil and gas royalties	2/10/2008
Q: I had roaylty payments in unclaimed property from 1999 to 2003, and other royalty payments from the ... A: Well. . . The IRS doesn't have a dormant status. You are expected to file taxes every year, profit ...
vehicle mileage	2/10/2008
Q: My employer has just started counting personal mileage as a benefit. We have been told that driving ... A: The rules haven't changed, but enforcement is ramping up. Either your employer has already been ...
W2 required	2/9/2008
Q: We bought a nail salon and are operating it under an LLC we form. The LLC has 2 members, my partner ... A: 1099, while simpler because you don't have to do withholdings or pay FICA, are a minefield. Most ...
Sole Proprietor and rental property	2/9/2008
Q: Here's the situation. Back in 2002 I was looking at incorporating my private practice from a sole ... A: The whole answer is: The Practice can pay anyone for anything that it chooses. It can also deduct ...
initial capital investment or loan	2/8/2008
Q: A friend and I are forming a partnership to buy and sell raw land. He already has some land and is a ... A: My best recommendation is that you DON'T go into this partnership. Partnerships are the worst ...
Reporting an LLC Loss	2/8/2008
Q: Let me give a little background before the question. A couple partners and I started and ended an ... A: Actually the 8832 would be if you wanted to have your LLC be taxed as a Corporation. And although I ...
contest winning	2/7/2008
Q: I recently won $250.00 as a prize at work - when I received the money my company had taken $100.00 ... A: Sadly the IRS has limited untaxable gifts from your employer to a Christmas ham. ANY cash award ...
rental property	2/7/2008
Q: I have rental properties that I have in my personal name. I have an LLC, but have come to the ... A: You are absolutely correct that the LLC is pointless. As far as what you are reading, I recommend to ...
PSC	2/5/2008
Q: After reviewing your questions and answers you make a good case for utilizing the advantages of ... A: As a Consultant you "could" be deemed a PSC (personal Service Corporation); but you have to pass all ...
Loan proceeds/payments for Cash Basis LLC	2/1/2008
Q: I am the member-manager of a 10-year old LLC that specializes in software development consulting. ... A: Sorry a loan is not capital, nor income. If it were income it would be taxable (or in your case, ...
LLC Tax Question	12/7/2007
Q: I had invested in a friends startup company in March 2007 through an LLC of my own. I became a ... A: You are correct, the LLC did you no good for tax purposes. His business may be required to ...
real estate sale sub S versus C corp	12/7/2007
Q: I hope you can help me, my accountant passed away recently and the person picking up his practice is ... A: a rule of thumb that is always true, is that "any profitable business", retail, property leasing, ...
Home-Office Renovation	12/6/2007
Q: This year, my wife and I did a major renovation of our house that included adding a partial third ... A: I appreciate your goal and how you want to get there. But as you tug and pull to get your house ...
Final C Corp Return	12/5/2007
Q: I have a C-Corp client, filing a final return. They will have unused NOL's after the final return ... A: They can only take advantage of the 1244 option if the stock was originally issued as 1244 stock. ...
LLc payment problem	12/4/2007
Q: "Hello.I am in the middle to forming a LLC. My business is importing from China and sell the ... A: Sorry your plan won't stand up. Part of the reason that you can't make those types of payments is ...
S corp Status	12/4/2007
Q: A 100% owner of an S-corp failed to file his state Property tax returns (for three years) and the ... A: The IRS has a 3 year look back window in which to start an audit. Every year one of those windows ...
Investment Property	12/4/2007
Q: I am considering setting up an S-corp to buy, renovate, and sell property. Would the net income from ... A: Let's take a moment and get our bearings: All that you mention is based upon a flawed assumption. ...
taxes on real estate	12/3/2007
Q: Richard, when a person sells a business property and the sales price is 500k, and if he gets 200k ... A: Well John, just like your real estate agent, the IRS wants to get paid up front. the reasons are ...
tax form for contract labor	12/3/2007
Q: my husband has recently started his own tree service business and he has a guy that works for him on ... A: I completely understand why you want this to be handled that way. You need to understand the IRS ...
S-Corp loss deduction against personal income	12/2/2007
Q: I have formed an S-Corp for my restaurant business and I am the 100% owner. My wife is an ... A: "Would I be able to deduct losses in this S-corp against my personal income eventhough I don't ...
Investment Property	12/2/2007
Q: I am considering setting up an S-corp to buy, renovate, and sell property. Would the net income from ... A: YESSSSssss, a C-Corporation will be far better for these types of transactions. In spite of the knee ...
S corp Status	12/2/2007
Q: A 100% owner of an S-corp failed to file his state Property tax returns (for three years) and the ... A: You have given the IRS an opening to disallow your business status. They often use any opening ...
Convert property from corporation to personal use	11/7/2007
Q: If I bought a vacation home for investment under a corporation 's name, the move to live there when ... A: You can buy it from the corporation, which would allow you to then consider it your primary ...
LLC tax	11/5/2007
Q: I own a LLC that I started in 2005 for real estate. I never filed taxes through the business as I ... A: I certainly appreciate your desire to get as much tax advantage as possible, problem is the LLC ...
Corporation 941 taxes and other returns	11/5/2007
Q: I started my own business as a C Corporation in VA about 9 months back. I have no employees. The ... A: Zero is a great number if it true. When do you see the trend of negative cashflow changing? Keep me ...
Inactive investment	11/4/2007
Q: My husband and I have just formed an LLC elected to be taxed as corporation. We want to invest in a ... A: The IRS will require a tax return every year. the IRS can recategories your business as a hobby if ...
Tax reporting obligations to IRS	11/4/2007
Q: I’d like to ask for help in below simple case concerning tax reporting obligations to IRS: ... A: There is tax to be paid. "A US Citizen is required to report and pay taxes in it's world wide ...
Taxation of Capital Gains in LLC taxed as Corp.	11/3/2007
Q: I'm considering setting up a single-owner LLC for the purpose of trading stocks. I would plan to ... A: The LLC is a "Disregarded Entity" for the IRS. They don't recognize it at all. If you are a single ...
Corporate passive income tax	11/2/2007
Q: 100% of the My Mothers C-corporation's income is passive (rents) and she owns 100% of the stock. ... A: "If the corporation is receiving more than 60% of it's income from passive sources, such as rent, ...
What entity would a options trader need?	10/4/2007
Q: I have been options trading for a number of months now and been quite successful. I understand that ... A: I'll try and provide you the foundation of answers in this e-mail, just not in the order that you ...
two companies, one with profits	10/4/2007
Q: I have two Sub S companies. One is no longer producing income, but has some left over expenses to be ... A: Let me preface this with saying that you are trying to move water from one side a bucket to the ...
per diem	10/3/2007
Q: I am an owner of a small construction business in Texas. My employees occasionally travel out of ... A: No you are not required to pay a per diem. The Per diem was initially set up by and for the Federal ...
subchapter s corp obtains a mortgage and distributes the proceeds to it's members	10/3/2007
Q: We are financial consultants and have a client who owns a subchapter s corp that has three ... A: You are correct that the Sub-S would not be required to credit a taxable event to the stockholders ...
One return Or Two?	10/3/2007
Q: If I have a home-based business that supplies all my earnings, do I compute taxes for the business ... A: Since you have not done any preplanning you are stuck with being a sole proprietor. That will ...
re: LLC	10/1/2007
Q: I want to set up a rental property into an LLC for asset protection. I live in Florida The property ... A: "I want it to be protect for from any lawsuits against myself personally," Even the charging order ...
re: LLC	10/1/2007
Q: I want to set up a rental property into an LLC for asset protection. I live in Florida The property ... A: You will not be able to transfer the property to the LLC if there is a loan outstanding. Finance ...
Dividends	9/28/2007
Q: Does the question of whether a company should pay a dividend depend on whether the company is ... A: the term "Organization" is not a recognized type of Entity. But I think I can give you enough of an ...
Non profit formation	9/28/2007
Q: We are a group in Wisconsin, that are presently forming by laws for our non profit charitable ... A: If you intend to comply with IRS requirement as a tax exempt charity, neither is your best choice. ...
Revenue Sharing Investment Transfer	9/27/2007
Q: Revenue to Stock? Thank you for taking the time and interest in answering these questions. I have ... A: Lee I had not heard from you, my email is expert !at! owelesstax.com I'm dashing off a quick answer ...
Number of member of LLC	9/27/2007
Q: My husband and I have been operating a business for a couple years as sole proprietorship, and ... A: All LLC's are "disregarded entities" by the IRS. There is no tax advantage for LLCs. A single member ...
LLC Member Payroll Withholding	9/26/2007
Q: We have set up a two-member LLC, and we have no other employees just yet, but plan to in the near ... A: The LLC is specifically not able to do what you want. Can I ask if you are profitable? if so, you ...
How to change from LLC to incorporated	9/21/2007
Q: I am the Executive assistant for a small LLC called Regnier and associates. I am the very first ... A: Well Alicia Congratulation on the new job, and the trust and respect your boss has given you. You ...
s corp	9/20/2007
Q: I have properties ($13million) and debt ($7million) in an s corp. Can i create a new s corp filling ... A: I hesitantly say yes, it is possible to do so. Assuming the $4 million is debt free assets. The ...
incorporating a business	9/20/2007
Q: I am seeking to incorporate an e-business which will ship products worldwide. I can live, if ... A: Are you planning for "startup" or "success"? If you are planning for success then you need to ...
Vehicle Purchase	9/19/2007
Q: I am a partner in an LLC taxed as a partnership in Minnesota. It is a concrete service company, and ... A: If your accountant said "the LLC Cannot" own them then your accountant is wrong . . . the LLC can be ...
Loan to LLC	9/18/2007
Q: I have a new LLC that will be filing a 1065. I'm going to be funding the LLC business account with ... A: You are correct, no tax advantage to transferring the capital. As to the Tax reducing hopes. you ...
Loan to LLC	9/17/2007
Q: I have a new LLC that will be filing a 1065. I'm going to be funding the LLC business account with ... A: First let's consider that the LLC is a disregarded entity for tax purposes, There is no LLC tax ...
S-Corporation dissolution	9/14/2007
Q: Where can I find a comprehensive discussion of how to handle all of the different issues with ... A: You could try the "US Master Tax Guide" Published by CCH. It is the common handbook for tax ...
Mixing company and personal finances	9/13/2007
Q: The company I work for is incorporated, but my boss is the sole shareholder. He is paid a salary as ... A: If you are looking for a reason to quit and get another job, you don't need any of the reasons you ...
Taxes for Asset Sell of Our Business	9/13/2007
Q: My husband and I own a franchise business and we are setup as an S Corp. We are selling the business ... A: The IRS consistently holds that moneys used to pay of debt are considered income and subject to tax. ...
1099C	9/11/2007
Q: I received a 1099C in 2005 I filed it on my taxes. Then in April 2006 I started getting letters from ... A: You are getting a peak behind the curtain in the collection industry. Let's put aside your actual ...
US tax liability if we open a US bank account ?	9/10/2007
Q: I would like to know if my company would become liable for US taxes if we open a US bank account ... A: Applying the rules as defined by US and international law, having a bank account in the US is ...
S-Corp	8/24/2007
Q: My wife and I own a small publishing business that is an s-corp. Our house is currently worth ... A: If you could do what you are asking you would lose a great tax benefit. Right now, if you live in ...
C Corp vs. S Corp	8/23/2007
Q: Richard, you have made it clear in your previous answers that you believe a real corp. or C Corp, is ... A: Well . . . that is the spin that the fear mongers put on it. I once read in a quote in Fletchers ...
Auto Allowance	8/22/2007
Q: Our small company currently supplies cars for its employees. But do to recent liabilities they are ... A: How will this affect you? Will it cost you or pay you more? what changes would happen for tax ...
Carried Forward Losses - C Corp	8/21/2007
Q: What are the conditions and restrictions on which a C-Corp can use their carried forward losses. A: Be profitable. Without profit there are no taxes to pay, and no use for the loss carry forward. ...
Paper Route	8/21/2007
Q: A person asked: I am a single male and I currently run a newspaper route for USA Today as ... A: Oops, I misread the miles, I calculated as 85 Miles a WEEK. Thanks for bringing this to my ...
Newspaper route and taxes	8/20/2007
Q: I am a single male and I currently run a newspaper route for USA Today as an independent ... A: I previously misread the mileage here is the adjusted answer Let's say income is on the high side. ...
LLCs vs C-Corps - real estate with 401k funds	8/20/2007
Q: I am planning on using my 401k to partially fund a few real estate investments. I have the option ... A: Let me first say that you investing your Tax deferred retirement funds into a C-Corporation (or LLC) ...
Section 351 Transfer	8/18/2007
Q: Mr. Fritzler, I have been reading about the Section 351 Transfer with a property being tranferred ... A: Section 351 describes how a transfer of property to a corporation will be interpreted for tax ...
Personal property and LLC	8/17/2007
Q: I wish to buy my first property but would like to have it held under a corp structure (like an llc). ... A: The lender might allow this, but the have the right to refuse. An LLC is in no way a Corporation. ...
Section 351 Transfer	8/16/2007
Q: Mr. Fritzler, I have been reading about the Section 351 Transfer with a property being tranferred ... A: You wouldn't avoid the capital gains tax, you would transfer the property to the corporation and the ...
LLC vs INC for issuing 1099's at year end	8/16/2007
Q: I know I don't need to send 1099's to companies that are incorporated. But, what about LLC's? And, ... A: Technically, if the LLC has a separate tax ID number, and you only wrote checks in the name of the ...
How to Desolve S corporation.. New One No Business done yet	8/15/2007
Q: Sir, I recently opened S corporation( 08.01.2007).. registered at NJ. Due to personal problems... I ... A: For the IRS: Have you filed an SS-4 form? If not the IRS would not know the company exists and you ...
Best way to distribute money	8/15/2007
Q: First, let me say that I love your No Spam Guarantee and that you have a sense of humor. Let me lay ... A: I think you will really like the results. Let's start with how the money is coming in. Is it ...
LLC Taxed as S-corp	8/14/2007
Q: Mr. Fritzler I have searched IRS website and have taken CPE courses for LLCs but I am still unclear ... A: Part of the confusion is that there is no direct jump from LLC to Sub-S status. the LLC would have ...
Deducting Educational Benefits over $5250	8/14/2007
Q: Richard: My company seems to be willing to entertain sending me for an executive MBA program. The ... A: Beyond the $5250 which is the "Working Condition Fringe Benefit", someone is going to have to pay ...
tax issues after dissolving a general partnership in california	8/14/2007
Q: Sir, I was involved for a short time in a general partnership. For many reasons the partnership ... A: Not if everyone sticks to the agreement. Since you receive nothing but the return of your initial ...
LLC vs S-Corp	8/1/2007
Q: I want to create an entity where I have multiple (2 to 3) DBAs' under an Umbrella (may not be the ... A: You can. . . But can I ask you why? What is it about this blue print attracts you? Is it because ...
rental property loss tax deduction	8/1/2007
Q: My son, daughter, and I each own 1/3 of a vacation rental property in Lake Tahoe. We usually have a ... A: Your accountant was not "uncommon" in recommending an LLC. That is by far the leading recommendation ...
1120S AMENDMENT	8/1/2007
Q: MY SMALL S CORP FILED USING CASH BASIS FOR 2005 WHICH RESULTED IN A LARGE TAX LIABILITY YET HAD ... A: I'd love to give you all kinds of great news, but . . . If you were a real corporation, then you ...
Sell of Insurance Agency	7/31/2007
Q: I have owned an insurance agency for 8 years (sole proprietor, no corp.) and looking to sell. I am ... A: The capital gain would apply to the tangibles, but as you point out that is diminimus. The recurring ...
K-1 Distributions from Statuatory Trust	7/25/2007
Q: My grandfather died in 1987 and his home was transferred into a statuatory trust with a cost basis ... A: Since the house was never actually given to your father, he would not have enjoyed a step up in ...
Corporate Equity/Stock transfer	7/19/2007
Q: I have a partnership with a friend. We came up with some ideas that we patented. There is now a ... A: If you set up the corporation and put the patent in the corporation, you have capitalized the ...
1099's	7/19/2007
Q: I gave a 1099 in 2006 to a consultant, but upon review of the accounts, that 1099 was for $8000.00 ... A: You would resubmit form 1096 along with the new 1099 to the IRS. And send new 1099 to the "Common ...
1065- loan rec. & interest	7/18/2007
Q: If I have a partnership(wholesaler for products)can I loan money to individuals or corps. to earn ... A: Absolutely, you can loan money. What you can't do is charge a "Compounded Interest Rate" this is ...
Owning a rental property in WA	7/13/2007
Q: Is the best way to own a rental property in WA is via LLC in WA? Or is there another way? A: Do you plan to be profitable? If no my recommendation; Rethink your plan. If yes then do business ...
s-corp	7/13/2007
Q: I'm starting my own business selling invitations, programs, etc, I was wondering about s-corps. How ... A: To file a real corporation you need to contact the "Secretary of State" in your state, they will ...
Capital gains	7/12/2007
Q: Is the gain a business realizes from the sale of its contracts and licenses capital gains? I ... A: If you can give me more specific details I can probably give you a complete answer. It could be ...
LLC Texas Self Employment Tax	7/12/2007
Q: I am the sole proprietor of an LLC registered in Texas. I produce websites and internet services ... A: As an LLC you are, from the IRS Perspective a Sole Proprietor (the LLC is consider a "Disregarded ...
Foriegn Entity	7/12/2007
Q: A partner and I recently formed a delaware LLC; however, we are required to give a "legal address" ... A: The business entity will be required to file in Every State in which it does business. The ...
Sale of Liquor License	7/11/2007
Q: I have a an S-Corp client that owns a deli. In New Jersey a liquor license is very valuable and ... A: that is a nice profit, and the tax on that profit would be long term cap gain. With NJ taxes ...
Sale of Liquor License	7/11/2007
Q: I have a an S-Corp client that owns a deli. In New Jersey a liquor license is very valuable and ... A: The license is an asset. The sale of which would be shown as a gain or loss. I don't know what they ...
Building and selling house capital gain or income	7/11/2007
Q: A client has started an LLC being taxed as a sole-proprietor. The LLC has built a house and ... A: The difference between the costs associated with construction and the sale price of the house would ...
S-Corp -VS- LLC	7/11/2007
Q: My husband and I are looking into opening a fast food Mexican restaurant in Hawaii, but we want to ... A: You can file a corporation in CA and do business in Hawaii. That will result in filing additional ...
Sole proprieter	7/10/2007
Q: WE just started a delivery business as sole proprietor and are considering hiring some help. What ... A: In short; ALL OF THEM. State and local rules and rates vary, so I will point you to your local ...
Selling my house	7/10/2007
Q: I'm selling a house in Mexico and I heard that I need to report it as an income. If I'm paying taxes ... A: The US and many other countries have tax treaties (including Mexico) where you will get credit in ...
donations involving a non-profit	7/9/2007
Q: When can our non-profit organization start receiving donations, when we file articles of ... A: You will only have "Tax Deductible donation" status after the IRS approves your 501 application. And ...
Sole Proprietor Paying a family member to do work	7/9/2007
Q: I'm a sole proprietor of a home-based consulting engineering business. Most of my work involves CAD ... A: Beyond the value of the feudal apprenticeship system? (Where one works for years to learn the craft ...
Out of State Home Sale	6/28/2007
Q: My grandmother passed away last august. The deed of her house was in both her name and her eldest ... A: Lisa I see that you got posted to the Answer pool. Allow me to answer this for you. Federally, if ...
getting back taxes	3/14/2007
Q: hi i am a tourist i bougth a personal computer here in usa and a camera i paid like 180 dollars in ... A: You may be able to claim the taxes you paid in the US against your home countries tax return. The Us ...
social security tax	1/31/2007
Q: My husband is a sole proprietor. Our largest tax burden is the 16% social security income tax. Is ... A: There is no way to become exempt; any earned income (wages as an employee, sole proprietor profit, ...
Tax Audit	1/31/2007
Q: I am a hvac plumbing desinger working with some engineering companies and I became self employed for ... A: Filing an extension is very straight forward and simple. The extension is for an additional 6 months ...
SEP-IRA	1/30/2007
Q: I am a self-employed consultant with a SEP-IRA. One of my clients pays my hourly rate through a ... A: there are other options. First, let's look at how you receive the money. Your employer pays 7.65% ...
1099	1/30/2007
Q: I formed a new LLC last year and am required to fill out a 1099. This is the first time I'm filling ... A: 1. yes 2. It is required of you that if you employ someone that you get their tax ID information, ...
Sale of Partnership	1/29/2007
Q: I am a 50% member of an LLC. I am 65 and my partner has offered to buy me out for 33% of the ... A: Normally, (But you can adjust these points in the terms of the agreement): You would experience a ...
sale of rental property to son	1/28/2007
Q: I am selling my rental home to my son for $50,000. Due to "creative financing" he will borrow ... A: If you are going to receive $65,000 then the accountants are correct in claiming that you got $65k. ...
tax question	1/25/2007
Q: I am trying to figure out what i need to do for claiming inventory. Do I need to know what I started ... A: When you ask about "claiming" inventory, are looking for a tax deduction? Because there is none. ...
Small Business Taxes	1/25/2007
Q: I just opened up a small alterations shop from my home. I have a vendor's license and have been in ... A: Tax payments are paid quarterly. For your federal responsibility, Self Employment tax and ...
Deductions	1/24/2007
Q: My husband and I formed a non-profit corp (501c4)in Fl to start a girls softball team, in which we ... A: You may want to log into www.stayexempt.org. This is the IRS training website for tax exempt ...
house tax	1/23/2007
Q: i have a 3 family home i live in the first floor i want to sale the house but i paid 115,000 i ... A: You will be required to pay taxes on $255,000 minus $115,000 Minus commissions, closing costs, etc. ...
married filing separate	1/22/2007
Q: My husband started his own business in Feb. 06. I also work. Would we be better off to file joint ... A: If you are looking for tax benefits, your husband should operate his new business as a real ...
pay/hire friends	1/21/2007
Q: Can wealthy people hire and overpay their close friends? If I wanted to give 3 of my best friends ... A: You can. . . and people do, sometimes when you have an extra few hours and a high tolerance for ...
LLC Filing	1/21/2007
Q: Myself and my fiance started a LLC in May of 2006. This business has made no income, but has ... A: You are not alone in your quandary. The IRS has defined the LLC as a "disregarded entity". There is ...
Closed business. Stock investment	1/20/2007
Q: Good morning Richard, I closed a business in 2006. The business never generated any income. Had a ... A: Good question and the answer is YES. But it doesn't end there. Under standard capital loss rules, ...
LLC tax filing rule	1/18/2007
Q: Every year this question comes up amongst my partners. There are 6 of us that own our Martial Arts ... A: The IRS has stated that the LLC is a disregarded entity for tax purposes. So, yes, at this you would ...
LLC tax filing rule	1/17/2007
Q: Every year this question comes up amongst my partners. There are 6 of us that own our Martial Arts ... A: "How would a business ever save any money for growth?" The successful businesses do it as a real ...
NJ-1065 Partnership Return and Instructions	1/17/2007
Q: My business is filed as an LLC in New Jersey, i'm the only owner. Do i need to file this return? ... A: AS an LLC you are considered a "DISREGARDED ENTITY" by the IRS. You are actually a sole proprietor ...
taxes on winnings	1/16/2007
Q: how would i file taxes on gambling winnings at a casino A: Gambling winnings are fully taxable and must be reported on your tax return. Gambling income ...
Art Guild	1/15/2007
Q: The situation is an Art Guild was formed in the state of MA. It’s a nonprofit organization. A ... A: More information would be nice but I'll just make some assumptions. That you filed as a Non-Profit ...
Standard Mileage Rate	1/15/2007
Q: Can a corporation or partnership take the standard mileage rate for business mileage? THe IRS ... A: The standard mileage rate would apply only on the occasional use of vehicle. If the corporation ...
S-Corp stock redemption	1/12/2007
Q: If a 2 person s-Corp redeems the stock of 1 s/h with appreciated real property, is there tax at both ... A: There would be no double tax. Taxes are not paid on transactions they are paid on realized gains. ...
End-of-Year Bonus	1/12/2007
Q: I own a company with one other person. We are organized as a corporation. Throughout the year we ... A: Before you try and give away 40% or more of the money to the Government, can I ask you why? You ...
dividends draw in S corp	1/11/2007
Q: Is dividends draw in S corp a reportable taxable income? I don't think so. Please confirm for me. ... A: By design a Sub-S is a passthrough entity, that means that all the income (or at least the tax ...
LLC questions	1/11/2007
Q: I'm thinking about starting an LLC and have tax questions on it. I will be the only member of the ... A: Can I ask you what benefit you were looking for in filing an LLC? As you point out there is no tax ...
CHILD SUPPORT	1/10/2007
Q: I'M A MEMBER OF UNITED STATES ARMY AND I'VE BEEN SEPARATED SINCE MAY/94..STATE OF CALIFORNIA ... A: You kids can only be claimed as dependents by one of the parents. Unless the divorce decree ...
Taxes	1/9/2007
Q: Since a contribution to an individual Retirement Acconut is a volutary action, a taxpayer may ... A: No. A contribution to an IRA is a "compensated" "contractual" event. you are compensated by ...
New Buisness Financed by Profit Sharing	1/9/2007
Q: What type of Corporation would I create? I just want to open up a smaalmexican restaurant in a town ... A: You end with a very telling statement: "I'm not going to make much profit". This becomes a foregone ...
paying taxes concerning class action suits!	1/8/2007
Q: IHope you can answer a question or two or point in rt direction!! I"m involved in a suit and havnt ... A: If there is a settlement, the terms of the settlement must be set out in writing, and you have an ...
New Buisness Financed by Profit Sharing	1/7/2007
Q: I'm qualified to take out 1/2 my DPSP (Profit Sharing). I'd like to use this money to open my own ... A: Sadly, profit sharing is income, and subject to all those taxes. But since you are tax sensitive, ...
RETAIL/TAX QUESTION	1/6/2007
Q: I run a small retail store in minnesota and currently am having a sale of 70% off all christmas, the ... A: Are you asking if your register could be set to charge tax on full retail then give the discount ...
payroll taxes for sub-s	1/4/2007
Q: Richard, I just started a Manufacturers Rep business in 2007 in NC. My accountant suggested to ... A: Your accountant is not on target with his recommendation. Doing business as a sub-S is possibly ...
question on taxes for options trading	1/4/2007
Q: I do only options trading using Scottrade, and Charles Schwab. I want to know if I can file my taxes ... A: Not wanting professional trader status is a good thing. however you are in business and since you ...
quarterly taxes	1/3/2007
Q: i have been paying my taxes all year on time, but this last quarter i did not earn as much as ... A: You can certainly adjust your quarterly payment. As long as you are within reason when you file the ...
LLCs investing in real estate	1/3/2007
Q: I own an LLC whos primary business is buying, fixing up and selling residential real estate. How ... A: I think I can simplify your question. the LLC is a "disregarded entity" (IRS Definition) for tax ...
S-Corp	1/2/2007
Q: We opened our S-corp in 2005. The main reason we opened S-corp is to avoid double taxation. I have a ... A: The not so quick answer: You each would have to take the first portion of the dollars as salary and ...
Can a husband-wife LLC be taxed as sole proprietorship ?	1/1/2007
Q: My husband and I have a LLC (we are both members). From a lot of reading, I understand that when a ... A: Technically? No. The IRS is already aware of the LLC and the two member status. they are expecting ...
s-corp distributions	12/29/2006
Q: The facts about my S-Corp distributions: 1. I made a little under 15K last year as an s-corp. 2. I ... A: This is a textbook example of how a sub-S doesn't do you any good. q1: The minimum compensation is ...
Board of Directors expenses	12/28/2006
Q: I'm currently serving as Treasurer of the Board of Directors for a condo I am a part owner of in ... A: It would not qualify as a personal deduction. If you are in the "business" of being a treasurer you ...
Bonus and Chart of Accounts	12/27/2006
Q: We ae a very small Sub S Corp. If we give my husband who is the only employee of the Corp. a bonus, ... A: Bonuses are consider payroll and you would ad it to the payroll accounting. A bonus is not a good ...
Distributions from an LLC	12/22/2006
Q: We have an LLC with only two members (80%, 20%) all net earnings will move through to the two ... A: The LLC is a "disregarded entity" by the IRS, which means it is not recognized as a taxable entity. ...
husband's corporate tax on family land sales	12/21/2006
Q: My husband's family corporations had to sale entire farm/family business to pay mortgages and ... A: I can imagine a situation where someone who is a stockholder of a sub-S could end up where you are ...
Sub S	12/18/2006
Q: When an owner of Sub S stock wants to sell of the company, is there a tax advantage or differce to ... A: Although the minutiae of process is different, the ultimate affect is about the same. The more ...
Limited Liability Corporations	12/18/2006
Q: Richard, What are the tax disadvantages of having an LLC in California? A: The IRS uses the term "Disregarded Entity" to describe the LLC. There is no tax return form, no ...
Transfer of Property to New S Corp.	12/18/2006
Q: Through the advice from an attorney, taxpayer and the only shareholder, formed a S-Corp for the sole ... A: 1. Absolutely, it has to comply with 351, and the first statement of 351 is: (a) General rule No ...
What and with whom do I need to file?	12/18/2006
Q: I think it is so wonderful. I love this site! Here's my question(s): I live and work in Virginia ... A: You won't find an LLC federal tax return. It doesn't exist. The LLC is a "disregarded entity" for ...
Sales tax	12/16/2006
Q: I was wondering if you were at all familar with NYS taxes? I was wondering what the laws were ... A: I am certainly not an advocate for more and greater taxation. But, the fair part of it, that the tax ...
Trading stocks within corporation	12/16/2006
Q: Wow, your answers are great! If I set up a corporation in Nevada, could the address be a PO Box, ... A: The "Model Business Corporation Act" (the defining standard) specifically states that a PO box is ...
Trading stocks within corporation	12/15/2006
Q: And you used Nevada as an example because it has low taxes? Is it the lowest of the 50 states? Can ... A: "And you used Nevada as an example because it has low taxes? Is it the lowest of the 50 states? " ...
Sales tax	12/15/2006
Q: I was wondering if you were at all familar with NYS taxes? I was wondering what the laws were ... A: "I was wondering if you were at all familiar with NYS taxes? I was wondering what the laws were ...
sell or rent condo now and sell in a couple years	12/15/2006
Q: My condo is in San Diego. I bought it two years ago and have lived in it all this time. I want to ... A: You only have to live in it for 2 out of the last five years to get the $250,000 exemption. If you ...
fair market rental	12/14/2006
Q: My Dad is a 24.6% owner in a family farm C-Corp. He has two brothers, with controlling interest ... A: You are absolutely correct in that their self dealing does not correspond with the intent of the ...
Closing a Company	12/13/2006
Q: I have a S-Corp that is no longer doing business. I am wondering what the "official" things I need ... A: You need to file tax return and mark it as "final tax return". That'll let the IRS know that they ...
Trading stocks within corporation	12/13/2006
Q: Is it possible to set up a corporation to trade stocks and not get taxed on the gains and dividends? ... A: You'll be taxed, but you will be taxed much lower, so more of your profit can go back into the ...
what is the differance between an s & c corp?	12/13/2006
Q: what is the difference between an S corp and a c corp. i have read your replies to other S corps, ... A: An S-Corp pays no tax. A C-Corporation pays taxes. An S-Corp attributes all the tax liability to ...
C Corp asset moved to S Corp	12/12/2006
Q: My understanding is that the election to move from C to S corp would eliminate the double taxation ... A: Zig Ziglar was fond of stating that "he would never eat cottage cheese because it makes you fat". ...
s- corp cash draw	12/12/2006
Q: my accountant (new) suggested that i cut my salary in half, and "draw" the other half. he went ... A: It is not your best option, but it could reduce a couple of the taxes that you pay personally. The ...
capital gains	12/12/2006
Q: The information you provided me is very helpful. In my situation I have ownder the home for about ... A: That would be a "short Term" gain and is the same tax rate that you would pay on income. So imagine ...
capital gains	12/11/2006
Q: I was told by my realtor that if I profit over $30,000 from selling my home that I will have to pay ... A: Ummmmm. No. If this is your primary residence, and you have lived in it for at least 2 out of the ...
C Corp asset moved to S Corp	12/8/2006
Q: A C Corp was established in 2003 and bought a unimproved property (land with no buildings). The C ... A: Filing taxes for 2003,4,5 would allow you to claim the interest and taxes paid against the ultimate ...
Incorporating	12/7/2006
Q: I curently have my business"farming" organizied as a sole-proprietorship and was considering ... A: The S-Corp is a pass through entity and therefore transfer all tax liability and all losses to you ...
2 member LLC	12/7/2006
Q: My Wife and I recently formed an LLC in Arizona, I am getting ready to fill out form SS-4 to recieve ... A: "Best" is not a term that can be applied here. Let me explain. For tax purposes, the partnership ...
Dissolution of a parntership Depr of assets	12/7/2006
Q: Five man parntership is having to dissolve as of Dec. 5 2006 due to two parnters buying out the ... A: Yes. This is best explained in IRS publication 541 you can view or download it from www.irs.gov Are ...
Partnership Giving	12/6/2006
Q: We are a start up business in '06. 3 partners, one employee. We would like to disperse our profit ... A: You can pay as much as you want for service from employees and independent contractors. However, ...
Same person EE and 1099	12/6/2006
Q: I am part of a 3 man partnership with 1 employee, hired 3rd quarter. The employee worked for us as ... A: Well, the 1099 by design is an audit flag. If the person was truly independent, that means had full ...
R & D Tax Benefits	12/6/2006
Q: I work for a small company that sells after market parts and accessories for off road motorcycles ... A: Let's start with depreciation of a vehicle is bad. Now, you can do it, in fact it is viable that ...
LLC or C Corp	12/5/2006
Q: I live in Texas and am starting a commercial data backup firm. I am stuck between LLC and C Corp. ... A: The LLC is a "disregarded entity" for tax purposes, if you choose this, you will continue to pay ...
selling vs. tax write-off	12/5/2006
Q: I have a collection of comics, quite a few in fact. I am trying to figure out if I should sell the ... A: If you donate the comics to a charity, then you would get no money. If you sell the comics and pay ...
Sub S Corp	12/4/2006
Q: We are in the last days or year end tax planning for our Sub S corporation employer. Historically, ... A: Your idea of pushing the tax liability on the payment made to pay the taxes would reduce the taxes ...
New business in Thailand	12/4/2006
Q: I just set up a business in Thailand. I live in the US. Can I deduct the start up costs ( ... A: There are many, and I mean many, limitations to deductibility on your personal tax return. And even ...
solo (k) plus pension?	12/3/2006
Q: I have a retirement related question. I have a business which pays me $37,000 per year (with small, ... A: If the pension includes an employer contribution, then it would be good. Otherwise, tax deferred ...
LLC Tax Question	12/2/2006
Q: Need help please! We started an LLC in Jan 2006 with 2 members and are considered a partnership in ... A: If you have been treating yourself as employees, then do the w-2's. The end of year accounting and ...
Non- u.s. resident	12/2/2006
Q: How would a non U.S. resident be taxed if he holds interest in My LLC in Georgia A: The LLC would be required to withhold, and pay to the IRS 30% of all the funds that were intended to ...
quickest way to get resale certificates in many States	12/1/2006
Q: I am a reseller of Audiobooks to Public Libraries, (an LLC-we DO NOT CHARGE SALES TAXES) and my ... A: In most states the Sales and Use tax permits are handled by the Local business license department, ...
short sale of house	12/1/2006
Q: If a person is doing a short sale on their home, can that person use the deduction to eliminate the ... A: I think you'll find the bank will be unwilling to allow a short sale if the owner is benefitting ...
Business loss/Email changes?	12/1/2006
Q: I am a sole proprietor business who just started last year. I spent the money to purchase booth set ... A: For the long term, learn from this and don't depend on others, registering a domain is cheap, simple ...
Initial Capital investment	11/30/2006
Q: My name is Rene, and I am a construction contractor. In July of 2006 I formed a C Corporation. To ... A: Let me first congratulate you on your intelligence, shrewd business savy and independence to choose ...
Sch C to S-corp--351 transfer	11/30/2006
Q: I guess the last part of this question--"and still have this fall under the 351 regs?" was ... A: So you want to loan the assets to the sub-s, instead of capitalizing them into the sub-s? When you ...
Converting to S-Corp Taxes	11/30/2006
Q: I took a 1099 programming contract a couple months ago. I recently started the process of ... A: Directly to yourThe Sub-S would be a new entity at hte date you create it and would only be ...
Sch C to S-corp--351 transfer	11/29/2006
Q: I have a Sch. C for a client that we are incorporting to an S-corp. Assets are: small cash, 200,000 ... A: When you say "still have this fall under the 351 regs" Does that mean you want to know; whether ...
taxes for 1099	11/29/2006
Q: i will have made about 40k this year that i am 1099'd for. my husband has a w-2 and has probably ... A: You're, right your husband's income has most or all of the taxes with held. You have not. On your ...
Tax Liability for LLC	11/29/2006
Q: I am a minority partner (5%) in an LLC. I am considering leaving this partnership in the near ... A: Normally, it is apportions based upon the percentage of the year that you hold the ownership ...
acquisition taxes	11/29/2006
Q: when a company is sold to another what are the standard taxes and are there steps you can take while ... A: For the business itself there is not taxable event. The taxable event happens to the owners. The ...
husband-wife partnership	11/28/2006
Q: My question is on behalf of a friend that runs a husband-wife partnership. It is a dance school and ... A: Since, I assume, it is not a charitalble, tax exempt, enterprise; the word donation does not really ...
salesman expenses	11/28/2006
Q: What exactly can salesman expense out, re: meals, gifts, office supplies? A: You can expense "Actual Business Expenses". Meals are limited to 50% (that would be the other guys ...
Use income from 1st freelance gig to buy business equipment	11/28/2006
Q: I have two questions I hope you can help me with. I live and work full-time and recently started ... A: Well, generally, a computer is a depreciable investment so it would take 5 years to realize all the ...
Cell Phone Usage	11/27/2006
Q: Is there an amount that employees can be paid through Accounts payable (instead of payroll) for ... A: Many businesses provide a cell phone to the employee for work and deduct the entire payment. You ...
sole proprietorship	11/27/2006
Q: are there government taxes for Sole prprietorship, like partneship and coorporation A: As a sole proprietor you pay personal tax, both income and payroll on all the money that the ...
Converting C-corp to Sub-S	11/27/2006
Q: Several years ago I put some rental property in a C-corp (that is all the C-corp is used for). I ... A: It would be a bad Idea. But if you want to convert your real corporation to a sub-s you would file ...
S Corp	8/29/2006
Q: Even if they were never a C Corp? What if they do not care if distributions are not done equally ... ... A: Those persons could purchase more stock with their distributions, increasing their percentage ...
home purchase at a loss	8/29/2006
Q: I am interested in purchasing a home that is marketed as a teardown for $300,000. The ... A: One of the misconceptions about writeoffs is that they are a good thing. They aren't they just make ...
S Corp	8/29/2006
Q: Are S Corp shareholders required to take distribution checks eqaully? I have been told this but ... A: Conventional corporate form requires distributions to be commensurate with stock ownership. Meaning ...
CAPITAL GAINS ON INVESTMENT PROPERTIES	8/29/2006
Q: Richard, I live in Texas, and am about to purchase a building for 2,100,000. Once the condos will be ... A: From the total sale price, deduct costs including construction, sales, and closing costs; From that ...
401K Restriction	8/28/2006
Q: my employer states that per an agreement with the IRS, I cannot do a withdrawal from my 401K unless ... A: I believe they meant to say that you would be subject to additional penalties if you withdraw for ...
Taxation for an NJ LLC	8/28/2006
Q: I am planning on incorporating an NJ LLC. I have 2 questions: a) In case the LLC makes a loss then ... A: The minimum $500 tax is a State of NJ rule and I don't know if that applies to LLC's or not, so a ...
single member LLC and S-corp election	8/26/2006
Q: You answered the following question. Everything I read says that sigle member LLC can elect s-corp ... A: I don't remember the context of that particular response, but let me apologize for the ...
minority interest	5/31/2006
Q: I am a Trustee of a Trust that owns 50% of the shares in c-corps that hold real estate. There are ... A: The argument would not apply. As you state, you would dissolve then create a new entity; the LLC. If ...
Distributions in S Corp and LLC taxed as Partnership	5/31/2006
Q: If I maintain separate accounts on the books for investment and retained earnings (profit & loss), ... A: Whether you maintain seperate accounts or not, you will make 1 k-1 distribution form the business to ...
Small Business Write Offs	5/30/2006
Q: You say that it's not 100% but I was sitting at H&R Block when they asked my fiance if he wanted to ... A: When I say "not 100%" there are two things that apply. First there are no deductions against Self ...
used mobile home dealers	5/30/2006
Q: How does the IRS require sales and financing of used mobile homes to be reported? Do you have to ... A: I take it, you are describing owner financing. Otherwise the seller would get the entire amount the ...
LLC Tax Rates	5/26/2006
Q: Mr. Fritzler, I am in the process of writing a business plan for a start up business that is ... A: Yes. You metiuon an LLC, which for tax purposes is a "disregarded entity" according to the IRS. ...
How do I...	5/26/2006
Q: We currently cannot deduct our real estate losses due to the fact that our AGI in excess of $150k. I ... A: Hands down choosing to do business as ALL of the most successful businesses do is a good choice. ...
Capital gains tax	5/26/2006
Q: We own a Pepperidge Farm Distributorship in Arizona. The business is about to sell. Is there any way ... A: "Would buying another business avoid the taxes?" Avoid, NO, postpone yes. A 1031 (like kind ...
LLC vs C-Corp tax advantages for small fry	5/24/2006
Q: I'm a freelance writer who's thinking of incorporating because of a client's request to take on an ... A: The IRS classifies the LLC as a "disregarded entity". They do not recognize the LLC for tax ...
LLC vs S-Corp	5/23/2006
Q: My husband and I are in the process of opening/creating an online spirit apparel store. It will be ... A: This is a very common question, and yet many people seem to make the wrong recommendation. Try this ...
S Corp - Owner s Draw	5/23/2006
Q: I have a share in an S-Corp with 55% share going to my partner and the remainder to me. We ve just ... A: The owners draws are considered income to you and you'll have to pay income and payroll taxes on ...
$150K Rental Deduction Exclusion	5/20/2006
Q: Richard, I'm considering purchasing a home or condo (@$160K value)to rent to a family member in ... A: Your $160k income pushes you into "phaseout" of deductions so you strat losing personal deductions ...
K-1	5/19/2006
Q: My mother past away in 2000 and her Probated Estate has allready been done. My sister was the ... A: If you mean do you get a personal deduction for the mortgage payments, no. for two reasons: Those ...
Tax liability	5/18/2006
Q: I had a question as to my tax liablility in a new marriage? I have been married now for almost 1 ... A: You certainly can make the "innocent spouse" argument. But that would be making an argument. Trying ...
Tax deduction for Sales Tax on Commercial Vehicles	5/18/2006
Q: Richard, My company is contemplating the potential purchase of some commercial trucks. Is the sales ... A: The sales tax is paid by the lease company and included in the calculation of the lease payment. A ...
Federal income Tax Deductions	5/16/2006
Q: I work for a mortgage company and they are a c- corporation. i am a atudent with this part time job. ... A: Well, 136.92 is almost exactly 15%. Based upon the $918 you would be pushing into 25% tax bracket on ...
sales tax, corp. tax	5/16/2006
Q: I had to close my corporation down in Baton Rouge, La. in 2003. I still owed sales tax and corp. tax ... A: You can be held personally liable, since you were a signor on the account, or since you were an ...
1099c	5/16/2006
Q: Good morning, Could you point me to an official resource verifying that a corporation can/cannot ... A: The 1099C is issued when the Corporation cancels or forgives the debt, and takes a tax deduction. If ...
Unique Sub S (i think :)	5/15/2006
Q: I have a sub s corporation and I am the sole stockholder. My business is seasonal and only open for ... A: There is no difference in Distribution and shareholder Dividends. Two phrases describing the same ...
Starting a small business	5/14/2006
Q: I'm in the process of spining out a business from a large corporation. There is also a chance ... A: Yes asset protection should be a very real concern for you. But there is no One-Size-Fits-All asset ...
Which state to incorporate in?	5/13/2006
Q: I am interested to start an LLC. Some research on the internet lead me to believe Delaware was the ... A: Without specifics of your type of business and your goals, I can't give you the "definitive answer" ...
Trust and 1031 exchange	5/12/2006
Q: I (just me) own 2 family house that both floors are rented out, I put the house in a revocable ... A: Your understanding is accurate, you would not be eligible for $250 Exemption, unless you lived in ...
capital infusion	5/12/2006
Q: I'm starting a single member LLC which will receive an initial capital infusion from my savings ... A: 1) No, the LLC is considered a "Disregarded Entity" by the IRS, and has no tax standing at all. You ...
Owner's Draw	5/10/2006
Q: I work with a single member LLC. Since Owner's Draw gets closed out at the end of the year what ... A: For simple tax savings- at the point of profitability. Cutting taxes from 30% (income and payroll ...
legal entity	5/9/2006
Q: If someone is starting a small business selling their services, and will not have any employees, are ... A: Doing business as a Sole Proprietor makes you a "tax victim". You will have the highest possible tax ...
Setting up Corp, or LLC on personal property	5/9/2006
Q: I've heard that there is some advantange in forming a Corp, or LLC on a small rental property my 86 ... A: Allow me to divide your question into two parts. First--Your question focuses on a very important ...
Owner's Draw	5/8/2006
Q: I work with a single member LLC. Since Owner's Draw gets closed out at the end of the year what ... A: Yes. Since the LLC is considered a "disregarded entity" by the IRS, the LLC is handled as a ...
Capital Gains Question	5/7/2006
Q: " My elderly Father recently came to live with me because of dementia. He has a condo in Cocoa, ... A: Well. As you have realized; best option would be for you (as trustee)to have sold the condo while it ...
tax for excerising stock option	5/3/2006
Q: Fritzler, My company is a small company, and we hire a senior manager. Instead of paying him a high ... A: Stock options are now considered income and taxable. Some of your concerns, seem to center on ...
Could you hep me?	5/3/2006
Q: Fritzer, Hello, My husband and I owe over $81,000.00 in back taxes and our property now has a lean ... A: I have no one to recommend, but, you can look for a tax attorney, or and EA (enrolled agent) EAs are ...
payroll	5/2/2006
Q: I am a one person LLC, I want to know the best way to pay myself and pay the least amount of taxes. ... A: The IRS has deemed the LLC to be a "Disregarded Entity". That means for tax purposes, you are a sole ...
Dissolving LLC	4/27/2006
Q: A Landscaping business that started as a sole proprietorship, advice led to an LLC formation, but ... A: You are absolutley correct that the LLC has lead you down a path to exactly where you started. For ...
real estate tax deduction for non-primary residence	4/26/2006
Q: My three brothers and I inherited our family home after my father's passing. It would seem that we ... A: Depreciation in the short term is not normally a good thing. And in your case, would not really ...
real estate tax deduction for non-primary residence	4/26/2006
Q: My three brothers and I inherited our family home after my father's passing. It would seem that we ... A: Well, your inherited home is not deductible on the 1040. in order to take deductions, you'd have to ...
Amendments	2/10/2006
Q: Richard, I sent my State taxes in, and the State accepted my return, but I realized later on the ... A: Since the federal and State Tax returns will be different it will be easy for the state to see the ...
Amendments	2/10/2006
Q: Richard, I sent my State taxes in, and the State accepted my return, but I realized later on the ... A: Did you make the same mistake on your federal return? Did you change the federal? Is it a math ...
s corp vs llc	2/10/2006
Q: Our dental office is currently an S corp. It is our wish to minimize payin of FICA which we can do ... A: First, your accountant is in error. The LLc is considered a "disregarded entity" by the IRS. The IRS ...
S-Corp and payroll.	2/8/2006
Q: I think I have made a big blunder. Our small business with 4 owners and the only employees, just ... A: Big mess? No. A few little messes? Yes. would taking it to an account clean it all up better than ...
Single person LLC in Nevada, foreign entity in NJ	2/8/2006
Q: I am a single person LLC, in Nevada and work in NJ as a foreign entity. my question is that I gave ... A: if you spent $38,000, made 10,000 you are operating at a loss and will owe no taxes for the LLC ...
Property Contributions	2/7/2006
Q: First year tax filing for an LLC. Prior to forming the partnership the indnviduals who would form ... A: It is part of the assets of the LP if the partners contributed it. How do you value it, well the ...
Single member LLC can elect S-Corp Status?	2/7/2006
Q: Can a single member LLC still elect S-corp status. I read in a one of your posts that the IRS ... A: No, an LLC cannot elect to be taxed as a Sub-S. It can elect to be taxed as a real corporation. Real ...
Independent Contractor	2/6/2006
Q: My husband works as an independent contractor for a small radio company. This year my husband was ... A: Well the technicalities are these. The $400 that you husband received and your employer claims is ...
Family Limited Partnership	2/5/2006
Q: We have an FLP registered in Texas... The FLP does business operating a farm/ranch in Kansas... ... A: The State of registration has very little to do with filing taxes. It is the State in which you ...
LLC Taxes	2/4/2006
Q: What is the best way to pay (Tax wise) a manager that manages a LLC. He is also a member. He is ... A: Whether you pay him as an employee or as an independent contractor, all of the taxes are going to be ...
sub S corp	1/27/2006
Q: I am currently a sole proprietor in Utah and have an accountant who is suggesting putting me as a ... A: Let me first apologize for the delay in you receiving this answer. The AllExperts.com Website has ...
Business Like Kind Exchange	11/23/2005
Q: Can a corporation owning a restaurant sell one location and purchase another through a like kind ... A: In theory you could 1031 the assets; equipment and furniture. But your value in those is probably ...
LLC owned by S-Corp	11/16/2005
Q: Since posting my question, I realized that the LLC was a dumb idea. However, my ultimate goal was to ... A: No. You still have to pay SE tax on the sub-s. The big savings that everyone promotes is that "Not ...
NOL and dividend income	11/16/2005
Q: I have an NOL with a corporation and I haven't filed the return since tax year 2000. Can I still ... A: You can file tax returns for 2000, 2001, 2002, 2003, 2004, and soon 2005. Losses can be carried ...
$80,000 exemption for working overseas	11/15/2005
Q: I work for a major chemical company based in the US. I worked overseas from late 2003 to late 2004. ... A: Hmmm, that's a new one. What you have is a legal Argument. they will argue the contract says you ...
LLC owned by S-Corp	11/15/2005
Q: I am currently the sole owner an S-Corporation. I plan to start another company as an LLC, which ... A: The IRS has declared an LLC to be a "disregarded entity" for tax purposes. That mans that if the ...
Tax Question	11/15/2005
Q: I am trying to calculate how much stock I would have to sell each year to collect $30,200 per year ... A: If you have been investing and "marking to market", that means paying taxes on the gain as it ...
tax on wood pellet fuel or not	10/18/2005
Q: Should you or should you not be taxed on your purchase of wood pellets used to burn to heat your ... A: If you are asking for a political opinion, I believe that gov't spending should be reduced, and that ...
Lost tax documents	10/17/2005
Q: Fritzler, Is there any way I can get a copy of my 2004 tax returns (1040s) and my W2s? I cannot find ... A: Yes you can call the IRS and ask for copies of your tax returns. Live Telephone Assistance Call ...
LLC Corporation Tax advantage	10/15/2005
Q: Fritzler I will incorporate in the state of Massachusetts as a multi member LLC. Can you please tell ... A: Real corporations pay far lower taxes, have better deductions, and are far less likely to be audited ...
Do I need 2 schedule C's?	10/14/2005
Q: I have been a massage therapist for 13 years, working in a salon where I rent space from the salon ... A: You would only file one schedule c and account for all your business transactions as a group. Filing ...
Court Order	10/13/2005
Q: .. Thanks for volunteering your expertise, which sounds VERY impressive!! This is probably a Legal ... A: With Declarations or affidavits from each of the family members, preferably predating the win, you ...
Thank you - these were paintings...	10/10/2005
Q: ..Greetings and thank you! To lower our tax burden, my wife and I want to donate about five of our ... A: An appraisal would be advantageous, at any level so that you can always defend your claim. You can ...
Coorporation vs. LLC	10/6/2005
Q: My husband and I own our home and a strip mall. Due to rental income, we are paying far too much in ... A: An LLC is a disregarded entity for tax purposes, it provides NO tax benefit. If you file an LLC, you ...
Multiple LLC taxes	10/6/2005
Q: I'm currently a partner in a very profitable LLC, for which I pay dearly in taxes. I am now about ... A: A short sighted solution could be to "form an LLC so that the losses help to offset the taxes I pay ...
Independent Contractor Uncollectible Fee	10/5/2005
Q: One follow up, based on the following excerpt from your advice-- "Wait, until it can't be salvaged, ... A: The second part of the explanation would only be valid if it was a true monetary loan from you to ...
Independent Contractor Uncollectible Fee	10/5/2005
Q: I am an independent consultant, providing services to a startup technology firm (a Michigan C Corp). ... A: When it comes to bad debt, there are guidelines to write off the bad debt as uncollectible. IF you ...
Self-Employment	10/3/2005
Q: I am a sole-proprietor business owner and I deal with Real Estate Investing. A close friend has ... A: If he takes that all as personal income, these are the taxes that must be paid; Income tax, social ...
Sole Proprieter Taxes	10/3/2005
Q: I am a sole proprietership providing consulting and design (graphic) services. Occationally, I will ... A: Well, you have options. The expedient option would be to issue a 1099 to each independent ...
accumulated earnings tax potential	10/1/2005
Q: Fritzler First of all let me say Thank you very much for what seems like a very good answer. No one ... A: The "plan" is what moves it from unappropriated to appropriated. If it is earmarked for a particular ...
Capital Gains for a Corporation	10/1/2005
Q: At what percentage are corporations taxed on capital gains? A: For individuals it is important to separate out the types of income received, since each type of ...
Partnerships	9/30/2005
Q: A partnership with two equal shareholders do not deduct travel and entertainment expenses as ... A: If the IRS auditor considered the reason for the travel, and determined that it was not reasonable ...
accumulated earnings tax potential	9/30/2005
Q: While the owner of an insurance agency we accumulated $500,000 in assets which we intended to use ... A: The excess retained earnings tax is a common point of discussion, and needle used as a scare tactic ...
Capital Gains Taxes	9/26/2005
Q: I am selling a piece of commercial property. I bought it 3 1/2 years ago for $140,000. I still owe ... A: The gain will be calculated on the different between "Purchase Price" and "Sale Price", in your case ...
Tax returns for inactive business	9/25/2005
Q: I incoporated a business in CA Aug of 2004. However, the business has never had any operations in ... A: Yes you can file a tax return with all zeros. If you fail to file a tax return you will get a ...
500k exclusion	9/25/2005
Q: But our house is in the name of a revocable trust that we created 3 years ago with us as the ... A: Yes. A Revocable trust is not a complete transfer. It is still directly tied to you, and the banks, ...
Form 1120 other deductions	9/15/2005
Q: Is there a special attachment for other deductions on the 1120 and what can I deduct for? Are these ... A: actually yes, you can create a schedule of expenses for each catagory, and list the actual expenses ...
Invoicing credits	9/13/2005
Q: Are there any tax consequences for invoicing someone one amount for a subcontracted job, and then ... A: There is certainly nothing wrong with adjusting an invoice to reflect a change in the work done. ...
depreciation of home computers	9/12/2005
Q: Is it possible to depreciate your home computer (even if it is non business related). I have heard ... A: The Government has a program to encourage purchasing depreciable assets thereby recirculating money, ...
S corp salary to shareholder	9/9/2005
Q: Richard, If I have a 1 person S-corp with no employees, should I take a salary equal to my entire ... A: Salary is subject to income taxes, social security, medicare, workers comp, unemployment, and state ...
NOL carry overs ?	9/9/2005
Q: I am a C Corp that basically sold the business end and retained assets like stocks, Cd's real estate ... A: Yes. A corporation can either "carry forward" a loss or carry it back for two years. You will need ...
taxes for a small business	9/8/2005
Q: My husband and I are both clinical psychologists. My husband owns a private practice for which he ... A: If you choose to operate on a personal level, then it is roughly the same. If you do business as a ...
Distributions From S Corporations	9/7/2005
Q: An Indiana S Corporation maintains a balance of treasury stock. The S Corporation is planning to ... A: They would have to do that with after tax dollars. That means a distribution first and then a ...
Question	9/6/2005
Q: I realize you are not a lawyer specialized in Anti-trust Law. However, I'm not a lawyer and your ... A: In no way shape or form. A monopoly would only exist if you had the corner on a specific industry ...
Tax implications on new business	7/18/2005
Q: Am planning to enter into a start-up business in a few years. Business will initially involve day ... A: for tax purposes: You pay personal taxes on all the income if you are a Sole Proprietor, ...
Writing off Donations - being a donor	7/15/2005
Q: If a contact wants to donate a piece of property or goods to our non-profit organization (i.e. an ... A: You can predict 15-35% federal plus any state tax. Higher income will be taxed higher. The donor ...
residual contract taxes	7/14/2005
Q: ------------------------ We are recieving up to 75% of the the money up front. Our Company is a ... A: In addition to the purchase agreement you could create a contract for work, that gives discounts to ...
tax form	7/14/2005
Q: I am a sole proprietor and my business is Telecom equipment brokering. Most of the time I sell ... A: Your local Business License Department is normally the one that administers "Resale Licenses". You ...
partnership	7/13/2005
Q: Can a limited partnership take a deduction for cash donations made to church? ... A: Limited PArtnerships are pass through entities, they pay no taxes and get no tax deductions. They ...
residual contract taxes	7/12/2005
Q: We are a sole-proprietorship. The company is offering to buy our company as long as my husband ... A: You are prudent to consider the possibility the company could "squeeze" you. You didn't give me ...
Business Entity	7/11/2005
Q: My partner and I are starting a business. This business will be retail clothing and the method of ... A: If you intend to keep the money in the business for the first few years, not take a wage for at ...
Sales Tax	7/8/2005
Q: When purchasing a business from someone is there any sales tax? If so approx how much for CA? When ... A: There is no "sales Tax", but you the buyer do not get to deduct the purchase price, so you will pay ...
Leftover assets	7/5/2005
Q: I sold the business end of my C-corp but retained the assets. I no longer have much income coming in ... A: Are you. . . "Done". . . in business? Do you intend to never do business again? from the rest of ...
Tax Law for a SBA and Tax ID	7/1/2005
Q: I am interested in creating a SBA and getting a TAX ID solely for the purpose of being able to get ... A: You can certainly create a tax ID number by filing a SS4. However, you will be required to file a ...
Buisness expense deduction	6/29/2005
Q: I am going on a family/buisness trip. The first half of the trip will be with my family. Then they ... A: The true benchmark of whether an expenditure is deductible, is whether "you can sell that deduction ...
accounting	6/21/2005
Q: Can you please explain the advantages and disadvantages of operating as a partnership as compared to ... A: Both forms of business attach ALL liability to the owner(s). There is no separation, the business is ...
Is Timber Gain Unrelated Business Income?	6/12/2005
Q: I am a treasurer of a tax-exempt hunting club in Pennsylvania. Our receipts for the fiscal year ... A: Directly from the IRS: exceptions to the UBTI: "Gains and losses from disposition of property. ...
Single member LLC vs "S"Corp	6/8/2005
Q: I created my business entity last year as an LLC, single member at this time. I flow my profit ... A: The IRS has been very clear that the LLC will not provide any tax benefit. They have designated the ...
tax treatment of sale of real estate	6/7/2005
Q: Fritzler: I have an LLC client that owns and operates residential real estate properties. The LLC ... A: If the LLC is a single member LLC, then you would be filing as a schedule C on his personal tax ...
late filling - use current forms?	4/5/2005
Q: I have not filed 2003 and I will be a bit late filling 2004, both my personal and my corporation ... A: Turbo tax software is only good for one year. If you want to use turbo tax to create a 2003 return, ...
Saler of assets	3/8/2005
Q: This is a sample case with fake numbers: I have a Fixed asset that in an account, initial value is ... A: $80,000 would be treated as "recaptured depreciation" taxed at regular income tax rates. $20,000 ...
S-Corp taxes vs. personal taxes	3/7/2005
Q: Mr Richard I would like to get some clarifications on my taxes concerning funds used from personal ... A: An S-corp is a passthrough entity, meaning that all the tax liability will flow through to your ...
1120 Gain on Installment Sale	3/7/2005
Q: Business runs 1 bowling center and buys a 2nd bowling business in 1992(no real estate involved) for ... A: Conventional wisdom would have suggested that a 1031 exchange (if available) would have allowed you ...
1120 Gain on Installment Sale	3/7/2005
Q: Business runs 1 bowling center and buys a 2nd bowling business in 1992(no real estate involved) for ... A: The gov't wants all their money today, not over the next 10 years. Since the sale is over and has ...
dissolving an llc, creating an s corp	3/5/2005
Q: I am preparing a tax return (federal, state of Mi) for a company that was operated as an LLc until ... A: Each entity would file a separate tax return for itself for whatever time in the tax year it was ...
LLC TAXES	3/4/2005
Q: RECENTLY FORM AN LLC AND WOULD LIKE TO KNOW...I AM REQUIRED TO FILE AN SCHEDULED 40 QUATERLY EVEN IF ... A: AS you are becoming aware, the LLC is considered a "Disregarded Entity" by the IRS. For tax ...
Donations: deductable: Then who actually pays?	1/4/2005
Q: I have a question, and it might be very stupid, I always hear tax deductable for donations, does it ... A: No, that means you have reduced your net income and therefore reduced your taxable income, reducing ...
Tax loss selling/self dealing conflict	11/21/2004
Q: Bill manages an investment limited partnership. Toward the end of a tax year, Bill decides to sell ... A: AS long as the taxes are paid the IRS doesn't really care. However, the Limited partners probably ...
real estate taxes	11/21/2004
Q: I want to buy real estate for investment purposes. I know partnerships are usually used but thought ... A: If you are planning on making a profit a real corporation, (C-corp) is your best option. Taxes are ...
Tax preparation	11/19/2004
Q: Richard, I own and reside in a primary home. I recently got an owner/builder home construction as ... A: As an individual you are very limited in any tax advantage. IF you made a short term gain on the ...
Short year Depreciaton	11/18/2004
Q: Can you explain what is Short Year Depreciation? If you point me to any link for more information ... A: Short year depreciation is when an asset is brought into service the first year at less than a full ...
share of income in s corporation - how to show in form 1040	11/18/2004
Q: I have a question regarding Profit of S Coporation. If a S Corporation has net profit of $X. and ... A: The entire amount of the net profit can be retained by the corporation. You can also make ...
S-Corporation Business Formation	11/18/2004
Q: My husband is needing to set-up a S-corporation. I am a CPA and am familiar with some of the ... A: You won't need to "reserve" the name if you just file it. Federally, it's straight forward: 1120S, ...
LLC property - 1031 exchange	11/16/2004
Q: If an LLC owns more than property, can one of the properties in the LLC be 1031 exchanged into ... A: Yes. the new property must be declared within 45 days and the deal closed with 180 days of the sale ...
NOLs for Corporations	11/9/2004
Q: Assume a C corporation incurs a loss of $60,000 in its first year. Now for the second year the ... A: Normally the Operating loss is carried by the Sub-s, and ultimately lost, after 7 years. This ...
International Tax Question (Japan-Canada)	11/8/2004
Q: I'm a Canadian non resident based in Japan. I've been investing in Canadian Real Estate (SFR, Duplex ... A: I believe Canadian law parallels US law, of which I am more familiar. Distributions to individuals ...
sec 179 deductions	11/5/2004
Q: Richard, I had taken the sec 179 tax decution in 2002 with the purchase of a new truck for my ... A: "No" should never be a good enough answer from your CPA. If they are unwilling to explain it so that ...
Capitol Gain on sale of business.	11/2/2004
Q: I have been approached to sell my sole prop. bar/restaurant on a contract-for-deed. It is ... A: No to both parts of that question. No you won't be paying capital gains on the whole amount of the ...
S corp Taxation	11/1/2004
Q: When I got laid-off in February I started my own business while receiving state unemployment ... A: You might be able to write off some of losses against your income taxes. Not Payroll taxes. ...
LLC - Organizational Cost Amortization	10/31/2004
Q: I am in the process of starting up a small business. I have completed the necessary steps to be ... A: Obviously, without income the rest of the tax equation becomes meaningless. Effectively, you would ...
Corporate Merger	10/30/2004
Q: I currently have a client who is a S-Corp, but is changing to an LLC. They started the S-corp in ... A: The most appropriate process would be for the Sub-S to exchange assets for ownership interest in the ...
LLC securities holding	10/21/2004
Q: What is the cost of forming the nevada corporation with bank account, domiciliation etc... and what ... A: The "Comprehensive Business Enterprise" that provides the corporation; assistance in structuring ...
LLC securities holding	10/20/2004
Q: Is the LLC convertible into a corporation? Alternatively, how much is your fee to form and help with ... A: An LLC is not "convertible". They are distinctly different, closing one and opening the other would ...
Series LLC	10/19/2004
Q: I would like to trade on the stock exchange, buying, holding and selling shares. I have a LLC in ... A: The state does not care what you do with the corporation, you are not required to notify them of how ...
LLC securities holding	10/19/2004
Q: We have a LLC registered in Delaware USA. Both members are non residents aliens (Europe). The LLC ... A: According to the IRS: for tax purposes, the LLC is a "Disregarded Entity". It has no status nor is ...
Incorporating	10/14/2004
Q: I run an online magazine, and would like to incorporate my business. I have reviewed the options ... A: Contact your local Secretary of State. You can file it yourself. That will be your least expensive ...
Asset purchase	10/13/2004
Q: We are purchasing the assets of a business. Do we account for the equipment & goodwill on the books ... A: Lets break the transaction into two parts: the business as it relates to the the Sub-S and the Sub-S ...
LLC or Other???	10/12/2004
Q: A friend and I are considering partnering to buy and renovate and then resell real estate. Currently ... A: To be at a 15% capital gains tax rate personally, you would have to hold the property for more than ...
could this go on a sch. C or do I have to file a partnership return	10/4/2004
Q: Me and my friend are interested in starting our own part-time house cleaning business. We would ... A: AS in most things, cheapest is usually far more costly in the end. Your lowest startup commitment ...
Social Security	9/29/2004
Q: I would like to not pay into Social Security anymore. I currently am a V.P. (Independant ... A: Allow me to clear a few points. You have already lost everything you have put in. Social Security is ...
S-Corp in Florida	9/24/2004
Q: I recently started a new job and have always filed a W-4 form with the employer and received a w-2 ... A: You're not technically getting double taxed on FICA, you are just paying all the tax, both the ...
Special Depreciation Allowance-Leased Property	9/21/2004
Q: I cannot find any guidance from IRS publications on the following situation. Taxpayer is part of a ... A: A storage unit complex is not farm buildings, even if it stores farm equipment. It is a commercial ...
Questions related to business structure etc	9/13/2004
Q: I'm interested in forming two business entities: Business Entity A - This would be for investing ... A: 1. yes, no. 2. yes, no. 3. All of the MOST successful large, medium, and small businesses are real ...
Corp. taxes	9/13/2004
Q: I married the person in question after the business was started and in trouble ( I had no pryer ... A: The IRS has "innocent spouse" rules that they must operate under. They could easily attach his ...
Small Business	9/12/2004
Q: Fritzler, We recently incorporated our small business into a C-corp. So far, we've been all but ... A: You are the subject of the primary debate regarding "sub-s vs C corp". Conventional wisdom is: if ...
LLC TAXES	9/10/2004
Q: ------------------------- Followup To Are you suggesting that I dissolve the LLC and do an INC? If ... A: Yours is a very common question. Most accountants recommend a sub-s ifyou intend to incorporate. ...
LLC TAXES	9/10/2004
Q: I registered a LLC with the state of texas with two members. Now I want to apply for the EIN. My ... A: As you have discovered, the IRS deems the LLC to be a "disregarded entity". For tax purposes right ...
selling a sub s corp	9/7/2004
Q: Richard, We have had a daycare for 10 years, and it is a sub S corp. My wife owns 51%, and I 49%. ... A: Most people look forward to long term cap gain taxes, since they are lower than other types of ...
Homeowner Association -- taxable income	9/5/2004
Q: We have a condo association that receives rental income from roof-top cell phone antennas. We have ... A: Regardless of profit or loss you are required to file a tax return each year. You did not state ...
LLC	9/5/2004
Q: My husband and I are buying an office building. Could we form an LLC to take advantage of the bonus ... A: For tax purposes, the IRS has deemed the LLC to be a "disregarded Entity". The IRS does not ...
selling a sub s corp	9/4/2004
Q: Richard, We have had a daycare for 10 years, and it is a sub S corp. My wife owns 51%, and I 49%. ... A: There are a lot of small calculations to consider, but here are the broad strokes. The Sub-S is a ...
salary and wages	9/2/2004
Q: I will have accrued wages/bonus/vacation pay at my fiscal year end. How much time do I have to pay ... A: I'm not clear, you as an individual almost always must file taxes on a calendar basis, not a fiscal ...
Question Regarding Solo 401K	8/31/2004
Q: First of all, thank you VERY much for your quick reply regarding my previous LLC question to you. I ... A: AS the name implies the solo/individual 401k is related to you personally. Either entity could ...
Purchase of a new business/Taxes etc.	8/29/2004
Q: Your help will be appreciated and it is admirable that you find the time to volunteer for this ... A: The purchase price is your capitalization, and becomes your "basis". That basis is subtracted from ...
Shall I hire an accountant for my LLC?	8/27/2004
Q: Fritzler, I have just started my own LLC company working as an indepedent consultant. I do not have ... A: Tony, An LLC is not a corporation. The importance of that statement will become evident as I ...
Re Taxation of EE bonds	8/23/2004
Q: I am a CFP and am helping some clients along with their attorney fund the B side of the trust now ... A: One of the basic tenents of funding a trust is to do it with appreciating assets. Living trusts are ...
Business Expenses?	8/20/2004
Q: I own a non-profit and a for profit organization and wondered if I can have one or both companies ... A: You would be required to take it as income and pay your higher personal taxes. Unless, those ...
Sun S Corps and rental real estate	8/18/2004
Q: Is there a limit on the amount of income an S Corp can receive from rental real estate? I thought it ... A: There is no limit as to how much income a Sub-S can receive, however there are many many limitation ...
Real Estate Investment	8/17/2004
Q: Let me start by saying I am a CPA who is not familiar with most of these issues, I work in the ... A: The reason that an LLC was recommended was to limit your individual liability. The reason for each ...
S corp and taxes	8/16/2004
Q: I have recently established an S. Corp. What is the difference in taking money out of the ... A: your question is the essence of the "perceived" benefit of the Sub-S. Passive income is not subject ...
tax question	8/13/2004
Q: I have a question about the Ga tax law. I work for a small business that is incorporated. I work ... A: The types of tax they take out are correct. Social security, and medicare should be 7.65%. Your ...
LLC or S Corporation?	8/10/2004
Q: My mother and I are planning on opening a government contracting business in the state of VA. There ... A: Let's look at the background facts, then I think you can make a good decision on how best to ...
1120S M-2	8/5/2004
Q: Having very little experiance with S Corp tax returns, a question has popped up in our office. ... A: No. Shareholders equity includes contributed capital and asset gains in addition to other possible ...
Real Estate taxes	8/5/2004
Q: I may have mis-communicated my real questions. If I owe 75K on a house, and I refinance it for ... A: Borrowed money is not taxable. However, if you borrow it and spend it, when you go to sell the ...
Real Estate taxes	8/4/2004
Q: I am planning on investing in real estate. My question is this. If I purchase a house for 75K and ... A: What you are referring to is a 1031 exchange (section 1031 of the Internal Revenue code). It is not ...
salary taxes	7/4/2004
Q: .. I have recently accepted the position of Pastor of a small church. I get paid a salary. My ... A: From your explanation, you are being paid as an independent contractor (1099). You will be ...
Small business--sole proprietor?	6/2/2004
Q: I am just starting a very small event planning business, to serve only my local area of Santa ... A: Let me address liability second. If you are going into business to make a profit, corporations pay ...
TAXES	5/25/2004
Q: Is there any problem having a company in one state and the corporation filed in Nevada, for example, ... A: Filing in Nevada would not give you a tax break. In fact if that is all you did, you would actually ...
Amortisation of Intangibles	5/20/2004
Q: Richard , we have acquired a certain company under an asset purchase agreement , and the allocation ... A: The affect of depreciating an "appreciating asset" is that the depreciation tax credit is often ...
Amortisation of Intangibles	5/19/2004
Q: As per Statement of Financial Accounting Standards (SFAS-142) goodwill is not to be amortised but ... A: You are correct that the Tax code was not based on good accounting standards. Keep in mind that ...
FILING REQUIREMENTS	5/19/2004
Q: Sir , I am an accountant of a NJ based LLC, I intend to file a tax statement with IRS. I have ... A: I assume from your plan that the LLC has more than 1 member. If it is a single member LLC then it ...
Taxation of dividends - sub S Corporation	5/12/2004
Q: Frizler: My name is Caroline Seigel, and as of April, am a new small business owner in New Mexcio. ... A: Both of those answers are based upon correct information, but somewhere along the way there is some ...
k-1 for LP	5/12/2004
Q: Invested in Fund of Fund LP in '02 through a custodial ira. My '02 k-1 was issued using my ss#, not ... A: The IRA is technically yours, and under your social security number. The custodian of your IRA is ...
LLC Transfer Tax	5/10/2004
Q: I prepare the 1065 and K-1's for a small real estate partnership in New York, I am not however an ... A: Allow me step on the soapbox for a moment: The planned transfer from partnership to LLC is at best ...
tax loss pass through	5/8/2004
Q: What are the limitations on using a loss from a Sub S corp on a personal return. A: Limitation 1: 1 in 3 and 2 in 5 rule. ALL Losses, even from previous years, can be disallowed if the ...
LLC	5/7/2004
Q: ON MARCH 30. 2003 THERE IS A SECURITY AGREEMENT EXCEUTED WHEREBY THE LLC (DEBTOR) EXECUTES A COUPLE ... A: If the members surrendered their ownership interest and it is a complete exchange, then the k-1 ...
Foreign natioanal wanting to start business in USa	4/24/2004
Q: I have a question on behalf of a friend. The person in not in states but wants to start an online ... A: He could file an LLC, however, since the entire profit of the LLC must be credited to the Owners, ...
Taxes for a Company - offsets related to Charities	4/22/2004
Q: I have some specific questions on tax regarding companies giving annual donations to charities: ... A: You are correct rules will be different in each locale. For the US, the deduction for charitable ...
form 6198 at-risk limitations	4/21/2004
Q: I'm from New York and towards the end of last year I bought rental real estate with 2 partners. We ... A: Your question was quite provocative. Are you at risk? Well for IRS purposes: "At Risk" does not ...
LLC with product sold in different states	4/21/2004
Q: I am helping a friend put together an investment prospectus for an independent film he's trying to ... A: The definition of "doing Business" in a particular state is having an address, bank account, ...
condo partnership	4/17/2004
Q: I am a landlord who has been approached by a developer to join him in a condo-conversion of my ... A: I agree that converting to condos and selling spearate units "Could" be advantageous, but if you are ...
Tax information for LLC startup	4/15/2004
Q: I am going to start a small LLC in New Mexico and was wondering what the carry back/carry forward ... A: Sorry I forgot to attach the article, here it is: Limited Liability Companies: What, When, and ...
LLC income	4/15/2004
Q: I am starting a new job through an LLC as a 1099 Consultant. Is the LLC the best entity to use? ... A: The LLC is considered a "Disregarded Entity" by the IRS for tax purposes. It does nothing for you on ...
Federal Taxes and an LLC	4/13/2004
Q: Fritzler: I do hope that you can offer me some sound advice. I was half of a partnership in the ... A: Since the LLC has to have a calendar fiscal year the quarters start April, July, October and ...
Increased Income less Interest deducted	4/11/2004
Q: I make about 60,000 a year and I have one home and one rental property. the rent for the rental ... A: I believe you are asking if trading in the interest rate for a tax rate is a benefit, and yes it ...
sole proprietor or sub s corp, which is better?	4/6/2004
Q: My husband and I now have a sole proprietor business. Every year we get hit with a huge social ... A: Corporations require some formality, such as writing sown business decisions and keeping that ...
Business Extension	4/4/2004
Q: How do I file for an extension for my business, the same way I did for my personal with the 4868 ... A: If your business is a schedule C then it is part of your personal return and covered under the ...
Backup Withholding	4/2/2004
Q: I am a Member and Manager of an LLC classified as a Partnership for Federal tax purposes. My ... A: For tax purposes the IRS considers the LLC to be a "Disregarded Entity", that is why you are filing ...
S corporation and taxes	4/2/2004
Q: Is there any one place that I can find out all the taxes you pay with an S Corporation in Florida.. ... A: Doing business as a Sub-S provides you only a very small tax advantage over doing business as a sole ...
tax forms	3/31/2004
Q: my question was regaurding my 1040 individual tax returns. Is there a way i can print them out from ... A: If you are looking for a copy of your filed 2002 tax return, the only place you could get that would ...
Rock Band	3/29/2004
Q: I am trying to give advice to a band about how they can be smart about the money they earn as far as ... A: Is the band profitable? If not, trying to legitimize it for deductions would ultimately result in ...
Sale of Publicly Traded Partnership, K-1, etc.	3/28/2004
Q: Can you help? Please bear with my questions... I am desperate! I stupidly bought a publicly traded ... A: It is a stock purchase and sale. The partnership aspect is moot. You would file the same if it was a ...
K-1 (form 1065)	3/28/2004
Q: 1) my wife is a secret shopper for which I am her driver. can I file schedule C for her, or do I ... A: 1. If she gets paid as an independent contractor, her income would be applied under schedule C. If ...
parts use tax	3/26/2004
Q: I'm setting up a resale company. Where can I find specific information about parts use tax? A: Resale rules are governed by local business license departments. Each municipality writes their own ...
LLC tax accural basis or cash basis	3/26/2004
Q: I own a single member LLC. It was incorporated in VA in Feb 2003. Last year I did some consulting ... A: In reality, you are doing all of the business as schedule C business. The LLC is a disregarded ...
2002 1099-Misc correction	3/24/2004
Q: Richard - I had a vendor inform me that the 1099-MISC our company sent them in 2002 was incorrect. ... A: The IRS website (www.irs.gov) has all of the past forms, you will need to you the "expert ...
taxes to be paid by a import company	3/23/2004
Q: ------------------------- Mr. Richard Fritzler Thank you for your answer it was very ... A: If you merely registered the name for a business license/resale permit, you filed as a sole ...
S-Corporation start up costs	3/23/2004
Q: My Wife and I are starting our own Electrical business and have spent personal funds on purchasing a ... A: The IRS "encourages" you to consider your initial invest as capitalization. By encourage I mean they ...
LLC payroll	3/23/2004
Q: I am setting up a one person LLC, will be filing Sch C on my personal tax return. My question is: ... A: AS you realize, the owner on a schedule C is required to pay all of the same payroll taxes for ...
s-corp	3/23/2004
Q: i just registed a s-corporation in VA 4 months back. We are three directors. Two of us got the ... A: You won't have to issue a new 2553. When the Corporation files is 1120S you will declare the owners ...
expenses and distrubution in llc	3/21/2004
Q: i own several llcs, primarily as holding companies for real estate rental properties... i would like ... A: If you are the sole owner of the LLC's then it doesn't matter. The IRS has decided that an LLC is a ...
S-Corporation	3/18/2004
Q: My husband and I have a s-corporation and we are both employed by other companies. If we take a ... A: REgardless that you have other jobs; the IRS will require that you take a portion of the income as ...
LLC filing	3/17/2004
Q: My wife and I formed and LLC to hold a rental house we purchased in July, 2003. We bought the house ... A: Technically, If it is a multi member LLC you would need to file a partnership return and then apply ...
LLC filing	3/16/2004
Q: My wife and I formed and LLC to hold a rental house we purchased in July, 2003. We bought the house ... A: The IRS deems an LLC to be a "Disregarded Entity". for their purposes (and for the courts) the LLC ...
partnership taxes	3/16/2004
Q: my brother and i are starting a partnership in north carolina. what taxes do we have to file ... A: A partnership would file a partnership return at the end of the year. It would distribute all of the ...
LLC and deductions	3/16/2004
Q: If i were to have 1% ownership in a bar/ club in NYC and live in PA, what would I be able to write ... A: Allow me to try and draw the line of distinction: Ownership allows you no writeoffs. You personally ...
Corporative Liquidation	3/16/2004
Q: We liquidated our corporation and completed all appropriate IRS forms (4797 - 966 etc). With NOL ... A: Since you took the final funds as a dividend instead of a return of capital, you will need to handle ...
Sub Chapter S Income	3/15/2004
Q: I have two questions 1. Can I elect to have a Subchapter S Corporation taxed as a regular ... A: The difference between a Sub-S and a real corporation is; How it is taxed. You actually started with ...
1120S; Deferring Losses to next tax year	3/15/2004
Q: Is it possible to defer 2003 losses to 2004? If possible, What pulications and forms should I use to ... A: AS you know a Sub-S does not pay any tax on its income, nor does it carry any credits for its ...

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