| Subject | Date Asked |
|
| Reporting lottery winnings | 10/4/2008 |
Q: I work for a charity and we will have a lottery where the winner will receive a car that was donated ...
A: You need to issue a 1099-misc to the winner stating the appraised value of the vehicle. Not what ...
|
| 1041 K-1 distributions | 10/4/2008 |
Q: My sister died in 1999. I was the successor trustee of her living trust. In her trust, she left my ...
A: It really depends on the trust agreement as to whether the trust or the beneficiaries pay the tax on ...
|
| Tax Liability | 10/4/2008 |
Q: I'm currently a college student and I work part time. I moved out of my house about 5 months ago and ...
A: You can claim exempt from Federal withholding if you had no tax liability last year, and expect no ...
|
| Stock Sale | 10/3/2008 |
Q: A client of mine, a NY S-Corp is selling their stock, which is not something I usually come across. ...
A: If his stock is sold for $100,000 the gain would be determined by the difference in the basis of the ...
|
| Tax Liiability on Historical Property | 10/3/2008 |
Q: Expert: John Kirk CPA Oct.3, 2008 Subject: Town Tax Liability on Historical Property in ...
A: I really can't answer that, that is something the town council should have discussed in the purchase ...
|
| Foreign Income Tax Exclusion | 10/3/2008 |
Q: If I were to work in Iraq from April 09 - April 10 as a U.S. contractor in support of the military ...
A: For you to qualify for the full exclusion of $87,600 for 2008 you need to have lived in the foreign ...
|
| Stock Sale | 10/2/2008 |
Q: A client of mine, a NY S-Corp is selling their stock, which is not something I usually come across. ...
A: Since it is a transfer of stock ownership, you are correct in that it is not a bulk sale. Under sec ...
|
| property tax | 10/2/2008 |
Q: I'm about to close on my new house in two weeks. We don't have date yet, but it will probably be ...
A: It should be settled on your closing statement. If you close after 10/15/08 and the property tax ...
|
| Filing exempt on W-4 | 10/1/2008 |
Q: I do the payroll for a small company and I have employees who insist on switching back and forth ...
A: No, the only thing you can do is provide them with the possible penalties they are subject to by ...
|
| MIA accountant during Tax deadline - please read for detail. | 10/1/2008 |
Q: We hired a certified CPA to help us take care of our back taxes. She was able to post-pone the ...
A: Yes, you can call the state accountancy board and report her actions to them in the form of a ...
|
| Filing exempt on W-4 | 9/30/2008 |
Q: I do the payroll for a small company and I have employees who insist on switching back and forth ...
A: Under Reg. 31.3402(f)(2)-1(c) an employee who claimed "no liability" must file a new W-4 within 10 ...
|
| 501(c)6 Corporation | 9/30/2008 |
Q: My Chamber of Commerce is trying to figure out if we are allowed to make charitable contributions ...
A: The donations are allowed provided that the donation is permitted under the Articles of Organization ...
|
| Form 1065, Sched K1, foreign transactions | 9/30/2008 |
Q: Could you please tell me the difference between line 16b and line 16c on Form 1065 Sched K? I don't ...
A: Line 16b is used to report total gross income for the partnership, both foreign and domestic. Line ...
|
| Non-For profit federal income tax | 9/29/2008 |
Q: I'm the secretary for a non-for-profit club on Long Island, NY. Let me give you a little background ...
A: You should have articles of incorporation and Bylaws that were drafted by an attorney. The ...
|
| Estate | 9/28/2008 |
Q: I really have two questions for you. First one...If an estate is under the $2 million guideline..I ...
A: 1.Generally no, but if the beneficiaries live in one of the few states that still has an inheritance ...
|
| Trust income | 9/28/2008 |
Q: I am trustee for a trust that distributes income as needed. There are two properties-one on the ...
A: The sale of the property which results in capital gain is taxed to the trust, since income is not ...
|
| State Corporate Tax on Trucking Companies | 9/27/2008 |
Q: My wife and I own an S-Corp trucking company in Missouri. We received notice from Nebraska that we ...
A: You should be filing state income taxes to all states that you operate in. You allocate to those ...
|
| Taxes | 9/26/2008 |
Q: I recently started a catering company, S-Corp. My question is my employees are responsible for ...
A: You are taxed on the net after expenses, so put away enough to cover your federal and state ...
|
| Taxes | 9/25/2008 |
Q: I recently started a catering company, S-Corp. My question is my employees are responsible for ...
A: Your employees are employees, not contractors, you direct their activities, so by common law ...
|
| amended joint return after divorce | 9/24/2008 |
Q: My wife and I filed a joint tax return in 2006. We were divorced in 2007. Our divorce decree states ...
A: You can file the amended return without worrying about the ramifications if the losses are not ...
|
| dissolving a Sub chapter S corp | 9/23/2008 |
Q: I am a 100% stockholder of a small family sub S corp and I want to dissolve it. My question ...
A: The assessed value of the land is not its fair value. You would have to use the appraised value of ...
|
| Payroll/ S-Corp | 9/21/2008 |
Q: My employers put their personal nannies on their corporations payroll and use company funds to pay ...
A: If they charge the wages and payroll taxes to an owner's distribution account instead of deducting ...
|
| dissolving a Sub chapter S corp | 9/20/2008 |
Q: I am a 100% stockholder of a small family sub S corp and I want to dissolve it. My question ...
A: Dissolve the corporation and the basis in your stock becomes the basis of the assets distributed to ...
|
| Trusts | 9/19/2008 |
Q: My father passed two years ago and left his property in trust. The trust is still in his name. The ...
A: It depends on the trust agreement, If the trust is required to distribute income to you, you should ...
|
| estate tax | 9/18/2008 |
Q: My grandmother died in 1976, leaving a bypass f/b/o trust set up for her grandchildren. My mother ...
A: I assume by a bypass trust you are referring to an AB trust where your grandmother set up a trust ...
|
| Income Loss | 9/18/2008 |
Q: I was partner with a friend of mine to operate a business. The business's last year ordinary income ...
A: The termination of the partnership gives rise to a capital loss to the extent that your capital ...
|
| 1099 for foreclosure | 9/15/2008 |
Q: My husband has a mortgage of $470,000 home equity loan of $60,000 and the house is about to go into ...
A: Filing for bankruptcy will relieve you of any taxes on the forgiveness of debt which is dismissed ...
|
| STCG tax on recent partnership | 9/15/2008 |
Q: After working for 3 years for a firm, I was made partner this past July, 2008. They are now ...
A: It would depend on state law whether the partnership is dissolved. If so, you are out of luck. Are ...
|
| payroll tax question | 9/13/2008 |
Q: We were using an out of town payroll company in 2006 that went out of business in April 2006 and ...
A: It is your responcibility to make sure deposits are made. You may be able to get out of the ...
|
| Boxing sponsorships/endorsements | 9/12/2008 |
Q: I have a publicity firm and a large part of the duties of a publicist is obtaining sponsorships for ...
A: It may be an advertising expense or a partnership depending on how the agreement is written. In ...
|
| Life Estate House Sale | 9/9/2008 |
Q: My grandfather passed away in April 2008. His house was put into his children's names but he lived ...
A: Assuming that your grandfather put the house into a life estate, the house is transferred at fair ...
|
| Salary verses dividends | 9/9/2008 |
Q: My business partner 80% owner, and myself, 20% owner take dividends and a salary. I know that his ...
A: It really is a matter of state law, but most states require you to recapitalize your capital ...
|
| S-Corp Final K-1 | 9/4/2008 |
Q: I received a final K-1 from an S-Corp I as a 15% shareholder in. I exited the company through a ...
A: The loss for 2007 has already been reflected on a day-to-day basis, so all the loss reported on the ...
|
| Partnership Buyout | 9/3/2008 |
Q: I currently own a business with 3 other partners. I am looking to buy out two of them to share ...
A: The buy out is reflected as a transaction between you and the other partners personally, it does not ...
|
| Taxes Percentages and | 9/3/2008 |
Q: I own a small business in VA. It's an LLC and taxed as sole proprietor. It's been opened for about 3 ...
A: You are required to file income taxes reflecting the income of the LLC to both the Federal ...
|
| tax rate for traditional ira | 9/2/2008 |
Q: Beneficiary of my sister's rollover ira was irrevocable trust. Trust is to be divided among ...
A: Depends on the trust agreement. If the IRA was rolled over into separate IRAs for each beneficiary, ...
|
| gift tax | 9/2/2008 |
Q: My CPA said that the gift tax exemption is $13,000 this year. Every place I looked on-line has said ...
A: For 2008 the exclusion is $12,000, the rate for 2009 has not been determined as of yet, but since it ...
|
| Edducation expenses | 9/2/2008 |
Q: Kirk In what circumstance, the high education related expenses such as tuition, room and board can ...
A: The expenses need to be incurred for post secondary education of the taxpayer, taxpayer's spouse or ...
|
| Inheritance | 9/1/2008 |
Q: My mother stands to inherit real property upon the death of her elderly sister. The both live in ...
A: The debt on the property should be paid off by the estate. If the estate has no assets other than ...
|
| 457b Plan | 8/29/2008 |
Q: Kirk, Thank you for the opportunity to ask you this question. I have a 457b plan to which I have ...
A: It would be extremely difficult to find a trustee that would perform the kind of services you are ...
|
| proper accounting for startup costs for LLC? | 8/29/2008 |
Q: Suppose that one or more people incur startup costs for an LLC. Then they register the LLC and open ...
A: Any start up cost paid by the members before the formal organization of the LLC should be booked as ...
|
| copyright sales | 8/27/2008 |
Q: I own a copyright on a piece of literature. I have been approached to sell it. If I do sell (was ...
A: The sale of the copyright would be considered ordinary income and would be taxed at regular tax ...
|
| forming a 501c3 | 8/17/2008 |
Q: I am working with my local church to create a 501c3 organization to provide transitional housing for ...
A: Your church may already have a tax exemption, if you are a member of a national denomination. In ...
|
| House sale taxable?? | 8/16/2008 |
Q: Before my dad died, he put his house in mine, my brother and sister's name. We sold the house for ...
A: It depends on your state law and how the property was transferred. Once those facts are known, we ...
|
| Will i have to pay in tax time? | 8/16/2008 |
Q: question- if i make Aprox 2,000 a month live by myself and goes to college full time will i have to ...
A: Your sister is not correct in that you will need to pay approximately $2,000 for 2008 taxes. There ...
|
| LLC tax liability for undistributed earnings | 8/16/2008 |
Q: My ex-spouse was self employed and had an LLC. An LLC requires at least two members so I was named ...
A: Was there any settlement of your ownership of the LLC in the decree. If so, you have already ...
|
| DBA and/or Corp. | 8/15/2008 |
Q: I opened a corporation for a business a few years ago that I never launched. I never got around to ...
A: No problems with the IRS as no reportable income. However, the state has probably already suspended ...
|
| state taxes | 8/15/2008 |
Q: I work for a company headquartered in Louisiana. They withhold Louisiana state taxes from my pay ...
A: Since you work in Arkansas, they are required to withhold Arkansas taxes. Sounds as if they are just ...
|
| LLC | 8/14/2008 |
Q: I’m changing my small part-time handyman business from sole proprietorship to LLC (limited liability ...
A: As a single member LLC, you are considered a disregarded entity unless you chose to be taxed as a ...
|
| Child support | 8/14/2008 |
Q: If a father is paying child support...can the claim that as a dependent on their withholdings for ...
A: The exemption determination is predicated on several factors such as custody, support and adjusted ...
|
| NOL / c-corp converted to s-corp + LLC | 8/13/2008 |
Q: If I convert a closely held c-corporation, which is owned 100% by my wife and I to an s-corp can a ...
A: Yes, but converting to a S-Corp will not allow you to take advantage of the NOL. The NOL is ...
|
| S-Corp & Distributions | 8/13/2008 |
Q: I recently formed an S-Corp for a part-time business that I run in my spare time. I am also a ...
A: Distributions are not a deduction from income, so they are not taxable to you unless you exceed the ...
|
| timber tax | 8/11/2008 |
Q: I just sold some timber and rec'd $35,000. Do I need to contact the IRS now and go ahead and pay ...
A: If you pay in at least 100% of last year's tax liability for 2008 taxes you won't be penalized, but ...
|
| Acquiring a tax id and forming a partnership as minors | 8/9/2008 |
Q: John Kirk, My friend and I are earning a moderate amount of money online. While some of the ...
A: You can not form a partnership because you are both minors, However you can create a Trust with ...
|
| File final 1041 before it is due? | 8/9/2008 |
Q: I am the administrator for the estate of my 49 year old sister who died intestate one year ago. With ...
A: The check should be deposited into the estate, what you have is income in respect to a decedent ...
|
| Ordinary Income and Net Income | 8/7/2008 |
Q: Should ordinary income (reported on line 21 of 1120S) link to net income? For example if my 2007 ...
A: Not necessarially, The net income per books is often different than taxable income which is ...
|
| Real Estate Investment Loss | 8/7/2008 |
Q: Several years ago, I and a group of others, as a group, loaned $750,000 to a development group in ...
A: Your loss is a capital loss, and as such is used to offset capital gains. Any loss not offset is ...
|
| receiving beneficiary funds from out of the country | 8/6/2008 |
Q: Kirk, I have recently received a very large amount of money as the only beneficiary. The funds are ...
A: There is no tax consequenses in transferring the money into the USA. Leaving the money in the ...
|
| distribution from trust | 8/6/2008 |
Q: a trust was set up when our father passed,I am a trustee and the income is for the benefit of mom, ...
A: Possibly, depending on your mother's will. When your mother dies, the trust is to end, any income ...
|
| tax consequences of transferring house as gift or sell to sister | 7/31/2008 |
Q: What would be a win-win tax situation for party involve. I own a house that is still has mortgage ...
A: The tax consequences depend on you and your sister's tax bracket, and whether you have a taxable ...
|
| Traditional IRA premature withdrawal to buy first home | 7/30/2008 |
Q: We(myself and spouse) have Traditional IRA Cd's. We contributed 4000 each for 2006 and 2007. As of ...
A: Yes, 1st time home buyers are allowed to receive a distribution from their IRA's for the purchase of ...
|
| unclaimed depreciation | 7/30/2008 |
Q: started a landscaping business in 2000 as a self employed individual. i have never claimed any ...
A: You cannot claim depreciation generated in prior years on a future return, they must be claimed in ...
|
| S- corp and legal fees | 7/28/2008 |
Q: I own an S- corporation. I sued on behalf of myself and the S-corporation to collect income that ...
A: File it as a legal expense on the S-corp return. The offset is an additional capital amount equal ...
|
| business cell phone deduction | 7/28/2008 |
Q: with 2 members (me and my husband). i currently have a family cell phone plan with 3 lines. the ...
A: Your cell phone company can answer that question for you, but designating the business lines will ...
|
| s corp income reported | 7/27/2008 |
Q: My ex- husband owns a snap-on tool franchise, listed as an S-corp. I've had difficulties proving the ...
A: Hard evidence would be any documentation that can show that transactions were not recorded, or non ...
|
| S- corp and legal fees | 7/26/2008 |
Q: I own an S- corporation. I sued on behalf of myself and the S-corporation to collect income that ...
A: So according to the court you are paying damages for breach of contract. Since the damages are not ...
|
| self employed healt insurance | 7/26/2008 |
Q: I am self employed and I pay for my insurance and my husband's insurance. I wanted to find out if i ...
A: Health insurance premiums are deducted on line 29 of form 1040, and not on schedule C. Yes, this ...
|
| Tax on Housing | 7/25/2008 |
Q: I have worked at a public university for 18 years as the Director of Facilities. As part of the ...
A: Sec 119 is applicable, why your employer is considering a portion to be included as compensation may ...
|
| Filing a tax return for an LLC | 7/25/2008 |
Q: We formed an LLC at the beginning of 2006 with 2 members. My 2006 return was filed by a CPA as a ...
A: An LLC is not a corporation, so it cannot be a S-Corp. The partnership form is the correct one. ...
|
| S- corp and legal fees | 7/25/2008 |
Q: I own an S- corporation. I sued on behalf of myself and the S-corporation to collect income that ...
A: The answer depends on if there was a valid sale. Your question seems to indicate that the court ...
|
| FLLC and The Primary Residence Exclusion | 7/24/2008 |
Q: I have came across a situation that I cant quite answer. If someone sells their primary residence ...
A: If the FLLC's members are only the husband and wife, the LLC is a disregarded entity, and the ...
|
| s corp income reported | 7/24/2008 |
Q: My ex- husband owns a snap-on tool franchise, listed as an S-corp. I've had difficulties proving the ...
A: If you have hard evidence to show the IRS indicating that his income is understated, you should ...
|
| beneficiary choice for an IRA | 7/24/2008 |
Q: who are also the only people named in my trust. I would like to avoid taxes and would prefer that ...
A: The IRA stays the same, just change the beneficiary to the Trust. The children are than the ...
|
| S-corp VS C- Corp | 7/24/2008 |
Q: I have few questions about the corporation selection. I am about to start a small business with a ...
A: An S-corp's earnings are distributed to the shareholders. Any distributions from the S-corp are tax ...
|
| Personal mileage on a company car | 7/24/2008 |
Q: I have a company provided vehicle. My company charges me $33.00 every two weeks plus the cost of gas ...
A: There is no definition of local for tax purposes. Any miles you drive after your commute from your ...
|
| deductibility of expense item for a s-corp | 7/23/2008 |
Q: Kirk, I am in the midst of preparing a Form 1120s for a single-member LLC. The LLC's owner was sued ...
A: Has the other business filed its final return? If not, amend the 1065 and show the equipment as a ...
|
| Tax on Housing | 7/23/2008 |
Q: I have worked at a public university for 18 years as the Director of Facilities. As part of the ...
A: Employer provided housing is considered compensation to you even though you are required to stay on ...
|
| CPA role | 7/21/2008 |
Q: Our CPA is very conservative, meaning that we are paying what we believe excessive taxes (35%) with ...
A: All CPAs charge by the hour worked on projects. The amount billed per hour is a matter of regional ...
|
| Transfer Inheritance Tax | 7/20/2008 |
Q: I am the executrix of my Mom's estate. I have filed the estate taxes with the State of NJ, and paid ...
A: Assuming that you and your siblings are the only beneficiaries of her estate, putting the title in ...
|
| Gifted house | 7/20/2008 |
Q: My mother gifted me a house in june 07. I want to know if I can sell this house and what penaties or ...
A: It depends on the basis of the property on how much tax will need to be paid. The basis is ...
|
| How to report to investors in an LLC | 7/17/2008 |
Q: I have a single-member LLC. If investors put money into it with the idea of earning interest income ...
A: It depends on how they are investing in the LLC, if not as members than they are loaning the LLC ...
|
| S-Corporation and 1099-C | 7/16/2008 |
Q: I have a small retail business with property under S-Corporation. I and my partner, each are 50% ...
A: The taxes cannot be avoided. The fact that the business is insolvent has no bearing in this case. ...
|
| Stimulus package rebate taxation | 7/14/2008 |
Q: Kirk, I recently served as executor for my mother's probate proceeding which was officially closed ...
A: The payment should be included in her estate and estate tax should have been paid on the proceeds. ...
|
| Travel deductions | 7/14/2008 |
Q: We purchased a condo and will be renting it for vacation rental all but 2 weeks of year. We ...
A: The three weeks you spent remodeling counts as personal use, even though you had no "play time". As ...
|
| Life Insurance Tax | 7/12/2008 |
Q: My single, childless sister died without a beneficiary on her life insurance. We live in Arizona, ...
A: It all depends on what her will says. If she died without one the laws of the state where she lived ...
|
| Selling personal primary residence to my corporation | 7/12/2008 |
Q: Three years ago I purchased a property for 440k and the current market value of the house is 400k ...
A: You cannot sell the house to the corp at anything above the fair value of the property on date of ...
|
| LLC for securites and investment management | 7/11/2008 |
Q: 1. I am wondering if there is an advantage of forming a single member LLC to manage personal ...
A: A single member LLC is a disregarded entity and all income is shown on schedule C, so no advance ...
|
| Mileage reimbursements | 6/26/2008 |
Q: Request your help on this question please - we have a few employees who are placed at the client ...
A: The engagement has to be temporary, any engagement that is "on going" is not temporary. The only ...
|
| Personal income in a partnership | 6/25/2008 |
Q: I'm about to start a partnership for an internet business, but I've already received income through ...
A: Give the placement service your partnership tax ID number when you receive it. All income you ...
|
| selling willed property | 6/23/2008 |
Q: We are selling a house that was left to my husband and his mother-approx. how much should we put ...
A: That really depends on how you compute the gain, and the size of the gain to calculate the tax. ...
|
| 3rd party designated charitable contributions | 6/23/2008 |
Q: I am the treasurer for a church. We are trying to improve our policies on designated contributions ...
A: Yes, provided that the donation would not violate the church's exempt purpose. For example, you ...
|
| Delivery Driver write offs | 6/23/2008 |
Q: I use a personal vehicle to deliver pizzas for Mazzios here in Oklahoma. I keep all fuel, ...
A: As an employee using your vehicle for deliveries you can deduct 50.5 cents per mile on all business ...
|
| FORM 982 | 6/22/2008 |
Q: Should I amend our taxes and file a FORM 982? I did not know about the Form 982 until after I filed ...
A: Depends on the reasons for the forgiveness of debt. If the fair value of the property is less than ...
|
| What expenses can I, a nanny, deduct? | 6/19/2008 |
Q: I am a married mother of two who will be caring for 2 additional children in THEIR home about 35 ...
A: You are considered a household employee. Any miles driven between your home and the place of ...
|
| income tax | 6/19/2008 |
Q: I am on relocation with my company. I am currently in the 25% tax bracket. However, after the ...
A: You can deduct your reasonable moving expenses from the income, which should not push you into a ...
|
| 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: 1. You pay income taxes to Colorado on income earned in that state. 2. If you are a single member ...
|
| Taxes on transfer of stock to family member | 6/18/2008 |
Q: My mother in law gave my husband some stock back in 1996, with the agreement that he would continue ...
A: Your husband can transfer the stock back to his mother with no tax consequences. A form 709 (Gift ...
|
| Freelance work and subcontractors | 6/17/2008 |
Q: I'm about to take a freelance job (in addition to my normal fulltime employee status) and as part of ...
A: If you receive more than $600 from the client, you should receive a 1099 from the client which ...
|
| past year tax | 6/17/2008 |
Q: I live in NY state. I didn't file my state and federal tax for year 2006 and 2007.My income is same ...
A: You are required to keep a record of fares and destinations, so you have the documentation to record ...
|
| LLC/capital gains | 6/17/2008 |
Q: I have recently started a holdings company. This company is an LLC in the state of Pennsylvania. I ...
A: It depends on how you set up the organization. Will the "Investors" have member rights? How do you ...
|
| FICA | 6/12/2008 |
Q: My husband and I own a c-corp. We have one other employee to whom we pay a salary and we pay ...
A: The only way for you to save paying FICA taxes is to pay dividends instead of salary to yourselves. ...
|
| Sole Proprietorship vs 1120 s | 6/11/2008 |
Q: I am in the process of starting my own consulting firm and am trying to analyze the tax implications ...
A: They are the same, the corporation pays half and you pay half of the FICA rate. The only real ...
|
| Personal Mileage | 6/10/2008 |
Q: Can you tell me if a privately held company is required by law (Federal/State) to pay a specific ...
A: There is no requirement that your company pay you anything for mileage. You can deduct 50.5 cents ...
|
| RMDs | 6/9/2008 |
Q: Must start `RMDs' from IRA in 2009 when I'm 70.5 (April 16, 2009) and wife 67. Table shows divide ...
A: Your minimum required payment is computed based on the date you make your first payment. You must ...
|
| How to file Trust taxes | 6/8/2008 |
Q: My father (80 yr) paid someone four years ago to create a family trust. He continued to file taxes ...
A: Sounds like he never funded the trust, so the trust actually has no income. It is too late to ...
|
| 1099 | 6/8/2008 |
Q: My father was a 1099 contractor with a large trucking company and had over 8 million dollers in ...
A: Depends on how the contracts are written. Any payments that are due on the contracts that were ...
|
| sale of family home | 6/8/2008 |
Q: My mother passed several years ago and this year my siblings and I sold the house and divided the ...
A: The family should determine the fair value of the property at date of death of your mother. Any ...
|
| W-4 Withholding Exemption | 6/5/2008 |
Q: I'm wondering if I can claim "Exempt" on my Form W-4. I will be making less than $900, so I pass the ...
A: No, it only applies to those that were entitled to a refund , such as the child tax credit, even ...
|
| S-corp: Draws vs Setting up payroll | 6/4/2008 |
Q: My fiancee and I are co-owners of a Chiropractic LLC with an S-corp election. I was wondering if it ...
A: You can take draws upto the amount of income produced from the LLC. Draws can be taken tax free ...
|
| who pays tax on sell of property? | 6/3/2008 |
Q: My sister bought my part of mother's property. Mother is still living. Sister is paying me my half ...
A: When your mother transferred the property to your sister and you, the basis of the property was ...
|
| Child dependancy | 6/2/2008 |
Q: I have a 5 year old daughter whose father I am no longer with. We were never married and went to ...
A: It depends on what is meant by "Split the taxes". Federal law always trumps state law, so the decree ...
|
| Per-Diem payment from Employer | 5/16/2008 |
Q: My name is Sam. I work for my client in California and my parent company is in New Jersey. The model ...
A: As long as the per diem rate are at or below the rate paid to federal employees, the payments are ...
|
| Loss on sale inherited partial rental property | 5/15/2008 |
Q: I have a client who inherited a 2 family house his father lived in & rented 2nd apt. After taking ...
A: It depends on whether the property was transferred out to the beneficiaries. If it is still in ...
|
| re: Value of loss carryforward? | 5/15/2008 |
Q: John - I have a corporation with a minus accumulated adjustments account of slightly more than ...
A: As i understand the question, I would say that the amount refers to losses incurred while the ...
|
| S corp sells a car to the owner | 5/14/2008 |
Q: I own an S corporation that bought an automobile 8.5 years ago (oct. 1999) The declared business use ...
A: You can sell the asset to yourself at fair value (Blue book), the sale would result in recapture of ...
|
| Texas Medicaid Recovery Lien | 5/14/2008 |
Q: I've inherited a home that has a Medicaid lien. Will the taxable profit be decreased by the debts ...
A: The estate should have cleared the lean before distributing the property to you. Now when you sell ...
|
| Reporting wages to different states | 5/14/2008 |
Q: I work for a multi-state employer and have employees who live in one state and work in another ...
A: All states have the right to tax earnings made within their borders, If you need a citation of the ...
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| Employee Benifits | 5/13/2008 |
Q: My wife and I both work a full time public job. We formed a Corp. a few years ago and file as a Sub ...
A: The deduction is shown on the tax return of the corporation, and the w2 from that corporation. As ...
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| Timber capital gains. | 5/12/2008 |
Q: Due to a recent tornado, it was necessary to cut some timber on an estate that was established in ...
A: An estate created in 1954 cannot be still open, the assets must have been transferred into an estate ...
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| Client wants to pay our salaried employees directly | 5/9/2008 |
Q: Our market research firm has 12 full-time salaried employees who receive W-2 forms every year. Our ...
A: Each individual would need a contract with the CPA firm, to bind the firm to the conditions of the ...
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| Property trust | 5/9/2008 |
Q: My mother died in Sept 07. He property transferred to me upon moment of death. I didnt want ...
A: How was the property transferred? What state is the property located in? Was a will in affect? Did ...
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| alternate minimum | 5/9/2008 |
Q: at what point would a single person's income not including capital gains income result in losing the ...
A: Yes if your income is high enough and you have significant tax preference items the AMT can kick in. ...
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| alternate minimum | 5/8/2008 |
Q: at what point would a single person's income not including capital gains income result in losing the ...
A: How much of a gain would you receive and what is the taxable income. Also is the property sec 1231. ...
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| Forfeiture of S-Corp stock and effect on K-1 | 5/6/2008 |
Q: In 2007, I was an active and equal shareholder in a Pa. S-Corp. I resigned as an officer effective ...
A: No, the s-corp should have done a split filing. One for the period you held the stock, and another ...
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| S-Corp | 5/6/2008 |
Q: I formed an LLC taxed as a S-corp at the end of last year. I used my personal funds to pay for ...
A: Treat it as paid in capital, by doing so you are taking losses on your personal return. After the ...
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| Partnership->C corp-2tax returns or not? | 5/6/2008 |
Q: 1.In 2006 general partnership (GP) and C corp were created. 2.In 2007 GP was incorporated into C ...
A: You have some complicated issues that should be handled by a tax advisor. Seek professional help as ...
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| IRS Regulations | 5/5/2008 |
Q: Are there any new regs or rules that changed the reimbursement of meals expenses? School district ...
A: TC Opinion 2004-117 applies a 35 mile rule for deductible travel expenses. But this opinion is not ...
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| rental property sale and recapture of depreciation | 5/2/2008 |
Q: If the annual allowed depreciation is not used b/c of AGI > 150K, how is this amount recaptured (or ...
A: The basis of the property is determined by decreasing the cost of the asset by all depreciation ...
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| dissolving an S Corporation | 5/2/2008 |
Q: We have owned an S corps for about 6 years now. It has no assets because the two remaining ...
A: Dissolving the corporation is pretty straight forward, but must be done through your Secretary of ...
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| Quick S Corp Tax Question | 5/1/2008 |
Q: I have had an s corp for the last 3 years with the primary business function being e-commerce (this ...
A: You can do those activities through your s-corp. Just make sure you can separate the activity from ...
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| capital gains tax on sale of house or land , life estate | 5/1/2008 |
Q: My grandfather left some farm land to me in his will, and left my dad a life estate to use the land ...
A: It depends on how your grandfather's estate handled the transfer of property. You will probably ...
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| Question: S-Corp owner draw vs payroll | 5/1/2008 |
Q: My husband and I have a California S Corp and have been on payroll taking reasonable compensation. ...
A: It really depends on how much taxable income you are generating from the S-corp. You are taxed on ...
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| Inheritance Tax question | 4/30/2008 |
Q: My husband's sister has past away and left him and his other sister her home. There are no other ...
A: Why is there a difference between the appraisal for the estate of $200,000 and the agent's $160,000, ...
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| Estate Tax... | 4/28/2008 |
Q: John, Good morning. My grandma is the last surviving spouse of my grandparents. She has an estate ...
A: I thing what you are referring to id the three-year rule. Under this rule certain gifts made within ...
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| Stock Sales Taxes/Loss | 4/24/2008 |
Q: I received a letter from the IRS saying I owe $450 for selling stocks in 2006. Obviously I wasn't ...
A: The IRS does not know how much you paid for the stock, so assumed you have zero basis in the stock ...
|
| s corp guidelines for spending | 4/24/2008 |
Q: Where can I find what can be and cant be spent out of s corp account? We are full time real estate ...
A: An extensive list of allowable and disallowed expenses is to numerous to state here. What you need ...
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| long term care reimbursements | 4/24/2008 |
Q: My question has to do with form 8853, page 2, reporting long term care benefits. The LTC 1099 we ...
A: If your reimbursement exceeds your actual expenses, the balance is taxable, to the extent of the ...
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| Sub Contractor Tax Laws | 4/23/2008 |
Q: I am an owner of a business. I had a person who I sub Contracted out that made @ 10,000.00 in 2007. ...
A: Send her a W-9 form requesting her ID number by registered mail, if you still are unable to get the ...
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| LLC | 4/23/2008 |
Q: LLC members cannot deduct medical expenses for book purposes or take a tax deduction. If the LLC ...
A: For tax purposes it is treated as a guaranteed payment, your original question dealt with how should ...
|
| Per Diem | 4/23/2008 |
Q: My brother is an independent truck driver in Maryland. His company pays him $40 a day for Travel/M&I ...
A: The $40 per diem is recorded as a travel expense in quickbooks. Set up a separate account under ...
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| S Corporation | 4/19/2008 |
Q: 1. My partner and I sold the S corporation business in April 1st 2008. There are total of 1,500 ...
A: No forms are needed, the transfer of the shares will be recognized on the form 1120-S filed. You ...
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| Housing allowance | 4/18/2008 |
Q: My husband works for a farmer that provides housing for some of his employees. When we negotiated ...
A: Are you an employee or a contractor? The difference will determine whether the payments are ...
|
| S-corp status | 4/17/2008 |
Q: When the State forfeits the charter of a corporation that have been granted S-corp status, how does ...
A: That is a legal matter that should be addressed by an attorney familiar with the corporation laws in ...
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| incorrect ammount in 2007 - 1099 M from a vendor | 4/16/2008 |
Q: I have recieved an 1099 from avendor wityh incorrect ammount. They showed $25000 more.What options I ...
A: If they do not respond, you will need to report the income as such, with a deduction for the ...
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| Form 4797- Change of Auto Question | 4/16/2008 |
Q: My wife is a realtor. In 2007 she got a new car, and I now drive her old car. There was no "sale" or ...
A: No, it is not correct. You do not have a disposition of the vehicle. I am not familiar with turbo ...
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| Trust/Grants/Tuition | 4/15/2008 |
Q: My college tuition is paid from a trust fund-not in my name. It's a trust set up as part of my ...
A: You should receive a form 1041 Sch K-1 from the fiduciary (the trustee) The payment of tuition for ...
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| Gift Tax | 4/15/2008 |
Q: I want to give my mom $12,000 in $1,000 increments per month. Does she have to pay tax on this? And ...
A: You can give her $12,000 per year, so $1,000 monthly amounts would qualify. The payments are not ...
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| estate tax on real estate | 4/15/2008 |
Q: My father passed away December 2007. His house was appraised at a FMV(fair market value)of $600,000 ...
A: You are required to use the fair value at date of death, or alternatively the value six months after ...
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| Credit Card Statement as evidence of Business Meal or Entertainment Expense | 4/15/2008 |
Q: I have one more for you at the last minute! I have a small home business for which I often take ...
A: The actual receipt is not necessary if you have who, what, where and why in the log which can be ...
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| S Corp - Shareholder Loans | 4/14/2008 |
Q: I pay certain bills out of my personal account, put it into a "Shareholder loan" (other current ...
A: When you record it as a shareholder loan on the books of the company, you should also be entering it ...
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| back tax responsibilities | 4/14/2008 |
Q: If my parents still owe taxes from previous years and they pass away...do I as their daughter become ...
A: The executor of the estate is responsible. All debts of the estate need to be settled prior to any ...
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| Schedule K-1 Forgiveness of Debt | 4/14/2008 |
Q: A real estate partnership disposed of the property. The disposition resulted in the K-1 (generated ...
A: I assume the partnership is a limited partnership, and that you are a limited partner. As such the ...
|
| Non-cash Charitable Donations over $500 | 4/14/2008 |
Q: I have several pictures of tons of clothes and other items my wife and I donated earlier this year. ...
A: All you need is an estimation of when the articles were acquired and their original cost. Also ...
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| Quitclaim before death | 4/12/2008 |
Q: My grandfather just recently passed away and left my mother and aunt equal share in his estate. ...
A: You will need to have an attorney review the matter. Usually any transfers made within 30 days of ...
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| Closing an S-Corp | 4/11/2008 |
Q: I am presently in the process of filing all the necessary forms to dissolve my S-Corp. The ...
A: No, you have to use the 2007 form. The IRS has not released the 2008 forms yet. What I do is mark ...
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| Character of Income | 4/11/2008 |
Q: I am trying to complete a K-1 for a complex trust and am understanding that I need to distribute the ...
A: Without reading the trust agreement, we cannot say for certain, but most likely it refers to capital ...
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| refund deadline | 4/11/2008 |
Q: Spouse A has not filed a federal tax return for 2004. Spouse B has filed a married-separate return ...
A: A and B can file amended returns for 2004 by 4/15/08. They change there status on the return. ...
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| Property tax on willed home. | 4/10/2008 |
Q: My mother had a will and trust. My sister is the executor and the house has been transferred to her ...
A: Property taxes are assessed on the value of the house. In the filing of the estate, the value of ...
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| Sale of Residence/1041 | 4/9/2008 |
Q: Exactly where do I report a sale of residence on a 1041. I have a 1099-S (gross proceeds is ...
A: It depends on the estate, and how distributions are made to the beneficiaries. If an estate trust ...
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| S-Corp supplemental business expenses | 4/9/2008 |
Q: I am a shareholder of an S-Corp in which I incur expenses which are un-reimbursed...primarily travel ...
A: Shareholder expenses that are ordinary and necessary are deductible on schedule E line 28. Interest ...
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| U.S. Treasury STRIPS | 4/9/2008 |
Q: I just have a quick question regarding the taxation of U.S. Treasury STRIPS. I read in an article ...
A: They are one and the same, If you purchased the Strip at issuance, the price was determined based ...
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| Haven't recieved k1 | 4/8/2008 |
Q: I was a 50% shareholder of a S-corp and my accountant won't release my k1 until my ex-partner and I ...
A: I see no reason for the accountant to withhold your K-1 from you. You have to report the information ...
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| corp investment startup loss | 4/8/2008 |
Q: I established a new corporation and had an attorney write P&S agreement on commercial real estate to ...
A: Did you elect S-corp status on the corporation? If so the expenses are considered start-up cost (Up ...
|
| church use of my house | 4/6/2008 |
Q: I currently live in Macon, GA and will be moving back home to Chicago in one month. My home is near ...
A: Since you are paying the mortgage on the property, you are giving the church an undivided interest ...
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| w2 question | 4/4/2008 |
Q: The amount in box 1 of a w2 is higher than box 3 and 5. I've seen box 1 amounts be lower than boxes ...
A: There are a couple of situations in which the income subject to withholding is lower that FICA Wages ...
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| LLC payment to owners | 4/4/2008 |
Q: My friend and I are starting an Internet-based LLC where users will pay a subscription to use our ...
A: Not entirely, the LLC is treated as a partnership in that the partners pay taxes on the net profits ...
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| S-corp. un-proportionate distributions | 4/4/2008 |
Q: We have 4 partners in an S-corp. 40/40/10/10 %. Lets say we netted 600k and 1 partner looted 400k of ...
A: The shareholder that "looted" the company has liquidated his interest in the S-Corp. The S-corp ...
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| sub s corp | 4/3/2008 |
Q: i sustained a large loss in my sub s corp (wholesale clothier )Im the owner 50% my wife and we made ...
A: The losses will offset the gains on the sale of the real estate, but only for income tax purposes, ...
|
| NJ LLC members moved | 4/2/2008 |
Q: I created an LLC in New Jersey in 2004. The LLC has 2 members . I was living in NJ until last year ...
A: You need to file form 1065 with the feds, even though you have no revenue. As far as income ...
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| S-corp tax status | 4/1/2008 |
Q: I work for a construction company with approximately $9 million in annual sales, and approximately ...
A: As you continue to evolve into manufacturing (where inventories are a significant factor in ...
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| interest on loans to stockholder sub s corp | 4/1/2008 |
Q: I am a 100% owner of a sub s corporation. Do I have to pay interest on loans from the s corp to me? ...
A: For it to look and smell like a loan, it has to pay interest. Other wise you run the risk of the ...
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| Capital Gain Taxes on property sold | 4/1/2008 |
Q: My father sold two tracts of land in 2007. He was 84 years old. He was living on social security. ...
A: The capital gains tax applies and should be reported on the deceased final form 1040. Yes it is ...
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| Dual business tax | 3/28/2008 |
Q: My husband and I are forming an LLC. The question is: We live in Illinois with plans to relocate ...
A: Since you are an IL, you have reporting responsibilities there, and would have to register as a ...
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| S-Corp Officer Compenstation | 3/27/2008 |
Q: Mr. John Kirk, I am looking in to starting an S-Corp this year and doing research to understand how ...
A: Most corporations like google are subject to continuous audit, so that is not an issue. Officer ...
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| Regarding 1099-MISC | 3/27/2008 |
Q: I started my IT business at home in 2007 as a Sole Proprietorship. Last year, I worked with a couple ...
A: -misc to any person you paid over $600 during 2007. These forms should have been sent by 01/31/08, ...
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| Write-off with a Partnership | 3/26/2008 |
Q: I am in a general partnership with another individual and when doing my personal K-1 I was wondering ...
A: 1. The first line should match the amount reported to you on schedule K-1 from the partnership. The ...
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| Income Taxes - Longd Ter Capital Gains | 3/26/2008 |
Q: Corporation went private. Victim of windfall profit, by no reason of my own. Held stock purchased ...
A: If you have been cashed out of the stock, nothing can be done. If you haven't received the cash, ...
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| S-Corp Officer Compenstation | 3/24/2008 |
Q: Mr. John Kirk, I am looking in to starting an S-Corp this year and doing research to understand how ...
A: 1. You can do a journal entry to record the zero based paycheck, just remember to pay the payroll ...
|
| Question on business start up costs. | 3/20/2008 |
Q: I have spend time over last 5 years to create a software program and web site to provide stock ...
A: You can deduct up to $5,000 in start up costs paid during 2007. The new laptop can be deducted in ...
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| partnership becomes S-corp/effect on individual | 3/17/2008 |
Q: Partnership files a 1065 return. 12/31/07 last day of business for partnership. Then the S-corp ...
A: It depends on how the asset transfer was affected. If the assets and liabilities are exchanged for ...
|
| Inheritance of money/K-1 form? | 3/16/2008 |
Q: My grandmother passed away and we have sold her home and I was told for my portion of the ...
A: As a beneficiary of her estate you are receiving the K-1 to allocate the estates income to the ...
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| investment property | 3/15/2008 |
Q: john, If I have a piece of land that I am holding on to as an investment, planning on selling ...
A: The interest is considered an investment expense and deductible against investment income. Any ...
|
| Inherited Home | 3/15/2008 |
Q: My mother-in-law passed away last June and left her home to my husband and his brother, with the ...
A: Was the house your mother-in-law's separate property? Is the house in a community property state? ...
|
| partnership becomes S-corp/effect on individual | 3/14/2008 |
Q: Partnership files a 1065 return. 12/31/07 last day of business for partnership. Then the S-corp ...
A: For this to be a tax free transaction, the assets and liabilities need to be transferred to the ...
|
| s-corp/ COGS and inventory assests | 3/14/2008 |
Q: This is our first year as an s-corp with 3 partners. One partner paid $40,000 for inventory. Do we ...
A: Are you saying that the partner took $40,000 worth of inventory, or that he contributed $40k of ...
|
| 1099-A | 3/14/2008 |
Q: If the FMV (Box 4) is less than the Balance of Outstanding Principle (Box 2), do I need to report on ...
A: The balance of the debt forgiven in excess of the FMV of the property is taxable to you. However, ...
|
| Single Member LLC | 3/12/2008 |
Q: A single-member LLC (SMLLC) is one of the members (or partner from tax standpoint) of a multi-member ...
A: Since the SMLLC is receiving a K-1 from the MMLLC, the SMLLC should report the income on page 2 of ...
|
| Using a smaller home office | 3/12/2008 |
Q: I am a freelancer. I used the master bedroom as my office for several years, and now I am using a ...
A: Changing the area of business use will also change the ratio of common expenses to be deducted. The ...
|
| 529 savings plan | 3/12/2008 |
Q: Well John, I'm a little confused to say the least. I won a national contest and was given a 529 ...
A: The $5,000 is included in your income because it was a taxable prise award and considered income to ...
|
| Depreciation ?? | 3/12/2008 |
Q: I have been living in my home for 10 years now. I built it using personal sweat equity throughout ...
A: Sorry, but depreciation is calculated on the cost to build the house, and does not include the ...
|
| 1041 capital gain tax | 3/11/2008 |
Q: I've asked this before but I keep getting conflicting answers so please explain in full. On the 1041 ...
A: 1. The tax was returned because the rule regarding the calculation of Distributable Net Income was ...
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| intrest income on 1040 & 1041 | 3/11/2008 |
Q: I have a question regarding a complex trust. There are to be no scheduled distributions for many ...
A: It depends on the trust agreement. Are you preparing the 1041 as well? If not and the same ...
|
| Schedule K-1 to the 1040 | 3/11/2008 |
Q: I am a passive, limited partner for a LLC. I have a schedule K-1 that was given to me. I don't ...
A: Line 19 - Code A shows the amount of any partnership distributions you received, This is for your ...
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| S-Corp losses suspended on 6198 -- how are they taken when stock is sold/disposed? | 3/10/2008 |
Q: (I'm asking this question because I agreed to assist a former shareholder of my S-Corp with their ...
A: Sorry, but I didn't read your question as completely as I should have. The answer I gave was ...
|
| oid on zero coupon treasuries | 3/9/2008 |
Q: In order to figure how much tax I owe on zero coupon treasuries bought on the secondary market, I ...
A: If you had OID for the year but did not receive a Form 1099-OID, see the OID tables found at ...
|
| Depreciation Reserve | 3/8/2008 |
Q: Is a reserve required for a trust to put depreciation into?
A: It depends on the trust agreement, some trusts require that a replacement fund be created to fund ...
|
| Loan In the form of Kind | 3/7/2008 |
Q: In a LLC, can you treat a member's contribution, in the form of kind as a loan rather than capital ...
A: The member has to have a capital account, so he has to have contributed capital. Any additional ...
|
| S-Corp taxes | 3/7/2008 |
Q: why is there ss and medicare taxes taken out on a s-corp? ANSWER: Only if you paid salaries John ...
A: There is only a double tax if she pays herself a dividend. The amount of taxes she pays are the ...
|
| Best business entity structure for rental business | 3/7/2008 |
Q: I am planning to buy a residential rental property for about $150K. I am expecting a revenue of ...
A: The tax breaks are the same for all forms of entity organization. Most rental properties are placed ...
|
| Partnership, Craft Fairs, Tax ID #s | 3/4/2008 |
Q: My friends and I have formed a partnership. We create crafts and want to sell at craft fairs. We ...
A: Without a formal partnership agreement, you are operating as a club, and do not need to file as a ...
|
| land sale in Corporation C | 3/3/2008 |
Q: I am a co-executor of my deceased father's estate. His 130 acres of farm land is in a Corporation ...
A: The amount of tax you would pay on the gain depends on the basis of the property We cannot give you ...
|
| How to handle transfer of partnership in an LLC | 3/2/2008 |
Q: I sold my LLC this year. It was not a partnership or anything like that, just a single owner LLC. ...
A: You question involves a complex answer, it would be best if you contacted a tax professional in your ...
|
| Self-employed health insurance deduction - what to include? | 3/1/2008 |
Q: I have two questions regarding the self-employed health insurance deduction on line 29 of my 2007 ...
A: All of the premium is deducted on line 29. If you are covered by you or your spouse' employer's ...
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| Self-employed health insurance deduction - what to include? | 2/29/2008 |
Q: I have two questions regarding the self-employed health insurance deduction on line 29 of my 2007 ...
A: 1. 1/2 of the premium is deducted on schedule C, the other half is deducted on line 29. the amount ...
|
| UTMA by Grandparent and Tax reporting | 2/29/2008 |
Q: My daughter's grandfather opened a UTMA account with him as custodian and my daughter (who is 5 ...
A: The grand parent is paying the taxes as the grantor of the trust. As the grantor of the trust, the ...
|
| Residency Pickle | 2/27/2008 |
Q: I'm hoping you can shed some light on my situation, as I don't have access to a qualified tax ...
A: If you have lived more than 6 months in Korea, than you are a non-resident in the other states and ...
|
| Cost of Goods Sold- Schedule C | 2/26/2008 |
Q: I have been in business for a few years, but always only doing services (graphic design and ...
A: No, they are considered sold in the year purchased. Which means that if you have items left over ...
|
| Dissolved S-Corp Final Return | 2/23/2008 |
Q: Q1.- From page 3 of the Instructions for Form 1120S: "A corporation that has dissolved must ...
A: 1. You are late filing if you did not file an extension. When were your dissolution resolutions ...
|
| Real Estate Partnership/ Depreciation | 2/22/2008 |
Q: I have a two-fold question. My first question is this: I have a rental property I have owned since ...
A: The depreciation should have been taken all along, and when the property is sold or disposed of, ...
|
| 1st time preparing taxes for Michigan LLC. | 2/22/2008 |
Q: I'm completely lost as to where to start. I incorporated in Jan. 07, I opened the office in the last ...
A: The corporate bylaws will determine the fiscal period that the corporation operates under. You can ...
|
| Cash received in stock mergers | 2/22/2008 |
Q: I received stock and cash resulting from a merger. Since all of the cash is taxable, do I report ...
A: You have to allocate the share and basis between the stock that was cashed out and the stock that ...
|
| Real estate rental by a Trust | 2/21/2008 |
Q: I have been the co-trustee of my deceased mother's trust for a little over two years. In 2007, the ...
A: Since the trust was a revocable trust it ended on the death of your mother and goes to her estate. ...
|
| Asset Allocation and Earn Out | 2/19/2008 |
Q: We recently have had a client sell all the assets of the busines for $25mm. A portion of the sales ...
A: It all depends on how you allocate the selling price of the assets. Clearly any additional ...
|
| Partner in Investment Club left Sept 31, 2007 | 2/18/2008 |
Q: .. One of the partners in our investment club ended her partnership as of Sept 31, 2007. She was ...
A: You have to do a special allocation of the income to proportion the income correctly. The ...
|
| 1041 Capital gain tax | 2/18/2008 |
Q: On my 2006 1041 the trust claimed 3777.00 long term capital gain, making taxable income (1051 line ...
A: Capital gains in your case are added to the corpus of the trust, and not taxed to the trust. If you ...
|
| state tax | 2/16/2008 |
Q: i live in nj and work in NY, i work for a consulting firm which is based out of florida, they dont ...
A: This seems to be a common problem with consulting firms. Technically you're suppose to report ...
|
| K1 when S corp has business loss | 2/14/2008 |
Q: I am a PDTS in a S corp, 100% holder(small-part-time Painting Contractor, little work, just keeping ...
A: You need to file form 1120-S with the K-1 to the IRS, the fact that you have no sales is not a ...
|
| partnership dissolution | 2/11/2008 |
Q: We are trying to disolve a four party partnership; 20%, 20%, 30% 30%. The partnership includes two ...
A: it depends on the plan of dissolution that was approved by the partnership. You should be ...
|
| Depriciating an SUV for business | 2/11/2008 |
Q: I started a watercraft rental business in 08/2007. I will not begin renting to customers until ...
A: You only can take the sec 179 deduction once on the SUV, the balance has to be depreciated over 5 ...
|
| owed taxes | 2/10/2008 |
Q: Its just not fair because we just got married and they would withhold my money when i need it for my ...
A: If your husband is on an IRS approved payment plan he should be paying estimated taxes into the ...
|
| Closing out a small C corp | 2/10/2008 |
Q: To distribute depreciable assets to the shareholder (me) I credit asset, debit accum depreciation. ...
A: Assume that you distribute an asset with a book value of $1000, a basis of $500 and a fair market ...
|
| tax question on forfeited downpayment | 2/10/2008 |
Q: I am a buyer for a property in florida. I put $5000 as downpayment and would like to get out of this ...
A: You have a non business bad debt to the extent that the property was for personal purposes. The ...
|
| 1099 from Estate Sale | 2/8/2008 |
Q: My father passed away in September 06 leaving to my sister and I his home in WV. My sister and I ...
A: Have the 1099 corrected to the estate. As the proceeds were required to be deposited into the ...
|
| 1099-DIV Liquidation cost basis | 2/8/2008 |
Q: John, First, thanks for your participation on this site! My credit union sold out to a bank, ...
A: I am confused as well. Did you only receive 16% of the funds you had at the credit union? That ...
|
| 1099-A after bankruptcy | 2/7/2008 |
Q: My husband and I filed bankruptcy in Sept 2007 and discharged Dec 2007. We received a 1099-A for ...
A: Since the bank foreclosed on the house prior to your bankruptcy, the forgiveness of debt is taxable ...
|
| student with a p/t job | 2/5/2008 |
Q: My daughter was a full time student and worked p/t for part of 2007. As her mother I can claim her ...
A: It all depends on whether you provided over half of her support. She will have to file her own ...
|
| 706 Estate Tax | 2/3/2008 |
Q: 1. I am an executor for an estate which has a gross valuation (pre deductions) of 2,005,XXX.00. With ...
A: Specific bequests, jointly held property, surviving spousal deduction (if Applicable) and ...
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| business tax structure | 2/2/2008 |
Q: I was wondering what legal tax structure would be best for my future plans. My wife is a Realtor, I ...
A: The best advice is to obtain a real estate license so you do not have to be tied to the passive loss ...
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| Kindergarten expenses | 2/2/2008 |
Q: I was wondering how this works: My daughter goes to public school for free for AM Kindergarten- we ...
A: It counts as day care expenses, However the amount of credit available (Form 2441) is limited to ...
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| S Corp Distributions | 1/31/2008 |
Q: I have a S Corp client that has to shareholders. One of the Shareholders paid some personal bills ...
A: These are distributions and the other shareholder should receive a like amount distributed to him, ...
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| Gift and Estate Taxes | 1/30/2008 |
Q: Can you elect to use the stepped up basis for a gift of property or do you have to use the carryover ...
A: The gift tax is based on the fair market value of the property given as a gift. In this case the ...
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| Student dependent | 1/30/2008 |
Q: I graduated from college on June 10, 2007 and received finicial aid for the school year (and the ...
A: In this case the personal exemption goes to the person who provided over half of your support. What ...
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| Tax filing | 1/30/2008 |
Q: I work as a software consultant for a company based on New Jersey. Me and my wife rent an apartment ...
A: You will need to file a New Jersey non resident income tax return and claim a credit for taxes paid ...
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| 1099-A | 1/29/2008 |
Q: I filed for bankruptcy and received a discharge in 2006. I originally reaffirmed my mortgage, but ...
A: You have a gain, not a loss of $12,000. The debt you were relived of is considered income to you ...
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| tax of non-compete agreement on taxes after sale of s-corp | 1/29/2008 |
Q: I am closing on the sale of my business soon and have to sign a 5 year non-compete agreement. The ...
A: You sold the assets to the business, which is a capital gain. As you are receiving consideration in ...
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| Loss on inherited home | 1/28/2008 |
Q: My husband inherited is mother's home - Basis on date of death was $245,000. Between the time she ...
A: Unfortunately, losses on personal property are not deductible. Had you rented out the property it ...
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| Is Marital Home Equity Payout Taxable? | 1/28/2008 |
Q: Kirk: I've been given the Marching Orders by my darling fiance to ask you a complicated question ...
A: Transfers between ex-spouses are non taxable to the extent that they are incident to a divorce ...
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| Large Income for one year only | 1/25/2008 |
Q: My AGI is approximately $350,000 for 2007 due to bonuses from my old company and new company and ...
A: No, unfortunately the federal government does not allow for income averaging, so you face higher ...
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| Quarterly estimated tax payments | 1/24/2008 |
Q: I am an independent contractor. I would like to avoid paying taxes quarterly and pay them only once ...
A: It depends on if you want to pay a penalty for not making estimated payments. If you make ...
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| Payroll Withholding | 1/24/2008 |
Q: My company currently has employee's that work as paramedics on rigs located in the Gulf of Mexico, ...
A: Most states tax their residents on total income received no matter where the income is earned and ...
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| Capital Gain Tax | 1/23/2008 |
Q: My wife and I bought a "fixer upper" house. We sold our primary residence and are currently living ...
A: If you sell the house in April 2008 you will have a short term capital gain of 35,000, which would ...
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| Deductability of Interest on Revolving Line of Credit Note | 1/20/2008 |
Q: I am a farmer who has a $1,000,000 revolving line of credit secured with chattel assets. (cattle, ...
A: The interest is deductible when you pay off the line of credit for the interest payment. So if you ...
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| dependents | 1/20/2008 |
Q: i have been divorce for 12 yrs my ex husband and wife have reported me to the IRS because they said ...
A: The dependency exemption goes to the parent that has custody of the children for over half of the ...
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| Business miles deductions | 1/19/2008 |
Q: I work for a labor union as a staff representative. My business office is about 40 miles in the ...
A: I would deduct them, as it makes more sense to travel direct to the units than going first to your ...
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| Small Business Deduction for Vehicles | 1/19/2008 |
Q: I'm wondering which way I should go on a vehicle purchase for a small business in order to get the ...
A: The vehicle needs to be over 50% business use in order to take any deductions for its use. This ...
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| Non-business bad debt deduction | 1/18/2008 |
Q: This is a about a personal debt secured by a promissory note (not between relatives) that went into ...
A: The legal expenses may be deductible if they relate to investment property. In this case, you ...
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| What if my employer stopped paying payroll tax in Sept. 2007? | 1/18/2008 |
Q: I'm very concerned that my employer may not have been keeping up with paying the appropriate payroll ...
A: This is a common concern that employees have when business turns bad for the company. However the ...
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| Corporate Tax Question | 1/17/2008 |
Q: John, The CEO at my company is leaving for a 3 year religious sabbatical. In his stead, the CFO ...
A: The payments would be deductible to the Company as additional compensation to the CFO. The CFO ...
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| Tax filing | 1/17/2008 |
Q: John Kirk thank you for your time, Question... My wife was asked to do a cleaning job for a ...
A: Since you are considered a cash basis taxpayer, you only report the $150 she received in 2007. She ...
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| Rental Property | 1/17/2008 |
Q: Hey John. My question is about loss of rental income. I just started renting my house and due to ...
A: No, principal payments are not deductible. But remember that depreciation of the property may ...
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| Truck Driver Deductions | 1/16/2008 |
Q: I am wondering how to do a truck drivers taxes. This is his first year driving truck and has ...
A: On form 2106. If items are capitalized show the depreciation on the 2106 under line 4 of form 2106. ...
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| Company Vehicle Personal Use | 1/16/2008 |
Q: I am not sure you can assist me but here is my question anyways. This year I left my place of ...
A: Your employer needs to put the value of the auto used for personal use as additional compensation. ...
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| How file returns 1040/1040 for deceased parent. Use EIN#?? | 1/15/2008 |
Q: We had a tax attorney and CPA who worked together but he has not been helpful since my mother died ...
A: You file the 1040 for the year 2007, but in the space before the name section, put the following: ...
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| Kentucky and Missouri Tax Dillema | 1/15/2008 |
Q: This is a really long story...but hopefully you can help! I live in Missouri normally, but have ...
A: You must first determine where is your Tax Home. For state income tax purposes your tax home is ...
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| Mother in law as deduction? | 1/14/2008 |
Q: I hope you can help me. I am married to a Filipina since April 2007, I send about $1500 a month to ...
A: No deduction or exemption is allowed for the support of the mother-in-law. In order for you to ...
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| Franchise Start-Up | 1/13/2008 |
Q: Is the cost of buying into a franchise deductible, if so what line of a schedule C would be used?
A: Start-up cost are deductible up to $5,000, the remainder needs to be amortized over a period of 180 ...
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| Inherited Debt | 1/13/2008 |
Q: When my step mother passed we inherited a house that my father built and left to us, yet the step ...
A: You really have a complex question. Since your step-mother had title to the property until her ...
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| LLC taxation | 1/12/2008 |
Q: If the net income of an LLC is not collected by its members is it again taxed with individual tax ...
A: The answer depends on if the LLC is treated as a partnership or corporation. This determination was ...
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| 1099 / Reimbursed Expenses | 1/11/2008 |
Q: I am a consultant to a foreign company on an exclusive manner. They pay me by wire transfers and I ...
A: You should report the payments on form 1040, Schedule C, any expenses incurred should also be ...
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| Amount a child can receive without paying taxes | 1/10/2008 |
Q: My son is 10. He races motorcycles and this year is soliciting for significant (over $10,000) ...
A: The standard deduction amount for 2008 has not been determined yet, so we cannot answer your ...
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| Contract Labor and paying taxes | 1/8/2008 |
Q: Good afternoon, here's my situation. I'm working for a company part-time in addition to my full-time ...
A: As a contract laborer, your tax home is your residence. Mileage should be taken from residence to ...
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| Married filing jointly / injured spouse | 1/8/2008 |
Q: my husband and I are going to file our taxes jointly this year, and I adopted his two teenagers this ...
A: I think what you mean is the "innocent spouse relief" filed under form 8857. You should seek help ...
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| 2007 W2 form | 1/5/2008 |
Q: I live in NYC but I work in NJ and my GROSS PAY for the year was $60350. The state wages for NY on ...
A: Sorry, but I am not familiar with the tax agreements between NYC and NJ. Most states report wages ...
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| Paying taxes on earnings (1099) prior to forming "s" corporation | 1/4/2008 |
Q: I am an independent medical device rep working as a Regional Manager for Texas for a company based ...
A: The earnings or losses incurred prior to the formation of the corporation should be treated as a ...
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| Real Estate Tax Question | 1/4/2008 |
Q: My dad bought a house in Massachusetts in 1971. Mom passed away in 1987 and dad placed the house in ...
A: It depends on the trust agreement, If the family trust was unfunded, and you are not the ...
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| Conversion from C to S-Corp Losses | 1/2/2008 |
Q: I own interest in an entity that that didn't file in time to get S-Corp status that initial year, ...
A: The loss from the previous year is considered accumulated earnings and profits, which stay with the ...
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| LLC and Sub Scorp | 1/2/2008 |
Q: I am looking at starting a new business. It was suggested to me to organize as an LLC because of ...
A: As a single member LLC, you are taxed as a sole proprietor. An S-Corp you can take distributions ...
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| Tax Withholding | 1/2/2008 |
Q: I am joining a friend's small business. He is an artisan entrepreneur who is good at his work, but ...
A: If there is no written agreement between the worker and the artist establishing a contractor status, ...
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| Corporate Tax planning - tax shelters | 12/30/2007 |
Q: We are currently an s-corp in Oregon. up until know we haven't turned much of a net profit on our ...
A: As an S-corp your income is allocated to the various states in which you do business, so it doesn't ...
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| Start Up Expenses | 12/28/2007 |
Q: I am in the process of launching a footwear company in Massachusetts. I have accrued roughly ...
A: It doesn't matter when the expenses are incurred. The $5,000 limit begins in the year the business ...
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| Start Up Expenses | 12/28/2007 |
Q: I am in the process of launching a footwear company in Massachusetts. I have accrued roughly ...
A: In the year you begin operations, you may deduct $5,000 of the start up cost and the balance must ...
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| Selling/Transferring Assets in a Trust? | 12/27/2007 |
Q: My family (5 adult children) owns assets (cropland in Indiana) in a trust. Some of us are ...
A: The sale of an undivided interest in a trust is treated the same way as the sale of any capital ...
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| Creating an LLC - Rental Property | 12/26/2007 |
Q: Kirk and thank you for taking the time to look over my question. I bought a home in my name 18 ...
A: Real estate ventures use the LLC format to limit their liability, The steps needed should include ...
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| how can poperty be tax defered | 12/26/2007 |
Q: I have a house that I want to donate to my church for a church project, for the homeless how can I ...
A: you will receive a tax deduction equal to the fair value of the house, less any debt that the church ...
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| 1031 Exchange | 12/12/2007 |
Q: Mr. Kirk, I am a loan officer and one of my clients is using funds from a 1031 Exchange in order to ...
A: The rules for a sec 1033 exchange are very specific in that the property maintain the status in ...
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| LLC's | 12/12/2007 |
Q: The respective owners of two single member LLC's want to jointly own and manage real estate rental ...
A: It is probably better that the partnership be only for the joint ventures that the two do together ...
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| Taxes on property condemned by eminent domain. | 12/11/2007 |
Q: I am a member of a HOA - non-profit corporation. The state acquired a small portion of our common ...
A: The portion of the land acquired by the state is considered the sale of a capital asset, and as such ...
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| S Corp Excess Cash at YE | 12/10/2007 |
Q: If a S Corp has excess cash at YE are the owners taxed on that in addition to the income? My S Corp ...
A: A shareholder of an S-Corp is taxed only on the net income generated by the corporation not on the ...
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| sub -s taxes | 12/10/2007 |
Q: If a sub s corp invests in a partnership with current income on the corp books, and there are ...
A: If the investment in the partnership is a passive activity the losses are a tax benefit to the ...
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| Partnership salary | 12/8/2007 |
Q: my son is a LLC he has been filing as a partnership and drawing a salary as he not only runs the ...
A: If the other member had a percentage in the profits, your son is correct in filing as a partnership. ...
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| Transfer of Deed from Mother to four children | 12/6/2007 |
Q: My mother is 82 years old with a home she desires to transfer to her children prior to her death. ...
A: I think the best solution is to have the house put into a life estate, that way you avoid any gift ...
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| Question regarding service giveaways | 12/6/2007 |
Q: I have a service-based business and provide giveaways of my service on occasion as an advertisement ...
A: There isn't any tax deduction for giveaways of services, as you would have to include the fair value ...
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| Is it a dividend or distribution or neither? | 12/6/2007 |
Q: We are an SCorp. Our net 2007 income will be around $50K and we don't want to pass that on to ...
A: An S-corps taxable income is allocated to the shareholders who pay tax on the allocated share. The ...
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| Stock/Entity Questions | 11/9/2007 |
Q: I saw your About.com website and thought I would post a question. I appreciate any help you can ...
A: Yes, take advantage of the individual capital gains as described in my previous answer. There are ...
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| Home Office deduction S-corp owner | 11/9/2007 |
Q: When the owner of an S-corp runs the business our of their home and wants to take the home office ...
A: The only way that you can take those expenses is as an employee on form 2106. You also would need ...
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| inheritance | 11/8/2007 |
Q: He passed away in 2000, and my aunt(executrix) has been living in his home since then. I had not ...
A: Yes the gain is calculated correctly and distributed from the estate as you. The estate should have ...
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| S Corp Election | 11/7/2007 |
Q: Can a corporation which is 80 owned by a corporation make an S election for the fiscal year ending ...
A: Yes the corporation can make the election to be taxed as an S-Corp, if the total number of ...
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| Filing Exempt on W-4 | 11/7/2007 |
Q: I believe I understand the concept of filing EXEMPT on the W-4 forms, however want to know what ...
A: If you knowingly file a false W-4 claiming exemption when you anticipate that you will in fact have ...
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| Stock/Entity Questions | 11/6/2007 |
Q: I saw your About.com website and thought I would post a question. I appreciate any help you can ...
A: If you put the stock into a C-Corp any gain will be taxed at 35% for Federal income taxes and 5% for ...
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| TAX | 11/6/2007 |
Q: I had my taxes prepared by H&R Block last year. How can I look at my tax papers and find out what % ...
A: Using the taxable income number from your form 1040, find the applicable bracket on Tax Rate ...
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| Forms for independant contractors | 11/5/2007 |
Q: I am using workers to install Holiday lights They will be 1099 They will work their own hours and ...
A: The workers need to have a business license and there must be a contract specifying the the duties ...
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| 1099 tax form | 11/4/2007 |
Q: I am currently employed and use the W2, but I want to switch to another company to be a loan ...
A: Compare the gross amount you are receiving from the W2 job with the amount you will be receiving ...
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| Gift & Inheritance Tax | 11/4/2007 |
Q: Confused as to the difference between the two? We are Gifted our children stock in our business at ...
A: The Gift tax and estate tax were unified some years ago. Currently you have a estate tax credit of ...
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| 1099 tax form | 11/4/2007 |
Q: I am currently employed and use the W2, but I want to switch to another company to be a loan ...
A: You really don't have an option, you are either an independent contractor or an employee, you don't ...
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| Rental Property Business | 11/2/2007 |
Q: My husband and I own Three pieces of rental property of which we have actively participate in the ...
A: Unfortunately there is no way to by bypass the passive activity losses. All other forms of business ...
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| HOE as down payment | 11/2/2007 |
Q: We are LLC elected to be taxed as corporation. We use our own home equity loan as down payment for ...
A: The corporation can pay you interest if the amount used by the corporation is handled the right way. ...
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| Close corporation - Illinois | 11/2/2007 |
Q: My husband and I want to set up a corporation to invest in small real estate properties. Should we ...
A |
