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About John Stancil, CPA
(Top Expert on this page)

Expertise
I can answer questions on personal income taxes, partnerships, and some corporate income taxes. I can deal with some state tax questions. Limited gift and estate tax questions. I am also familiar with ministerial and church tax reporting issues. I teach tax and accounting at a small church-related college. Sales taxes and property taxes are state and local issues so I am not likely be be able to give you an in depth answer on those types of taxes. I have maintained a part time tax practice for over 30 years. I am a member of the AICPA, National Association of Tax Professionals, and the Institute of Management Accountants. Visit my website at www.johnstancilcpa.com. Also visit my blog, www.thetaxdocspot.com.

Experience
I hold a doctorate in Accounting, and four professional certifications: CPA, CMA, CFM, and CIA. I passed all certification examinations on the first attempt, and received honorable mention for my scores on the CIA exam. I write a monthly tax column for the local newspaper. I have prepared taxes for over 30 years.

Education/Credentials
DBA University of Memphis MBA University of Georgia BS in Accounting Mars Hill College

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

Questions Answered By Expert John Stancil, CPA
In Category Tax Law (Questions About Taxes)

Subject	Date Asked

gift taxes	11/20/2009
Q: If one were 85 and contemplating giving an early inheritance of 500,000 to a child in his or her ... A: Bob, Thanks for your question. Just give it and file a gift tax return. Unless it has previously ...
Federal Tax on Federal CSRS pension living abroad	11/19/2009
Q: My only source of income is a federal Civil Service Retirement System (CSRS) pension. If I move to ... A: Ray, Thanks for your question. As a U. S. citizen you are subject to tax on your worldwide income, ...
Perdiem tax	11/19/2009
Q: Is there a rule to taxing perdiem or wages, if I stay and work in Texas over a year? What is the ... A: Mark, Thanks for your question. If the assignment is for an indefinite period, or is expected to ...
step-up basis after spouse dies	11/19/2009
Q: do you need an appraisal to get the correct value of farm and house or will the property tax papers ... A: Marilyn, Thanks for your question. You don't want to use property tax papers as those frequently ...
Filing taxes in Indiana and in a pending divorce.	11/19/2009
Q: My question is: My soon to be ex husband and I are having to file income taxes jointly due to the ... A: Brenda, Thanks for your question. No, he does not have a right to half the taxes. You do not have ...
real property transfer	11/19/2009
Q: Is there any way to avoid gift tax when transferring real property between relatives? A: Ben, Thanks for your question. Unless you are talking about a very large transfer, there should ...
Charitable Contribution	11/18/2009
Q: I'm not sure if my last question went into a pool or went directly to the person I selected, but I ... A: Sorry, I saw that part, and failed to answer it. I had about 6 questions come in at the same time ...
overseas tax exemptions	11/18/2009
Q: I am working for a US company as a contractor in Iraq. This year I will have spent 160 days ... A: Jeff, Thanks for your question. You must have a physical presence in a foreign country for 330 ...
Charitable Contribution	11/18/2009
Q: I'm not sure if my last question went into a pool or went directly to the person I selected, but I ... A: John, Thanks for your question. The church will need to complete a statement acknowledging the ...
rule 330	11/18/2009
Q: If I work international less than 330 days, but stay out of country unemployed for 330 days, does ... A: Bill, Thanks for your question. The 330-day physical presence test does not require that you be ...
inherited foreign cash	11/18/2009
Q: I am a US Citizen. My father is in a nursing home in Canada. About 2 years ago,my brother, who lives ... A: Paul, Thanks for your question. If it occurs after the death of your father, it would be ...
Stock merger treatment	11/18/2009
Q: My company may merge with another company. The other company has assigned a value to my company and ... A: Greg, Thanks for your question. You will have a carryover basis in the new stock. In other words, ...
Contracted Labor	11/17/2009
Q: John, Our company is a small company that moved from Texas to Kansas. In Texas our Sales Reps. were ... A: Denise, Thanks for your question. That is pretty much a federal questions, although states may ...
cap gain on land sale	11/17/2009
Q: Parents gave me a lot in 1990, I paid $1. I want to sell it and I would like to know what the tax ... A: Diane, Thanks for your question. Actually you do not pay tax on the gain. Since the selling price ...
1099-Misc Non-Employee income	11/17/2009
Q: Through divorce I received NQ Stock Options transferred to me to sell myself as I was in a low tax ... A: I still think that it cannot be treated as Schedule C income, since it is having FICA and Medicare ...
1099-Misc Non-Employee income	11/17/2009
Q: Through divorce I received NQ Stock Options transferred to me to sell myself as I was in a low tax ... A: Jim, Thanks for your question. Not certain what 1099-MISC income you refer to. If you mean the ...
Sale of Second Home	11/17/2009
Q: We own a condominium in the Buffalo, NY area that was used primarily in the winter as a safe haven ... A: Paul, Sorry, but the gain must be reported in the year of sale. The only exception would be if you ...
college tution	11/16/2009
Q: My son is 37 yrs. old. He lives in one state & we live in another. He went back to school to become ... A: Brenda, Thanks for your question. You cannot claim him as a dependent as he does not live with ...
Residence state	11/16/2009
Q: John: My home is in Colorado where I have worked previously, and hope to retire to, in 4 years. I ... A: Jim, Thanks for your question. That is correct. Under IRS rules, if your assignment lasts for ...
401K early withdraw	11/16/2009
Q: My husband is trying to withdraw money from his 401K in order to satisfy our divorce settlement. My ... A: Dana, Thanks for your question. You will have no tax consequences. The withdrawal is taxable ...
Freelance and Deductions	11/16/2009
Q: I've read through IRS Publication 463 and I'm trying to figure out how to handle deductions for my ... A: Steve, Thanks for your question. If you maintain your CA apartment, your tax home would remain CA ...
"Article of Agreement" question, please!	11/15/2009
Q: My husband and I looked at a house a couple of years ago. It was/is my dream home, but out of our ... A: Tammy, Thanks for your question. First, receiving payments in cash and not reporting it is fraud. ...
Will my parents have to pay taxes on a house they rent to me?	11/14/2009
Q: My parents bought a new home, they still have a mortgage on their current residence that they will ... A: Sue, Thanks for your question. Since they are paying the mortgage and charging you rent, they will ...
INHERITED ANNITY	11/14/2009
Q: JOHN, AS I HAVE READ I WOULD INCLUDE AN INHERITED ANNUITY ON MY INCOME TAXES, BUT IF I WAS TO TURN ... A: Kim, Thanks for your question. It does not matter what you do with the money, you must pay taxes ...
Child-care FSA	11/13/2009
Q: I participate in a child-care FSA through my employer. It is funded to the maximum $5000 limit. Do ... A: Laura, Thanks for your question. You must provide the taxpayer ID for the child care provider or ...
Short Sale Investment Property	11/13/2009
Q: John Trying to see if better to shortsale or do a deed on lieu Investment property in Florida I owe ... A: Angela, Thanks for your question. Since it is an investment property, the only exemption you could ...
House Fire taxes	11/13/2009
Q: Due to my home's contents worth extending what I had for insurance, does the insurance agency ... A: Lisa, Thanks for your question. You will need to reconstruct a list of what you lost in the fire ...
Tax exemption while working overseas	11/13/2009
Q: I am considering an overseas job. Please provide details of the income tax exemption. Does the ... A: Brenda, The other test is the bona fide residence test. Under this test, you must be a bona fide ...
Out of State Job	11/13/2009
Q: I had to take a job out of state and leave my home empty. I understand I should be able to deduct ... A: Richard, If you are going back to your old home and the current job is expected to last less than ...
inheritance tax	11/13/2009
Q: My mother recently passed away. After the estate is settled I would estimate my share would be ... A: Mark, Thanks for your question. Inheritances are not taxable income, so you do not report them on ...
Tax exemption while working overseas	11/12/2009
Q: I am considering an overseas job. Please provide details of the income tax exemption. Does the ... A: Brenda, The 330 day physical presence test must be met for as long as you take the foreign earned ...
Business Travel Expenses	11/12/2009
Q: The situation: I am a sole propietor and work in a city, however have been traveling quite a bit to ... A: Anita, Thanks for your question. If the work for this particular business is for more than 12 ...
K-1 and Double taxes?	11/10/2009
Q: My three brothers and I have a LLC set up to remove some of my mother’s assets from her name at her ... A: Robert, Thanks for your question. I presume that the LLC is being treated for tax purposes as a ...
Qualifying Child	11/10/2009
Q: I asked our local IRS representative if I could claim my daughter who will be a full time student ... A: Jeff, Thanks for your question. The IRS representative is incorrect. If she meets the ...
Gifting a 1031 property	11/9/2009
Q: For three years my husband and I have owned a rental property we bought as a 1031 exchange. We paid ... A: The $13,000 is an annual exclusion and can be given to an unlimited number of individuals. It is ...
Gifting a 1031 property	11/9/2009
Q: For three years my husband and I have owned a rental property we bought as a 1031 exchange. We paid ... A: Karen, Thanks for your question. No tax problem if you follow all the procedures. Since the gift ...
tax fraud in undesignated offerings?	11/8/2009
Q: I understand that when the donor of a designated offering exerts undue control over the gift, then ... A: If the church is holding a "special offering" for a specific purpose - evangelist, parsonage ...
Sale of inherited foreign property	11/8/2009
Q: My father-in-law passed away in Taiwan 28 years ago and left the family house to my wife and her 5 ... A: Hou, Thanks for your question. No you cannot treat the entire amount as an inheritance and avoid ...
Condo Association Common Property	11/8/2009
Q: The New Jersey Turnpike Authority (NJTA) recently acquired about an 2 acres of common property from ... A: JoAnn, Thanks for your question. Normally, unless the association distributed the proceeds to the ...
Tax ID for deceased and Trust transfers	11/8/2009
Q: My 98 yr old mother passed away recently. I am on her checking and saving accounts. Do I need to ... A: Patti, Thanks for your question. You need to get a taxpayer ID number for the estate and for the ...
Filing requirement	11/8/2009
Q: I filed an Articles of Incorporation with Secretary of State on May 2007, but I did not start my ... A: Since there is no income and no expense and you have not filed a previous return, this is likely ...
Income taxes for co-owned rental property	11/7/2009
Q: What is the best way to handle the income taxes for a 50-50 co-owned rental property that located in ... A: Lincoln, Thanks for your question. Since it is not a partnership or an LLC, it is simply a joint ...
tax treatment of services that may include housing	11/6/2009
Q: An individual may provide property management, maintenance and repair service to me at an apartment ... A: Ken, Thanks for your question. First off, under the arrangement you have outlined, he would not be ...
Disability Income and FICA Tax	11/6/2009
Q: In a previous answer, you stated that disability income is not subject to FICA. That does not seem ... A: I can't speak for the insurance company, but my wife is on disability, I have done numerous returns ...
Effectively connected income in USA	11/6/2009
Q: 1. An Indian company realises it may have unreported taxable income in USA due to providing services ... A: Amitabh, Since the statute of limitations does not begin until the return is filed, they are ...
contract work tax filing	11/6/2009
Q: I am contemplating accepting a job where the employer does not take out taxes so I will be ... A: Brenda, Below is my original answer. Please ignore the "4" after January. Sorry for any ...
Mileage taxed without 1099 form	11/6/2009
Q: I just got a letter from the IRS saying I owe $711 plus a $59 late fee on $2543 of "non-employee ... A: Jim, Thanks for your question. The form itself would not help, as the IRS has a copy already. If ...
K-1 (1065)	11/5/2009
Q: I have a few questions in filling out Schedule K-1 (1065): Part II L: Partner's capital account. ... A: Jeff, Thanks for your question. The cash account is an asset. The capital balance is the amount ...
Question regarding IRA distribution and gifting	11/5/2009
Q: My retired father (age 68) has various IRA accounts. He thinks it's a waste to let the money sit ... A: Angelina, Thanks for your question. Any withdrawal, regardless of what he does with the money is ...
tax liabilty	11/5/2009
Q: If my primary residence is in CA, but I own a second home in Oregon and do some work online from ... A: Rich, Thanks for your question. If the money is earned in OR, you owe state taxes on it. Since ...
married filing separate	11/5/2009
Q: My wife and I are separated and headed toward divorce. I make about 40,000 this year and have quite ... A: James, Thanks for your question. If you file separately, you cannot be held liable for what is on ...
Roof deduction??	11/5/2009
Q: I am renting a house to my sister in Georgia, I live in California. The idea is to rent it to her ... A: Joanne, Thanks for your question. The cost of repairs and replacing the roof is not deductible at ...
Rental Property LLCs what tax forms to use?	11/5/2009
Q: My wife and I own 2 residential apartment buildings owned as LLC's. Up until now I have used ... A: Schedule K of Form 1065 is a part of the 1065. It is the summary of all K-1's that are issued. If ...
Taxes	11/4/2009
Q: Im a Texas resident and drive 90 miles round trip everyday to work in NM. Not sure that matters, ... A: Matt, Thanks for your question. You will need to file in New Mexico as a non resident, paying tax ...
Rental Property LLCs what tax forms to use?	11/4/2009
Q: My wife and I own 2 residential apartment buildings owned as LLC's. Up until now I have used ... A: Jeff, Thanks for your question. The IRS agent was mostly right. Since you are now operating the ...
installment contract pmts deductible	11/4/2009
Q: I purchased a piece of property in an area where the Sewer district did some improvements. My ... A: Dominic, Thanks for your question. It depends on the use of the property. If it is personal use ...
Should I file "1" or "0"	11/4/2009
Q: How do I know whether to file "1" or "0" on my taxes? And what to file after any raises. Is there a ... A: Jessica, Thanks for your question. There is a worksheet that accompanies the Form W-4 that you can ...
Unreimbursed employees expenses	11/3/2009
Q: In 2007, I had unreimbursed employees expenses. I am no longer working for this employer. It is my ... A: Even if you were still employed by this employer or could contact him, he would not have any records ...
tax on sale of vacant property	11/3/2009
Q: I got married in December of 2006. Earlier that same year, my now husband sold a vacant property ... A: Stephanie, If you filed separately in 2006 you are not liable for any misstatements on the return ...
Selling home	11/3/2009
Q: My wife and I bought a house in Maryland in 1986. We want to sell it in July 2010. In 2000 I moved ... A: Scott, Thanks for your question. It does not matter what you do with the proceeds, it does not ...
Severence Taxes	11/3/2009
Q: I've just been offered a severance package that will push me into a higher tax bracket for 2009. I ... A: Steve, Thanks for your question. Assuming you itemize your deductions, you can make some ...
Gift Money	11/2/2009
Q: I don't work but am married and my wife works while I am in school and my parents gift me money each ... A: If it is not earned income, it is not eligible for the EIC. Earned income is the only income that ...
tax on sale of vacant property	11/2/2009
Q: I got married in December of 2006. Earlier that same year, my now husband sold a vacant property ... A: Stephanie, Thanks for your question. The tax would be 15% maximum on the gain. However, since he ...
no taxes taken out of paycheck	11/2/2009
Q: I just started a job that pays every two weeks and I will be bringing home $2000.00 a month and the ... A: Yolanda, Thanks for your question. You will have to make quarterly estimated payments on Form ...
home purchase	11/1/2009
Q: John, we are going to be buying a new home in 2010. The purchase price will be around $225,000. We ... A: Harv, Thanks for your question. You need to evaluate the return on your investment as compared to ...
Tax benefits of mortgage on investment property or principal home	11/1/2009
Q: We would like to refinance and combine our principal home mortgage and our investment property ... A: Julie, Thanks for your question. Regardless of how you treat the mortgage, you must allocate the ...
Hidden Tax implications for the Traveling Physical Therapist	11/1/2009
Q: I have been a practicing Physical Therapist for 9 years working for a local hospital. I am ... A: Richard, Thanks for your question. Several issues raise their ugly head here. First, I don't know ...
Tax on Trust Distribution	11/1/2009
Q: My grandmother transferred property to my sisters and I via an irrevocable trust in 1997. The ... A: Colleen, Thanks for your question. Based on what you have said, the property was a gift to you. ...
international money transfer	11/1/2009
Q: I have some money in my home country that I want to transfer to my US bank account to pay for down ... A: Alp, Thanks for your question. 1. The money is not taxable, assuming it was not earned income ...
taxi driver taxes	10/31/2009
Q: am recently renting a taxi car from owner so i acn drive/work as cab driver. I am told i am an ... A: Tony, Thanks for your question. It sounds as if your records are pretty good. I would advise you ...
early w/d from IRA	10/31/2009
Q: Would a person be able to take money from an IRA tax/penatly free to do things such as replace ... A: Gary, Thanks for your question. You can not withdraw IRA funds tax free unless if was funded with ...
Tax consequences of debt forgiveness	10/30/2009
Q: My wife and I bought a very small 12-unit complex in a very rough part of Phoenix. The seller ... A: Dale, Thanks for your question. Since it is an investment property, you will owe tax on the debt ...
sales tax on a new car	10/30/2009
Q: What are the rules for deducting the sales tax on a new vehicle purchased in 2009 for 2009 income ... A: Arlene, A new vehicle must be purchased between Feb 17, 2009 and December 31, 2009. The deduction ...
501 c 3 responsibility	10/30/2009
Q: Mr. Stancil, Thank you for your service. A friend recently took over an existing 501 c 3 ... A: Mike, Ouch! Thanks for your question. The corporation is liable for the taxes. Since she is in ...
529 plan	10/30/2009
Q: I think that in the state of Pa. deposits to a 529 fund, the money is tax deductible up front. Did I ... A: Rich, Thanks for your question. Contributions to a 529 plan are not tax deductible. A 529 plan is ...
bond funds	10/29/2009
Q: i purchased tax free income bond funds. i am not receiving the dividends or income. will i receive a ... A: Louie, Thanks for your question. Yes you will get a 1099 assuming there are distributions. It ...
Taxable gifts	10/29/2009
Q: I work for a church and money was collect by the members as restricted giving for an employee who ... A: Becki, Thanks for your question. The money is taxable and included on her W-2. If you do not give ...
rentals with high income	10/29/2009
Q: Sir, I found out the hard way last year that the rental income write off are not allowed if you make ... A: Scott, Thanks for your question. You would have to be classified as a real estate professional. ...
Gift Tax	10/28/2009
Q: Please clarify something for about regarding the $13,000 gift tax exclusion. The only benefit I see ... A: You would have to file a gift tax return because the 2K would be counted against your lifetime ...
Gift Tax	10/28/2009
Q: Please clarify something for about regarding the $13,000 gift tax exclusion. The only benefit I see ... A: Teena, Thanks for your question. You have a couple of misconceptions. First, gifts are never ...
coaching mileage	10/27/2009
Q: I am a paid coach, I did not receive any forms last year, it was my first year and was only paid ... A: Leanne, Thanks for your question. Yes, mileage is deductible. Meals are 50% deductible when you ...
First time home buyer question	10/27/2009
Q: I was sure exactly where to go to ask this question rather to go to a tax or real estate type area. ... A: Christian, Thanks for your question. The credit is available for any home. Earlier you could ...
Is a church supposed to issue a 1099-MISC to benevolence recipients?	10/27/2009
Q: There has been some disagreement over some tax issues (and various informal oral advice received ... A: Scott, Thanks for your questions. I can't give you any IRS citations as that would require more ...
Severance tax	10/27/2009
Q: My company is moving to mexico, and we will be getting our severance packages next month. We were ... A: Gina, Thanks for your question. In IRS terminology, this is considered a "supplemental payment." ...
Signing Bonus Repayment	10/26/2009
Q: I received a signing bonus of 10k (actually, two bonuses of 5k each) for signing on with a company. ... A: Kevin, Since you received the bonus in 2009 and will not be paying it back until 2010, you have ...
First Time Home Buyer tax credit	10/26/2009
Q: I really appreciate it. Q: If my husband and his mother buy a home jointly, can they still qualify ... A: Jessica, Whoever you addressed your question to could not answer it at this time, but I can give ...
SSD	10/26/2009
Q: Need help how to know if SSD is taxable or non-taxable. My Husband is receiving a gross income from ... A: Concon, Whoever you sent your original question to could not answer it at this time. Depending on ...
rental property	10/25/2009
Q: I am purchasing a home for my grand-daughter, the house will be in my name. She will be making the ... A: Susie, Thanks for your question. No, it is not a rental property. You are not receiving any rent. ...
Tax on Per Diem	10/25/2009
Q: I am a contractor working for L-3 in Afghanistan. I am told that the Per Diem is not taxable. But ... A: Donald, Thanks for your question. Actually, if your assignment is for more than 12 months, all of ...
Tournament Sponsorship	10/25/2009
Q: I am a member of a team that wants to host a sporting event tournament. We are looking for ... A: Under your present situation, nothing changes from my original answer. You are an unincorporated ...
inheritance taxes	10/25/2009
Q: I will receive an inheritance this taxable year (2009) of $80,000 from my Aunt's estate. She lived ... A: Janice, Thanks for your question. There is no federal inheritance tax, so you have no obligation ...
Tournament Sponsorship	10/25/2009
Q: I am a member of a team that wants to host a sporting event tournament. We are looking for ... A: Jen, Thanks for you question. Assuming that you are not a qualified tax exempt organization, the ...
Do I need to file a tax return?	10/24/2009
Q: I'm a 1st yr college student living in a dorm. School financial aid covers all my tuition and other ... A: Royce, The portion of your scholarship that covers something other than tuition, books, and fees is ...
Taxes on Forgiveness of Debt	10/24/2009
Q: I am a Limited partner in an LLC with a $14MM 1st and $2MM 2nd with a golf course as collateral. ... A: Tony, Thanks for your question. It is most definitely forgiveness or cancellation of debt. As a ...
Short Sales Tax Implications	10/24/2009
Q: I recently sold a rental property in Florida via a short sale. The mortgage balance on this house ... A: Your assets must be listed at fair market value, and you must include everything you own - stocks, ...
Short Sales Tax Implications	10/24/2009
Q: I recently sold a rental property in Florida via a short sale. The mortgage balance on this house ... A: There is no 30% bracket. Depending on your deductions, exemptions, and credits, you would be in the ...
Short Sales Tax Implications	10/23/2009
Q: I recently sold a rental property in Florida via a short sale. The mortgage balance on this house ... A: Rich, Thanks for your question. You will be subject to tax on the amount of forgiven debt, ...
sell of fathers home taxable	10/23/2009
Q: My adult children recently inherited 10K from their father's sale of home in Texas. He died without ... A: Julia, The gain on the sale is taxable. Gain is determined by subtracting the basis from the ...
tax fraud in undesignated offerings?	10/23/2009
Q: I understand that when the donor of a designated offering exerts undue control over the gift, then ... A: Colin, Thanks for your question. The situation you describe is not be the best of situations, as ...
child care tax credit	10/23/2009
Q: john, i am curious to know if my ex-husband, who pays child support, is able to deduct our son's ... A: Amber, Thanks for your question. In order for him to take that credit, you son must be his ...
Filling out a W-4 for a teenager	10/22/2009
Q: My grand child made less than $300.00 on a part-time job. We claim her on our taxes, but she has to ... A: Joy, Since she does not claim her own dependency exemption, she must claim zero withholding ...
Software Contractor mileage and per diem	10/22/2009
Q: I am a software contractor, with some of the income 1099 and some temporary status W2. The job is ... A: I can't say for certain without examining your information and return, but employee business ...
Software Contractor mileage and per diem	10/22/2009
Q: I am a software contractor, with some of the income 1099 and some temporary status W2. The job is ... A: Don, Thanks for your question. Only the 1099 work would be on schedule C. The W-2 expenses would ...
Non-Resident Tax Refund Fraud Question	10/22/2009
Q: A friend of mine(Non-resident) has worked in United States for 3 months and went back to his native ... A: Vilas, That is fraud. If you file for him and sign the return (either on paper or an electronic ...
Delinquent Filing - Non-Profit	10/21/2009
Q: I am also an Expert at Allexperts; however, my expertise is Microsoft Excel :). I recently became ... A: Nathan, Thanks for your question. First, I am not familiar with 401(c)(4) in this regard. Did you ...
tax implications	10/21/2009
Q: My husband and I have purchased a second home in which my mother-in-law lives. My sister in-law ... A: Iadora, Thanks for your question. The loss on the sale is not deductible for two reasons, either ...
Employer not withholding taxes	10/21/2009
Q: I recently was employed for two months with a company that did not with hold payroll taxes. When I ... A: Gilbert, Thanks for your question. Most likely he is treating employees as independent contractors ...
Working tax exempt overseas, but not for the entire 330 days	10/21/2009
Q: I have read some of the responses that you've posted online regarding tax emption with overseas ... A: Ronald, Thanks for your question. That is correct. In order to meet the physical presence test ...
taxes on stock	10/20/2009
Q: i would like to sell some stock and I am 60yrs old but also working making 25,000. a year.How much ... A: Sylvia, Thanks for your question. If you have owned the stock for more than 12 months, it will be ...
TAXES ON IRA CONVERTIONS	10/20/2009
Q: I am 67 and my wife 70, we are contemplating converting a large sum of money from my conventional ... A: Jim. Thanks for your question. You will have two years (2011 and 2012) to pay the tax. It will be ...
Employee or No	10/19/2009
Q: Our church meets at a local High school. We are currently paying one of the students from the Drama ... A: Tiffany, Thanks for your quesiton. The student is "working under your control" and is an employee. ...
Taxes on sale of home	10/19/2009
Q: My Question : We ( my sister and brother )are equal partners in a trust that was formed.( ... A: Cost basis is your basis in the house. If your mother is still living or if title was conveyed to ...
Taxes on sale of home	10/19/2009
Q: My Question : We ( my sister and brother )are equal partners in a trust that was formed.( ... A: William, Thanks for your question. Yes, this is capital gains. You will owe tax on the difference ...
Capital Gains	10/19/2009
Q: "My wife's mother passed away in 2005 and left her 7 siblings 320 acres of land. The land is being ... A: Craig, Thanks for your question. There is no separate capital gains tax. What you have in this ...
401(k)	10/19/2009
Q: My husband wants to withdraw from his company 401(k) plan and buy a fixer-upper house with small ... A: Ruth, Thanks for your question. You should be allowed to make the withdrawal. However, the taxes ...
sale of LLC stock	10/18/2009
Q: All shares of stock of LLC-1 (a three member LLC in the investment business that is taxed as ... A: Murray, Thanks for your question. An LLC does not officially have stock, just ownership. Basis is ...
Stock Basis from Inheritance	10/17/2009
Q: My mom and dad were married and had all their assets combined. Mom died on 9/1/07. All assets ... A: Andy, Mike could not take your question, but I can give you an answer. The basis in the stock is ...
Father's Estate	10/17/2009
Q: I will be getting about $50,000 from my father's estate. I live in NY State. I am a senior living ... A: Shelley, You don't have a tax problem. Inheritances are not taxable income and NY state does not ...
property taxes and mortgage interest	10/16/2009
Q: I, my wife and son are all named on a mortgage and the deed to a property purchased for my son to ... A: Mark, Thanks for your question. In order to deduct either of those two items, two factors must be ...
1099-c Investment Property	10/16/2009
Q: Mr. John Stancil. I had a investment property and has been foreclosed on Sept 2008. I received the ... A: Corey, Thanks for your question. I can't tell you what the canceled amount was - it was the ...
Sweepstakes taxes	10/15/2009
Q: I won the Ultimate Family Reunion estimated value $11,500. I wanted to know what the tax rate would ... A: Kathy, Thanks for your question. The tax would be based on your total income and filing status. ...
sole proprietership taxes	10/15/2009
Q: I've had a sole proprietorship for 18 months and have not filed/paid any taxes. The only records of ... A: Arthur, Thanks for your question. Go immediately to a qualified tax return preparer. Find a CPA ...
Gaming Winnings	10/15/2009
Q: R. Mcconnaughy, I have won quit a bit of money at our local casinos here in oklahoma around ... A: David, Mr. McConnaughy could not take your question, but I can help. The winnings are taxable ...
Schedule C	10/14/2009
Q: We have filed a Schedule C for years, having a small home business. However, this year we do not ... A: Rebecca, Thanks for your question. Filing requirements are based on gross income, not net or ...
Estate Tax Exemption	10/14/2009
Q: John: I have a question which may be no brainers for you. The Estate Tax exemption this year is 3.5 ... A: Nicholas, Thanks for your question. The $3,500,000 is the value of the estate that may be excluded ...
Capital Gains on Easement Purchase	10/14/2009
Q: The county has purchased an easement along one side of my main residence property to widen the ... A: Angel, Thanks for your question. You will have to allocate a portion of the cost of the lot to the ...
401K Termination and Withdrawl	10/14/2009
Q: John, I used to work for company A and through them I was making contributions to my 401K. About a ... A: Robert, Thanks for your question. That is about right. You would be taxed on the amount not rolled ...
Is G-4 visa non-resident for tax?	10/14/2009
Q: I am a US Citizen and recently got married. My spouse in currently on G-4 status here in the US, ... A: Derek, A G-4 visa holder is considered a non-resident alien for tax purposes. However, she is ...
Sole Proprietorship to LLC	10/13/2009
Q: I have a contractor who operated his own business as a sole proprietor for the first 6 months out of ... A: Davis, Thanks for your question. Not sure what you are talking about with the 24 months stuff. ...
Meal Stipend	10/13/2009
Q: I work from my home in Utah and my Company base is in Arizona. We have several staff members that ... A: Linda, The IRS has a set meal allowance, the amount depends on the location. If they are ...
rental property and taxes	10/13/2009
Q: So could I set up a corporation for the rental property and then get tax advantages ? What would be ... A: That would be of minimal benefit, if any. A pass-through entity such as a partnership, s corp, or ...
Rental Property	10/13/2009
Q: I will purchase rental property($400K),and can rent furnished in the area for $2400-2500/month.Is is ... A: That is correct. Above $150K you can't deduct any part of the rental activity. From a tax ...
Rental Property	10/13/2009
Q: I will purchase rental property($400K),and can rent furnished in the area for $2400-2500/month.Is is ... A: Sorry, but you can't even deduct the interest, as it is a part of the rental activity and shown on ...
life estate	10/13/2009
Q: My mother is deceased. My sister and I received ownership of her home due to a life estate. We have ... A: Barbara, If you sold it for a gain, taxes will be due on the profit. It will be taxed at the ...
Rental Property	10/13/2009
Q: I will purchase rental property($400K),and can rent furnished in the area for $2400-2500/month.Is is ... A: Freddy, Thanks for your question. I can't advise you on how much to borrow. The only tax effect ...
IRA Conversion tax	10/13/2009
Q: Can I use the loses from selling stocks to offset the taxes generated from converting a traditional ... A: Dave, Only to an extent. Losses from buying and selling securities are capital losses. You can ...
1099R	10/12/2009
Q: I have 5 1099R's. Two are are distribution code G. The other 3 are distribution code 7. I am ... A: Emmy, Thanks for your question. You should not have any penalty. Code G is a direct rollover, so ...
Casual Laboror	10/12/2009
Q: I Am Going To Pay My Future Husband Certain Amounts Of Money By Check For Certain Jobs Here And ... A: Mary, Thanks for your question. You would be considered his employer and you would have to file a ...
Sale of land and reinvestment	10/12/2009
Q: My parents recently were forced into selling agriculutral/farm land to the state of Kentucky for a ... A: Bobbie, Thanks for your question. This is not a 1031 exchange, as they have received the cash. It ...
is term insurance a writeoff for a business?	10/12/2009
Q: Stancil, I have three questions for you. 1. Can a small business write off individual term ... A: Dave, Thanks for your question. The life insurance is not deductible if it is on you and your ...
sale of propety that is both personal residence and residential rental	10/12/2009
Q: I am elderly and am planning to sell propety that I have lived in and owned for over ten years. ... A: Tracy, Thanks for your question. You can exclude the gain on the portion that is your primary ...
Pension Inheritance	10/11/2009
Q: My mom recently passed away leaving myself and my 2 brother around $96,000 each in a pension ... A: Adrian, Thanks for your question. Usually inheritances are not subject to income tax. The primary ...
per diem	10/11/2009
Q: I have an 11 month contract to work in Pittsburgh starting Nov 2nd. I currently live in Durham, NC. ... A: Sure, they can lower your pay rate and pay you a per diem amount. However, you pay must meet the ...
Iraq	10/10/2009
Q: I have been out of the country from Jan to July. I returned to the States in July and stayed for 6 ... A: David, Thanks for your question. You do not qualify for the foreign earned income exclusion since ...
per diem	10/10/2009
Q: I have an 11 month contract to work in Pittsburgh starting Nov 2nd. I currently live in Durham, NC. ... A: Designating a part of your rate as per diem is strictly optional with your employer. If they choose ...
per diem	10/10/2009
Q: I have an 11 month contract to work in Pittsburgh starting Nov 2nd. I currently live in Durham, NC. ... A: Rich, Thanks for your question. It cannot be considered per diem unless your employer designates ...
Standard Meal Expense	10/9/2009
Q: Stancil: This past year, I performed as a contractor in a band that played throughout the ... A: Robert, Thanks for your question. The IRS states that days you depart and return can be handled in ...
Schedule C	10/9/2009
Q: 1) Can we deduct charitable contributions made by our business under "other expenses"? (cash ... A: Sandi, Thanks for your question. Since the IRS does not regard the Schedule C business as a ...
Foreign taxes	10/9/2009
Q: I have dual American and an EU-Member State citizen and have been living in Europe most of my life. ... A: Gerald, Thanks for your question. Yes, you would owe taxes on the excess above the foreign earned ...
childcare FSA	10/8/2009
Q: My husband and I are owners of an owner-occupied multi-family property which is not llc'd or ... A: Rebecca, Thanks for your question. You are caught in a bad situation. First, the rental property ...
employment abroad	10/8/2009
Q: I am a US citizen and work for an international company abroad. My salary is less than $ 90,000.00 ... A: John, Thanks for your question. If you have been physically present in a foreign country for 330 ...
Tax on the sale of an easement	10/8/2009
Q: There is a housing development going up on the backside of my property and they need to use a ... A: Nathan, Thanks for your question. Yes, the sale would be taxable. You would have to allocate a ...
rent house from son	10/7/2009
Q: We are selling our house to our son who lives in New York. It is going to be his investment ... A: Nadia, Thanks for your question. There is no tax requirement that you must pay rent. Since you ...
Corporate vehicle questions	10/7/2009
Q: I'm following up another individual's question with a more specific inquiry: I created and employ a ... A: John, Thanks for your question. 1. The cost of a vehicle is not deductible, you must depreciate it ...
Head of Househole	10/7/2009
Q: I recenlty got married and was wondering if i should change my tax status to HOH? What will this do ... A: Danny, Thanks for your question. If you are married you CANNOT file as head of household. Your ...
Capital Gains tax	10/7/2009
Q: We have farm property we are selling and want to take the payment in 2 years. Half in 09 and the ... A: Gayle, In regard to federal taxes, there is no exclusion of $50,000 of gain. The only such ...
short sale on rental property	10/7/2009
Q: I bought a condo in Florida for 270,000. I have a mortgage for 250,000. It is being sold at short ... A: Robert, Thanks for your question. You will owe tax on $150,000 based in the information you have ...
Income Taxes On Inheritance	10/7/2009
Q: We live in Minnesota. My mother in law recently passed away after signing a transfer on death deed ... A: Deb, Thanks for your question. You are not subject to inheritance tax on this unless the total ...
Gifting land over multiple years	10/6/2009
Q: My wife and I are looking at purchasing/receiving a piece of land from her parents. Currently the ... A: Kevin, Thanks for your question. From a gift and income tax standapoint there is nothing to ...
Per Diem Deductions	10/6/2009
Q: I travel for work and work pays for my logging but they only pay me $25 for meals and incidental ... A: Andrew, Thanks for your question. Yes, you can deduct the additional amounts. They would be ...
Foreign Taxable Income	10/6/2009
Q: I have lived in England for almost 3 years and have married a local person shortly after arriving. I ... A: Katie, Thanks for your question. Since your spouse is a non-resident alien in regard to the U.S. ...
1099 for per diem	10/6/2009
Q: We have employed an independent contractor and are paying his lodging and $22 daily per diem. He ... A: If you are paying the lodging directly, it is not to him and is not income to him, so it would not ...
Inheritence taxes	10/6/2009
Q: Regarding the question you answered (below), how will I report the income I receive from my departed ... A: The IRA distribution will be reported on page 1 of the 1040 on the line for IRA's, line 15a and b. ...
Coin investments	10/6/2009
Q: I travel quite a lot and sometimes purchase investment coins. It has been a hobby, but I am now ... A: Dan, Thanks for your question. For it to qualify as a business, there are a number of factors ...
owe the IRS now divorced	10/6/2009
Q: I am just recently divorced and we have been paying the IRS monthly for past taxes. He just pays me ... A: Tammy, Thanks for your question. That would have to be worked out with the IRS, but you are not ...
Alimony taxes	10/6/2009
Q: 2009 is my first year after getting divorced. I will pay my ex wife $31,800 in alimony in 2009. If ... A: Chris, Thanks for your question. It is difficult to say, depending on her filing status and other ...
cel phone reimbursement	10/6/2009
Q: This is a two fold question. I work for a large non profit organization which used to supply cell ... A: Cornelia, Thanks for your question. They don't reimburse the taxes because they choose not to. ...
Claiming my mother as a dependent	10/6/2009
Q: I would like to know if I can claim my mother as a dependent. She is retired, and collects Social ... A: Charles, You can claim her if you pay over half her support and if her gross income is less than ...
TRAVELING MINISTERS	10/6/2009
Q: I have an itinerant minister as a client. I took over his account from another tax preparer who I ... A: Absolutely not. He would have to be an employee of the tax exempt organization, receiving a W-2. ...
TRAVELING MINISTERS	10/6/2009
Q: I have an itinerant minister as a client. I took over his account from another tax preparer who I ... A: You have an inconsistency here. A 501(c)(3) must be a corporation. If he is an IRS approved ...
TRAVELING MINISTERS	10/5/2009
Q: I have an itinerant minister as a client. I took over his account from another tax preparer who I ... A: Larry, Thanks for your question. Revenue Ruling 64-326 states that each church paying him must ...
Rental Property Depreciation	10/5/2009
Q: I saw your response to a question about property depreciation. Is there a way to add to your cost ... A: Michael, Thanks for your question. No, there is no provision for that. The disallowed loss is a ...
a variable annuity that is taxed as ordinary income	10/5/2009
Q: We cashed out an AIG variable annuity last year which is taxed as ordinary income. Can we offset the ... A: Sandra, The annuity is ordinary income, as you have observed. You cannot use passive or capital ...
Reportable income	10/5/2009
Q: My son collects SSI monthly and I charge him rent from it monthly. Do I need to be reporting the ... A: John, Thanks for your question. Yes you do need to report your rental income. If it is considered ...
Corporation vs. LLC	10/4/2009
Q: In PA is it more advantages to be a LLC or a Corporation as far as FED and STATE tax treatment. It ... A: William, Thanks for your question. For income tax purposes, an LLC is a disregarded entity, ...
Tax on 1099	10/4/2009
Q: I am an Indian student. I graduated in Dec 2008 after doing MS in Computer Engineering. I am right ... A: Shakti, The 1099 income will be reported on Schedule C of your 1040. You will also need to ...
Short sale Question	10/4/2009
Q: I bought a condo about/less than 5 years ago. We lived in it for 2+ years and we have been renting ... A: Ron, Thanks for your question. First, you will owe tax on the forgiveness of the second mortgage, ...
Unemployment tax law	10/3/2009
Q: I got laid off recently. I am planning to buy a computer to help me look for a job, writing resume, ... A: Pat, Thanks for your question. Only to the extent it is used for your job search. You would have ...
Invalid IRA Contribution	10/3/2009
Q: I saw an earlier response (from 2004) that you provided to someone with a situation that had some ... A: Simon, Thanks for your question. The $600 from a focus group is earned income and should be ...
overseas pension	10/3/2009
Q: My father was bron in NY. He went to the army during Vietnam and ended up in UK for 22 years. (hence ... A: Dan, Thanks for your question. As a U S citizen living abroad, he would be entitled to the Foreign ...
401k Options	10/3/2009
Q: If my company is bought by another company and I become an employee of the new company would this be ... A: Joe, You can make the withdrawal at any time, subject to provisions in the 401(k) agreement with ...
Part-time tax cuts for employees	10/1/2009
Q: I recently joined a part-time job as an employee in a company. My husband holds a full time job and ... A: MEERA, Part-time doesn't give you any breaks. On your W-4 you and you husband can only claim, in ...
Mortgage Tax Credit	10/1/2009
Q: Odd situation here. My wife and I divorced this year and I was awarded the house. Currently, she is ... A: Michael, You don't get a credit for the mortgage tax. You can take a deduction for the mortgage ...
Tax Deductibility of Donations to specific persons	9/29/2009
Q: I work for a church and often we have people in need of financial help. There are others in our ... A: Kevin, Thanks for your question. When a donation is made to the church with the stipulation that ...
1099 R disability income	9/28/2009
Q: Is 1099 R disability income considered earned income since it's reported on line 7 ? Does it have ... A: Benefits reported on a 1099-R are not reported on line 7. Disability benefits reported on a W-2 ...
Rent from a sole prop to himself	9/28/2009
Q: It is greatly appreciated. My question is concerning Schedule C. May a sole proprietor who ... A: Karin, Thanks for your question. No. As a sole proprietor, the Schedule C business is not ...
sale of inherited/rental/renovated property	9/28/2009
Q: Could you please advise regarding proper tax treatment for sale of inherited property described as ... A: LM, Thanks for your question. Capital losses are limited to $3,000 per year in excess of capital ...
Tax Audit & Back Taxes	9/27/2009
Q: I received 2 letters from IRS, 1 wanting an audit of my 2003 tax returns, which I thought the limit ... A: Johnny, Thanks for your question. The statute of limitations is three years from the date the ...
home equity loan and capital gains	9/27/2009
Q: I built a home in 2008, lived in it till sept 2009, i only owe 83,000 on the home. I am ... A: Bryce, Thanks for your question. What you owe on the house does not affect your gain or loss. ...
gift tax	9/26/2009
Q: If I gift 35,000 dollars to a family member; what percent tax will I pay? A: Linda, Probably zero. There is a $13,000 per person annual exclusion, meaning you can give gifts ...
Texas resident and NM State Taxes	9/26/2009
Q: In 2006 I was a Texas resident and had been so for 30 years. My mother passed away and I went to New ... A: Jon, Thanks for your question. First, the canceled debt is not "non income." You borrowed money ...
self employment	9/26/2009
Q: I am self employed running a daycare out of my home. My daughter would like to do daycare but lives ... A: The self-employment rate is 15.3%. However, because the tax is paid on the "net" after the SE tax ...
foreign income tax exclusion	9/25/2009
Q: I am currently a government contractor overseas. I started my contract in Oct. 2008 and it will ... A: Randy, Thanks for your question. Sometime in late August or early September, depending on the ...
Residence in one state and work in another state	9/25/2009
Q: "We have a couple of employees whose residence is Texas and work in Toledo OH. Our company that ... A: You are welcome. After I sent the reply, a though occurred to me. You seem to indicate that their ...
Donation of Rental Space	9/25/2009
Q: I read an answer you gave to this question a few years ago. Where you said that a donation of ... A: Craig, Thanks for your question. You are correct, that law has not changed. You suggestion would ...
Non-payment of Federal Income Tax	9/25/2009
Q: My husband is self-employed. He has filed each year but has not paid taxes for the last ten years. ... A: Debra, Since he has not paid the tax, he can be charged with criminal tax evasion, which would ...
Bankruptcy & 1099	9/24/2009
Q: Submitting a new question, since a follow-up wouldn't allow me. It's confusing b/c I'm getting ... A: The due date for the 1099 and the date of cancellation of debt are two different events. If the ...
Possible 1099 after short sale - what will I owe?	9/24/2009
Q: I have a property that I owe $995K on currently and am working with a person who will buy this for ... A: If you are insolvent just prior to the cancellation, you can exclude the canceled debt up to the ...
Bankruptcy & 1099	9/24/2009
Q: Please help!! My father's home foreclosed on 9/8/09. His BK attorney also recently filed the ... A: If it was a non-recourse loan, it would be canceled with the sale of the house. Otherwise, he is ...
Bankruptcy & 1099	9/24/2009
Q: Please help!! My father's home foreclosed on 9/8/09. His BK attorney also recently filed the ... A: Keira, Thanks for your question. If the loans were canceled prior to the bankruptcy filing, they ...
Independent Contractor Expenses	9/24/2009
Q: I'm totally frustrated and upset right now. I am an independent Landman in the oil and gas industry. ... A: The IRS rules state that if assignments is of indefinite length or lasts more than a year. Yours ...
Independent Contractor Expenses	9/24/2009
Q: I'm totally frustrated and upset right now. I am an independent Landman in the oil and gas industry. ... A: Wade, Thanks for your question. The position of the IRS is that if an assignment is for an ...
Church gifts to volunteers...taxable?	9/23/2009
Q: Our Pastor would like to occassionally give monetary gifts to some of his volunteer members to show ... A: If they are gifts or reimbursements, a 1099 is not required, as it is not taxable income to the ...
Church Business	9/23/2009
Q: If I rent a classroom in a church ($80/month) to teach a class to all people, is it possible for me ... A: Tasya, Thanks for your question. Your collecting lesson fees has no impact on the church. The ...
SRS Provider	9/23/2009
Q: I have been babysitting for my Sister's Kids and SRS has been paying me. Now I want to know how much ... A: Casandra, I presume you will be receiving a 1099 and not a W-2. If that is all your income, you ...
deed in lieu of foreclosure	9/23/2009
Q: I purchased a rental property for $130,000 in 2003. I refinanced this property in 2005 and I owe the ... A: Dalmy, Thanks for your question. You don't have to show it on Form 982, just indicate that you ...
casualty	9/22/2009
Q: $70,000 in property damage to a vessell(not residental) from a hurricane. Received $40,000 insurance ... A: Mark, Thanks for your question. The casualty loss is $30,000. The reason is that you did not pay ...
Federal tax law	9/22/2009
Q: I recently found out by mistake that I have little to no Federal tax being withheld from my ... A: Dawn, Thanks for your question. This was a part of the President's stimulus plan. A married ...
Tax Compliance Personally Owned Company Vehicles	9/22/2009
Q: We have initiated a new company vehicle plan for employees to purchase their company vehicle. The ... A: Yes, that is the rule on a non-accountable plan. Any expense allowance paid is fully taxable. In ...
Tax Compliance Personally Owned Company Vehicles	9/22/2009
Q: We have initiated a new company vehicle plan for employees to purchase their company vehicle. The ... A: Patti, Thanks for your question. Since you are using a non-accountable plan, the entire amount of ...
1099 for inherrited property	9/21/2009
Q: John, I am trying to help out my aunt. When my grandmother died in 1969 she left property valued at ... A: Deborah, Thanks for your question. I can't give you a firm answer since you did not include a ...
Forgiven Debt on Short Sale	9/21/2009
Q: We purchased our home in 1995 for $165,500 with a conventional mortgage of $134,800. In the 11 ... A: Bob, Thanks for your question. Probably not. Since you refinanced and took cash and since the ...
Pre school tax forms	9/21/2009
Q: I just started a new job 2 weeks ago at a church preschool. I am a teachers aid. I work Tues. Thurs ... A: Tanya, Thanks for your question. From your description you seem to be a W-2 employee. You can ask ...
income tax on estate annuity	9/21/2009
Q: My husband(age 80) died 2/6/09 leaving a IRA rollover annuity payable to estate of which I am sole ... A: Generally speaking, a transfer of the IRA to an Estate cannot be rolled over unless it is a direct ...
divorced 7 yrs, former residence occupied by exhusband finally sold...	9/21/2009
Q: and i am to receive 1/2 of the proceeds from the sale... the value of the purchased property is ... A: Darla, Thanks for your question. Assuming the house is sold for less than the original purchase ...
income tax on estate annuity	9/21/2009
Q: My husband(age 80) died 2/6/09 leaving a IRA rollover annuity payable to estate of which I am sole ... A: Rose, Thanks for your question. Since it is inherited from a spouse you may roll it over with no ...
overseas tax	9/20/2009
Q: i am currently employed overseas and have been since april 1 2009 if i were to leave earlier than ... A: George, The only loophole is if all Americans in the area are recalled due to war or civil unrest, ...
1099-A in K-1 or 1040	9/20/2009
Q: I have a Husband and Wife LLC for renting the two houses they own. The income and expenses for the ... A: Purvi, Thanks for your question. Since it is owned by the LLC, it gets reported on the 1065. ...
gas lease signing bonus	9/19/2009
Q: Our signing bonus will be 377,550 plus our retirement income of 36,000 mostly untaxed. We can split ... A: Rich, Thanks for your question. Taking over two years would result a significant tax savings. If ...
Reimbersing Pastor	9/19/2009
Q: I am a Pastor of a Church. We have been under the same Church By-Laws for 9 full years. Recently ... A: The payments would not be taxable if you submitted receipts or evidence of payment of the premiums. ...
Reimbersing Pastor	9/19/2009
Q: I am a Pastor of a Church. We have been under the same Church By-Laws for 9 full years. Recently ... A: Michael, Thanks for your question. It can be legal, if it is handled in the proper manner. It ...
Being a dependent, and claiming a baby	9/19/2009
Q: I am 18 years old, just out of high school. I live on my own, pay my own bills, and have since July ... A: Sophie, Thanks for your question. Assuming you finished high school in May or later, your father ...
LLC vs S Corp	9/18/2009
Q: Sir, I have just signed a contract to be an Independent Contractor. The pay is $200,000 a year, I ... A: Keith, An LLC is not recognized by the IRS as a separate type of entity. They are taxed as sole ...
Non-employee compensation	9/18/2009
Q: I just received a notice from the IRS that I owe $1100 for non-employee compensation received ... A: Melissa, Thanks for your question. You report the income and any expenses on Schedule C. Include ...
Dependant Care FSA	9/18/2009
Q: I put $1000 into a dependant care FSA for this year. When I went to put in a claim, I realized ... A: Matt, Thanks for your question. There is no provision in the law to get the money refunded. It ...
IRS 3520	9/18/2009
Q: In Jan 2009, I received an estate distribution of the proceeds from a United States Bank account ... A: Noah, There are no taxes associated with Form 3520. It is used only to report the receipt of gifts ...
ira disbursements from a trust	9/18/2009
Q: My Dad ,who lived in Florida, died in April and I am the executor of my Dad's estate. His ... A: John, Thanks for your question. I need to clear up a few misconceptions. First, unless the trust ...
Personal Michigan State Tax	9/18/2009
Q: I am a retiree from Chrysler. My family and I live in Shelby Township, Michigan. Our sole income is ... A: Nandu, Thanks for your question. Yes. As a resident of MI, you are subject to tax on all your ...
Question about taxes...	9/17/2009
Q: I am currently a New York City resident and work in NYC as well. I am considering moving to ... A: Jeremiah, Thanks for your question. Working in NY will subject you to NY state income tax as a non ...
SE tax on income reported in Box 3 Form 1099	9/17/2009
Q: I have a client who works for a local auto dealership. He receives a base pay plus commissions based ... A: Brenda, Thanks for your question. I most certainly is subject to self-employment tax. Why box 3 ...
Proper tax filing	9/17/2009
Q: I am President of a local baseball league that started in December 2005 as an unincorporated ... A: That is a sticky issue. You will need to get the organizers/directors/officers of your organization ...
Claiming Losses in Traditional IRA	9/17/2009
Q: Mike, I will be 59 1/2 in two months. I have a Traditional IRA that has a base of $8,900 and has a ... A: Lynn, Mike couldn't answer your question, but I can give you an answer. Unfortunately, it is one ...
Untaxed income from internet job	9/16/2009
Q: I'm a Michigan resident, and my employer is a non-profit stationed in Tennessee. My work is ... A: Tiffany, Thanks for your question. You will need to file a Schedule C as a part of your Federal ...
obtaining a car as a gift from a friend	9/16/2009
Q: Stancil, A friend of ours in New Jersey was selling us a 2000 Toyota camry for our daughter for ... A: Erica, Thanks for your question. You would not have any income tax liability as gifts are not ...
State and federal tax	9/16/2009
Q: This year my wife and I will receive a signing bonus for a lease for natural gas exploration. The ... A: Rich, Thanks for your question. There is no limit to the amount that may be contributed to a 529 ...
Unmarried	9/16/2009
Q: My fiance and I are buying our first home together. From everything that I've read, I believe we ... A: Jason, Thanks for your question. You can divide the credit however you wish as long as you do not ...
HEALTH INSURANCE DEDUCTION BY C CORP	9/16/2009
Q: I have a C corp. I have provided a group insurance policy for my employees for a number of years. I ... A: Robert, Thanks for your question. It can be done. However, it you must do it strictly on a ...
tax question	9/16/2009
Q: My boyfriend and i moved in together in May 2008. We are living in NJ. My boyfriend has not filed ... A: Danya, Thanks for your question. Residency is determined by a number of factors - where you go ...
taxable income	9/16/2009
Q: If my brother and sister each deposit several thousand dollars in my bank account do I have to ... A: Tom, Thanks for your question. Gifts are not considered taxable income, so you don't have to ...
Gifting home to child	9/16/2009
Q: My mother-in-law owns a home in MN valued at $490,000 that has a fully satisfied mortgage. She ... A: Joel, Thanks for your question. The $13,000 is an annual exclusion, it does not carry over if not ...
investment lost in s Ponzi Scheme	9/15/2009
Q: I invested 2000.00 in a ponzi scam that was seized by the SEC in colorado, the judge rule that the ... A: Angelica, Thanks for your question. Yes, that is a deductible amount on your return. If ...
home owner tax breaks	9/15/2009
Q: I am currently looking to buy my first home and take advantage of the 8000$ first time home owners ... A: Heidi, Thanks for your question. In most cases filing separately will result in a higher tax ...
Depreciation on rental property	9/15/2009
Q: My husband and I are normally in a low tax bracket (15%) when we do our income tax. I have been ... A: Linda, Thanks for your question. You should take depreciation regardless. The IRS will reduce ...
limited partnership draw reduction of equity	9/14/2009
Q: I use a draw to access my equity - does this reduction of my equity reduce my stock value or my % of ... A: Ed, Thanks for your question. It reduces the value of your investment in the company. Unless you ...
Unpaid Invoices as Deduction	9/14/2009
Q: I am the sole proprietor of an engineering and consulting business, and I wanted to know if/how I ... A: Andrew, Thanks for your question. You can deduct the unpaid invoices and forgiven payments ONLY if ...
taxes on a home sale	9/14/2009
Q: Mother-In-Law passes away in Dec. 2007. The home she was residing in had an assessed value at that ... A: Bob, Thanks for your question. Frankly you got bad advice from the attorney. He did not consider ...
sole proprietor sale	9/14/2009
Q: I am selling my office/coffee service business. The sale price is 250K. They want to pay me 100K ... A: No, I am saying that if your coffee machines book value is $150K and you sell them for $150K you ...
sole proprietor sale	9/14/2009
Q: I am selling my office/coffee service business. The sale price is 250K. They want to pay me 100K ... A: Bob, Thanks for your question. It depends on your overall tax status and the reliability of the ...
Non-profit Church Preschool	9/14/2009
Q: We have a non-profit preschool and after-school childcare at our church. It is organized as a ... A: Mike, Thanks for your question. Since the preschool and childcare are a part of the church, there ...
LLC Single-Member Estimated Taxes	9/14/2009
Q: I recently formed a Single-Member LLC under which I am doing contract software engineer work for ... A: Lloyd, Thanks for your question. You have an LLC, which is not a corporation, so the law regarding ...
Lawsuit settlement proceeds and estimated taxes	9/13/2009
Q: Are estimated taxes due upon recieving unwithheld money due to other income? The other income is ... A: Pat, Thanks for your question. Estimated taxes are due the 15th of April, June, September, and ...
Main home exemption for section 1031 home	9/13/2009
Q: My husband and I purchased a home about 6 years ago in a like-kind exchange (1031) and used it as a ... A: Linda, Thanks for your question. Under current rules, an exclusion is allowed if it has been five ...
Gifting money	9/13/2009
Q: My mom hypothetically gives her 3 sons 10K each for Christmas and we spend it. 2 yrs later she has ... A: Wayne, I noticed your question in the pool of questions that someone couldn't or did not want to ...
Inheritance	9/13/2009
Q: My father died recently and I am the executor of his estate (although I have no experience in this ... A: Gail, Thanks for your question. The life insurance proceeds are not taxable. However, if left ...
Can training be taken as a tax deduction?	9/12/2009
Q: I was recently laid off and decided to change careers. I signed up for a CDL driving school and ... A: Josh, Thanks for your question. No, that type of training is not a deductible item, as it ...
S Corporation K-1 with oridnary business income	9/12/2009
Q: The world needs more people like yourself... I own 9% of an S Corporation in California. There is ... A: Chris, Thanks for your question. Unfortunately, with an S Corp, you pay tax on your share of the ...
Gains on sale of home	9/12/2009
Q: Currently a resident of MA. Am retiring and moving to FL but keeping my MA house as a summer home. ... A: Bob, Assuming that when you sell it you do not qualify for the exclusion from the sale of your main ...
inheritance	9/12/2009
Q: I live in Tennessee and will be receiving an inheritance of: 1. Life insurance benefit: less than ... A: Tim, You will receive a 1099-R from the IRA trustee at the end of the year, indicating the amount ...
inheritance	9/12/2009
Q: I live in Tennessee and will be receiving an inheritance of: 1. Life insurance benefit: less than ... A: Tim, Thanks for your question. The only tax you need to be concerned with is, as you mention, ...
8,000 Tax Credit	9/11/2009
Q: John, My husband and I are first time home buyers. We are considering buying a duplex. I was ... A: Alisha, Thanks for your question. You would qualify, but the amount of the credit would be based ...
Taxes on Trust Distribution of Stocks	9/11/2009
Q: I am the Trustee of a (now) irrevocable Trust with a large stock portfolio ($600k or so, depending ... A: John, Thanks for your question. It would most likely be beneficial if the proceeds were passed to ...
overseas taxes	9/11/2009
Q: I have previously wrote you a question regarding overseas income taxes. I thought you had answered ... A: Morgan, Thanks for your question. Since you would not meet the physical presence test or the bona ...
Gift Car to Pastor Part II	9/10/2009
Q: I'm back. It turns out our state just recently changed its laws so that a car given to anyone not ... A: The gift splitting form is the Gift Tax Return, Form 709. Gift splitting is only on your end, so ...
Taxes on Estate	9/10/2009
Q: My uncle recently died at age 88. He was a 100% disabled WWII American veteran who received ... A: MD, Thanks for your question. Frequently, annuities grow without paying tax on the gains. As a ...
gift of equity	9/10/2009
Q: My in-laws want to sell me and my wife their house for 100,000 dollars. The house is valued at ... A: Mike, Thanks for your question. For the most part it is a non-tax issue. Since they are giving you ...
renting church space	9/10/2009
Q: If our church is renting out our school classrooms to a for profit preschool, do we have to pay ... A: Chris, Thanks for your question. You do not have to pay tax on the rental income if substantially ...
Form 8332 and claiming a child	9/9/2009
Q: I signed Form 8332 so that my ex-husband could claim our child, which he did in the 2008 tax year. I ... A: Nancy, Thanks for your question. Technically, that is correct. When your ex releases the right to ...
Caregiver tax	9/9/2009
Q: My mother-in-law was in an auto accident and her doctor has determined she needs caregiver ... A: Micheal, Under the circumstances, she is considered self-employed and the operator of a business. ...
Lump Sum Occupational Insurace Settlement Offer	9/9/2009
Q: Greetings John - I hope this email finds you well. Quick question as I'm sure you've had many ... A: Violet, Thanks for your question. If the lump sum is being paid as compensation for injuries, it ...
older W2 forms	9/9/2009
Q: I would like to know how and where to get W2 forms the forms you mail with your taxes A: Dan, I presume you mean blank forms. Copies may be ordered from the IRS, or from about any office ...
Getting Married and becoming an Oregoonian	9/8/2009
Q: I am getting married and moving to Oregon on October 10th. My fiance bought a house in June and ... A: Katie, Thanks for your question. You will file a a part-year resident of Oregon, filing in your ...
Volunteer vs. Employee vs. Family Members	9/8/2009
Q: I have another question regarding volunteers and employees of a church. There are a couple of ... A: Adam, Thanks for your question. 1. No, he is merely being reimbursed for expenses incurred on ...
Designated Donations	9/8/2009
Q: We're a relatively new church that recently sent out our first mission team. Unfortunately, many ... A: Adam, Thanks for your question and your kind words. You are absolutely correct regarding undue ...
Contractor Tax Exemption	9/8/2009
Q: I have seen a recent post you answered about a contractor in Iraq who wanted to leave early and ... A: Jon, Thanks for your question. You do not qualify for the waiver unless Iraq is one of the ...
IRA contributions	9/7/2009
Q: I am concerned that I have been making IRA contributions for the past several years but my income ... A: Martha, Thanks for your question. Forgive the blank answer you just got, I am having some internet ...
disability and claiming children	9/7/2009
Q: Can you file a tax return if you get disability? Also, what is the cutoff age to file with children ... A: Barbara, Thanks for your question. Getting disability payments does not affect your requirement ...
Inheritence	9/7/2009
Q: My mother recently passed away leaving a will. I am her only child. She left me everything. There is ... A: Alastair, Thanks for your question. California does not have an inheritance tax, so you are clear ...
resident alien green card holder taxation	9/6/2009
Q: McCONNAUGHY I am a US citizen and my wife is a green card holder and has resided in the U.S.for 40 ... A: Tom, Mr. McConnaughy could not answer your question, but I think I can give you an answer. Her ...
Per Diem: taxable vs. non-taxable	9/5/2009
Q: Mr. Stencil, I have a concern regarding per diem for a situation I haven't seen addressed yet in ... A: JJ, Thanks for your question. You are not going to like my answer. Your per diem from day one is ...
Annuity Beneficiary and taxes	9/5/2009
Q: My grandfather recently died leaving two annuities to my father, two sisters and myself. The value ... A: Stephanie, Thanks for your question. It can vary depending on the annuity. However you state that ...
How do internet mlm businesses get around sending 1099 misc formes	9/5/2009
Q: I have looked at alot of mlm companies online and see that the majority of them don't need any ... A: William, Thanks for your question. In cases where there is a product being sold, rather than ...
Trust Distribution	9/4/2009
Q: My Husband sold his deceased sister's house (in CA)which was part of her living trust and it was a ... A: Theresa, Thanks for your question. The gain is subject to tax at the capital gain rate. Normally, ...
Giving a car to a pastor	9/4/2009
Q: Just saw your answer to someone else that the church giving a car to an employee/pastor counts as ... A: The annual gift exclusion has been raised to $13,000. It was $11,000 in 2005. If the church owned ...
2009 Lifetime Learning Credit	9/4/2009
Q: My daughter is attending a University located in the Midwestern disaster area and in 2008 the IRS ... A: Dennis, Thanks for your question. The additional credit is allowed, but under the 2008 rules. ...
Annuity Advisory Fee	9/4/2009
Q: Stancil, I have a nonqualified variable annuity. An outside investment advisor makes investment ... A: Dave, Thanks for your question. It is not treated as a distribution subject to the 10% penalty. ...
Giving a car to a pastor	9/4/2009
Q: Just saw your answer to someone else that the church giving a car to an employee/pastor counts as ... A: Deb, Thanks for your question. You can go two ways on this - you can get a tax benefit and he gets ...
trust fund tax	9/4/2009
Q: My wife is a beneficiary of a trust fund that dissolved this year. All assets were liquidated and ... A: Paul, Thanks for your question. She will be taxed on the income from the trust which may include ...
Bank Stock and Merger and Gains	9/3/2009
Q: I appreciate your time. Related to the Wachovia(WB)/Wells Fargo(WFC) merger, I owned 200 shares WB ... A: Dave, Thanks for your question. Your holding period began with the purchase of the original ...
claiming baby	9/3/2009
Q: my baby is due Nov 1,2009.Im curious to know can i claim her when i file my taxes in 2010 and if so ... A: Daniele, Thanks for your question. If she is born before 12/31, you can take a dependency ...
work injury	9/3/2009
Q: At my place of employment a company had come out to repair what is similar to a safe door. They did ... A: Gena, I presume you mean would any judgment received as a result of the lawsuit be taxable. If the ...
Minimizing of IRA and 401K withdrawal penalties?	9/2/2009
Q: Got laid off early this year, and circumstances have necessitated that I access my retirement ... A: The 10% is withholding, just like from your paycheck, show it on your 1040 when you file, along with ...
Not filled 1040 forms by a non-resident US citizen	9/2/2009
Q: I am a US citizen but I have never lived in USA. I am working in Turkey with annual income around ... A: Goktug, Thanks for your question. As a U. S. citizen you are subject to income tax on your ...
401K disbursment	9/2/2009
Q: Is the disbursment from my 401k to my ex wife tax deductable? A: Robert, Thanks for your question. No, it is not tax deductible. If the distribution is made as a ...
Spouse LLC for Rental Realestate	9/2/2009
Q: I want to know if an LLC owned 50% by me and 50% by my husband used for the purpose of renting ... A: Susan, Thanks for your question. Since the LLC is wholly owned by a husband-wife team, it is known ...
Minimizing of IRA and 401K withdrawal penalties?	9/2/2009
Q: Got laid off early this year, and circumstances have necessitated that I access my retirement ... A: Quest, Thanks for your question. There are no hardship withdrawals from qualified retirement ...
Mileage from job to job	9/2/2009
Q: I have a part time job and someone told me that I can file my mileage that I travel from my full ... A: Chris, Thanks for your question. If you go from your first job to the second job, that mileage is ...
rental property	9/2/2009
Q: What percent of a calendar year does a property have to be available for rental in order to qualify ... A: Dennis, If a property is rented for more than 14 days during the year, income must be reported and ...
trust valuation and distribution	9/1/2009
Q: I have inherited 98% of a trust from my mother. Some inheritance tax is due to the state of Oregon, ... A: Wayne, When a person dies, the property owned by the decedent normally passes to the heirs at the ...
profitability requirement	9/1/2009
Q: we are in our 2nd year of our photo business. we sell at art/wine festivals. our 1st year taxes we ... A: Jeannette, No, you are not out of business. First of all, the requirement is to show a profit for ...
1099 vs. W-2	8/31/2009
Q: I am running a preschool for my mother in law. We have always set the teachers up as W-2 employees. ... A: Jerry, Thanks for your question. No, the teachers would not be classified as independent ...
disability tax withholdings	8/31/2009
Q: I just started receiving a social security disability check in June, 2009. How can I tell if there ... A: Christie, You should have gotten a determination letter from the Social Security Administration, ...
Carryover Loss	8/31/2009
Q: I have been having a problem with the IRS about a capital gains distribution that I inadvertently ... A: That does mean a new physical amended return as the first option. The signed statement might be ...
Tax Liability On Foreign Inheritance	8/30/2009
Q: I have viewed some of the other answers to questions about this subject, but they all seem to deal ... A: Joel, Thanks for your question. It is not reported on your income tax return. Depending on your ...
tuition credit	8/30/2009
Q: I am a dependent student being claimed on my parents 2009 tax return. (I do not have any income) I ... A: Israel, Thanks for your question. Since the Pell Grant was not used for qualified education ...
Where to pay state taxes??	8/30/2009
Q: I and my 20 year old (dependent) daughter have lived in Maryland all our lives. My daughter is a ... A: David, Thanks for your question. Since the money was earned in DE she will need to file a return ...
Trust dissolution	8/30/2009
Q: We are terminating a trust that was set up at my Mother's death in 2007. The trust owns vacant land ... A: Susan, Thanks for your question. Since you elected the alternative valuation date, that is the ...
Fligth attendant and pilot tax deductions	8/30/2009
Q: I got audited for the taxes filed in 2007. But the person that audited me says that I can not deduct ... A: Hugo, Thanks for your question. Those items you mention are not deductible. They are considered ...
family trust	8/30/2009
Q: How much do I get taxed on trust cash inheritance, or is there an amount that gets a tax break? A: Tim, Thanks for your question. Inheritances are not subject to income tax. However, if the ...
Depreciating Improvements for Home Business	8/29/2009
Q: Stancil, I have made many new permanent improvements to my home. My home has also housed a ... A: Burnie, Thanks for your question. The only improvements that are deductible are those related to ...
1099-PATR	8/29/2009
Q: My brother bought land in Texas through Louisiana Land Bank. They issed a statement showing interest ... A: Kevin, Thanks for your question. Since you don't have a business or a farm, enter the amount of ...
Problem with IRA contribution	8/29/2009
Q: I am retired and had no earned income for 2008 but my spouse had. Therefore, in the beginning of ... A: Perhaps withdrawal is the wrong term in this case. The transaction would have to be undone. ...
Problem with IRA contribution	8/29/2009
Q: I am retired and had no earned income for 2008 but my spouse had. Therefore, in the beginning of ... A: Vlad, Thanks for your question. It is characterized as an excess contribution, since you ...
Foreign income tax exemption	8/29/2009
Q: I work in Iraq. If I take a vacation in St. John (USVI), will this count for or against my 330 days ... A: Tim, Thanks for your question. The US Virgin Islands, along with other U. S. territories is ...
Sale of rental property in another state.	8/28/2009
Q: Taxpayer and spouse have lived abroad for many years working for Department of Defense. Their ... A: Mark, Thanks for your question. Sorry, but they owe taxes in HI on the gain. As a resident of the ...
K-1 losses and regular 1099 losses	8/28/2009
Q: I invested in an offshore hedge fund, that unfortunately cratered with the market in 2008. It is ... A: Matt, Thanks for your question. The K-1 losses can be used to offset the Schwab gains only to the ...
Tax implications for overseas money gift to buy a house	8/28/2009
Q: My mom, who lives overseas and is neither a US citizen nor a resident, wants to wire around $50K to ... A: Mohammad, You will not have any tax liability from the gift. However, you must file Form 3520 to ...
IRS Physical Presence Requirement	8/28/2009
Q: I started working overseas on 9/23/08. I am currently in the same position. I filed a 6-month ... A: Angela, Thanks for your question. You qualify for the foreign earned income exemption by being ...
Social Security and S-Corp	8/28/2009
Q: I am considering retiring at 64. I own 50% interest in an S-Corp. I have been receiving a ... A: Mollie, Thanks for your question. The non-salary portion of what you receive from the corporation ...
taxes	8/28/2009
Q: My husband is 100% disabled. Is there a tax exemption other than property tax in the state of ... A: Michelle, Thanks for your question. On the federal level, there is no type of exemption for ...
overseas tax exemption	8/27/2009
Q: After the first 87,000+, I would be paying taxes in my income overseas. Does the tax rate differ ... A: Donald, First, the exemption for 2009 is $91,400. The rate table is the same, however there is the ...
sale of rental property	8/27/2009
Q: My husband and I divorced in February and sold joint rental property in July. The proceeds from the ... A: Cheryl, Thanks for your question. Your 1099 will be for the sales price of the house. Each you ...
Taxes on Commission Checks	8/26/2009
Q: I'm a salary paid employee but also get commission. My commission checks are taxed at a much higher ... A: Maria, Thanks for your question. No, since the commission checks are not included with your ...
Amended Filing Status	8/25/2009
Q: My wife and I divorced several years ago, although shortly after the divorce we decided to stay ... A: Eric, Thanks for your question. By filing jointly when you were not married, you filed a ...
Change to Depreciation Basis	8/25/2009
Q: I have a piece of business equipment that was purchased with a bank loan, and the equipment is the ... A: John, Thanks for your tax question. Calculate the depreciation based on the new basis and the ...
Unclaimed income for Social Security	8/25/2009
Q: I work as an auditor for a chain of cash advance stores. We have trouble collecting from Social ... A: Kathrin, Thanks for your question. You can complete a 1099-C cancellation of debt form. They will ...
Depreciation and Rental Property	8/25/2009
Q: Mr. Stancil, Thank you for your service. I am about to start renting out a home I have been ... A: Mike, Thanks for your question. Yes, you must depreciate the house while it is a rental. If you ...
S-Corp medical and life insurance	8/25/2009
Q: As a greater than a 2% owner of an S-Corp, medical insurance premiums must go through payroll ... A: The medical insurance is fully taxable to the >2% owner. It should go through payroll since it must ...
S-Corp medical and life insurance	8/25/2009
Q: As a greater than a 2% owner of an S-Corp, medical insurance premiums must go through payroll ... A: Jeff, Thanks for your question. That's really not the issue as a more than 2% owner of an S ...
Dependent child college tuition/expenses	8/25/2009
Q: How do I get a list of what I can deduct as far as college expense's(besides tuition)go? Example the ... A: Brad, What is deductible or eligible for a credit varies. Generally, qualified education expenses ...
Cash gifts	8/24/2009
Q: I'm preparing to buy my first house and a friend wants to give me a cash gift of about 65,000. All ... A: Don, First, you should understand that gifts are not taxable income, regardless of the amount. The ...
s corp and state taxes	8/24/2009
Q: i am starting a s corp in florida where there is no state taxes. i will be working for as a ... A: Robert, Thanks for your question. You will owe NJ taxes as that is where the money is being ...
Personal Miles w/ car allowance	8/24/2009
Q: We are a public company with locations in IL and MN. We give our outside salespeople $600.00 per ... A: Michelle, There are two ways to handle mileage reimbursements. The plan you have is known as a ...
Taxes on Retirement Plan Death Benefit	8/24/2009
Q: My uncle passed away and left behind two accounts totaling $125,000. I've done the paperwork to ... A: Erika, If you are going to share the proceeds with your brother, you should have the distribution ...
overseas contracting tax	8/24/2009
Q: If you go home on an emergency red cross message does that effect your tax exemption and if so, how? A: Dustin, Thanks for your question. It could affect you. In order to meet the physical presence ...
Foreclosure of Non-Owner Occupied	8/24/2009
Q: Home that was bought as a personal residence, but never lived in due to divorce & moving out of ... A: Camilla, Since the home was not your principal residence you do not qualify for any exclusion of ...
Irrevocable Life Estate	8/23/2009
Q: We live in Pennsylvania. My sisters live in NY. My mother set up an Irrevocable Life Estate Trust ... A: Janice, Thanks for your question. You will owe federal income tax, at capital gain rates on the ...
annuity distribution to the surviving spouse	8/23/2009
Q: My husband passed away in 2007. He had annuity since 2003. I was the beneficiary on it. In summer of ... A: Inga, Thanks for your question. You didn't go wrong on the paperwork. Normally, a withdrawal from ...
1099 guest speaker	8/23/2009
Q: I am the treasurer of a very small church with less than 20 members. Recently we have had guest ... A: Arlene, Thanks for your question. You only have to issue a 1099 when a person receives $600 or ...
outside office rental	8/22/2009
Q: I work for a company that requires me to telecommute for the convenience of the company. If I decide ... A: Jennifer, Thanks for your question. Yes, that would be deductible, as it is for the convenience of ...
overseas contract	8/22/2009
Q: I was told by a co-worker that there is a way not to pay taxes on money earned while overseas if the ... A: Morgan, Thanks for your question. First, it is not a total exclusion. You can exclude up to ...
Are Real Estate Courses Deductible	8/22/2009
Q: I accepted an early retirement earlier this year and decided that I wanted to get my Real Estate ... A: Brad, Thanks for your question. The real estate courses qualify you for a new career or ...
1099 C	8/22/2009
Q: Due to a shortsale on a rental property, which was my primary residence for two years in the past ... A: Joe, Thanks for your question. Unfortunately not. Debt forgiveness and the exclusion of gain on ...
Golf Club Equity Membership	8/22/2009
Q: I paid $45,000 for an equity membership in a country club in 2001. I left the club in 2004 and this ... A: Robert, Thanks for your question. The loss is not deductible, the return of equity does not appear ...
now want to use a dormant LLC	8/22/2009
Q: I filed an LLC 4 years ago. I didn't know what i was doing and co-mingled some funds the first ... A: Kevin, Thanks for your question. If you filed the LLC as a sole proprietorship on Schedule C, you ...
Are we able to avoid taxes on a Short Sale	8/22/2009
Q: I am 1 of 3 partners who own a property in Florida which is currently in a Short Sale proceeding ... A: Ron, Thanks for your question. The taxes would be at your marginal rates, which could vary between ...
401K early withdrawal penatly and taxes	8/21/2009
Q: Good Morning, I am faced with a situation that requires me to have my 401K paid out early. I am ... A: John, Thanks for your question. Normally, 20% is withheld from such withdrawals. This amount will ...
Taxation of rental property income	8/20/2009
Q: I am interested in purchasing property in NV (Las Vegas) but I work and reside in MD. The property ... A: Michelle, Thanks for your question. As a MD resident, you are subject to tax on all your income so ...
Foreign work	8/20/2009
Q: i have been in Iraq since 2/21/2009 through 2/21/2010 - i have heard that i would qualify for ... A: Art, Thanks for your question. If you a physically present in a foreign country for 330 days in a ...
8000 tax credit & buying from soon-to-be inlaws	8/20/2009
Q: I'm looking to be the sole-buyer on a house my fiance lives in, owned by his parents. I recently ... A: Amber, Thanks for your question. I can't answer the first part about the gift of equity letter. ...
Paying taxes on gifts for pastor	8/20/2009
Q: Our church honor our pastors during the month of October. Are they required to report all monies ... A: Tamber, If the money is given to the pastor by the church, it is taxable compensation to the ...
Afghanistan Contractor	8/20/2009
Q: To start with, I am a independent contractor paid on a 1099 working on a government contract in ... A: Chris, The only per diem that would be deductible is a per diem for housing paid you by your ...
Volunteering deductions	8/20/2009
Q: I volunteer for a local Non profit organization as a board member. what portion of this work is ... A: Rico, Thanks for your question. The only deduction you can take for this is any out of pocket ...
New house taxes	8/20/2009
Q: When a new house is built, is the assessor's office automatically notified to assess taxes, or how ... A: Shelley, State and local laws vary so I can't give you a definitive answer. However, in most ...
What Taxation to Elect for a new LLC	8/20/2009
Q: Myself and three other individuals are in the process of forming a new LLC to purchase a rental ... A: Adam, Thanks for your question. If you elect to be taxed as a partnership or an S-corp, all of the ...
inherited property and cash	8/20/2009
Q: 2 questions--My 2 brothers and I are inheriting some cash, some personal property and a house from ... A: Steve, Thanks for your question. Inheritances are not income, so you don't need to report them on ...
Afghanistan Contractor	8/20/2009
Q: To start with, I am a independent contractor paid on a 1099 working on a government contract in ... A: Chris, Thanks for your question. The deduction for one-half the self employment tax is taken on ...
1099	8/20/2009
Q: I am a mechanic in Michigan. I am paid on a flat rate basis per job. Would I be able to file ... A: Don, Thanks for your question. You don't file 1099. The person for whom you work would give you a ...
Estate Tax Return	8/19/2009
Q: My motehr passed away 1/09. The only assets were a condo that sold for $275,000 and a checking ... A: There was likely a gain or loss on the sale of the condo since I doubt it was sold for the FMV as of ...
capital gains	8/19/2009
Q: I have owned my business for 6 years, no real estate, I am in the 10% bracket, after sale, no ... A: Linda, Since you are in the 28% marginal bracket, all your capital gains would be taxed at the 15% ...
Estate Tax Return	8/19/2009
Q: My motehr passed away 1/09. The only assets were a condo that sold for $275,000 and a checking ... A: Joe, Thanks for your question. You can elect a tax year for the estate that ends not more than 12 ...
corpporation "C" gifts	8/19/2009
Q: Can a "C" corporation gift money to a child? If so, how much? I know both the corporation and ... A: Ellie, Thanks for your question. Corporations cannot make gifts such as you refer to, as this is ...
Contract for Deed with Underlying Mortgage	8/19/2009
Q: Situation: I am selling a condo using a contract for deed. I will be charging the buyer interest on ... A: Patrick, Thanks for your question. You report the interest income on Schedule B and the interest ...
overseas contractor tax laws	8/19/2009
Q: As a contractor i worked in Kuwait Oct-Dec 2008 then sent toIraq Jan and laid off 21 Feb 2009. I was ... A: Mary, Thanks for your question. The physical presence test requires that you be physically present ...
HOUSING FOR MINISTER	8/19/2009
Q: We provide a parsonage for our pastor, he asked for an outrageous amount for his allowance. Now he ... A: Kate, Thanks for your question. Under IRS regulations, any amount designated as housing allowance ...
Form 1041 or 1040	8/19/2009
Q: I'm filing the final tax form (2008) for my mom who died in December 2008. No income has been ... A: Brian, Thanks for your question. Any income received before her death should be reported on her ...
Tax Error	8/18/2009
Q: I'm a Washington State resident and my CPA made an error on my 2007 return causing an underpayment. ... A: Sally, Thanks for your question. Since you signed the return affirming that the information is ...
claiming a dependent	8/18/2009
Q: My daughter is 20 with a 1 year old she receives medicaid insurance for. Can i legally claim her ... A: Diana, In order to claim either one as a dependent, you must provide over half their support and ...
social security deductions from disability income	8/18/2009
Q: Are short and long term disability insurance payments subject to social security deductions, federal ... A: Jay, Thanks for you question. That depends. If you paid the cost of the premiums they are not ...
FL S-Corp tax	8/18/2009
Q: I had a FL corporation (only on paper) since 2004. Recently, I received the letters form IRS ... A: There is no form to request a waiver. Just attach a letter, explaining the situation and asking ...
FL S-Corp tax	8/17/2009
Q: I had a FL corporation (only on paper) since 2004. Recently, I received the letters form IRS ... A: Elena, Thanks for your question. A tax entity, other than individuals, must file annual returns ...
Deceased Grandmother's back taxes	8/17/2009
Q: My situation is my mother died in April 2007 and my grandmother died in Nov. 2007. My grandmother ... A: Cherry, Thanks for your question. Most likely, yes. Taxes for deceased individuals are to be paid ...
Inheritance tax	8/17/2009
Q: My mom is a German citizen, but has a green card and has lived here for 10 plus years. She just ... A: Jennifer, Thanks for your question. Inheritance taxes are strictly state taxes in the U. S., so ...
Forming a Club	8/17/2009
Q: We would like to form a yearbook club we take in money from our homeschool group and area businesses ... A: Sandy, Thanks for your question. If you want the businesses to get a charitable contribution ...
Tax treatment of cash settlement from former employer	8/17/2009
Q: Is a cash settlement from a former employer to settle a complaint treated as wages? In other words, ... A: Peggy, Thanks for your question. If the amount is related to compensation, it is treated as wages. ...
Civil Settlement	8/17/2009
Q: My tax question is: I paid $50,000 to a health insurance carrier pursuant to a Settlement Agreement ... A: Andrew, Thanks for your question. That would be a deductible as a business expense. Since it ...
LLC Member Taxes	8/17/2009
Q: This question will necessarily be long because I fail to completely grasp the current tax ... A: Mike, Thanks for your question. The passive losses retain their character. They pass through to ...
Gift of Home	8/17/2009
Q: About 5 years ago my mom signed over her home to myself and two siblings. It was worth about ... A: Lauri, Thanks for your question. That depends. If you do not live in the house as your main home, ...
schedule L	8/17/2009
Q: I am an Accounting student. My question is regarding Schedule L,M1 and M2. If I have an S ... A: Mario, Thanks for your question. As a student you should learn that it is a valuable asset for you ...
Oregon income taxes	8/17/2009
Q: We live in Portland. I am retiring at the end of the month. Our income will be pension and IRA ... A: Galen, Thanks for your question. Residency is based on a number of factors - driver's license, car ...
Selling a property tax and investment advice	8/17/2009
Q: I am in the process of selling a vacant land and have made good agreement with the seller for a ... A: If you sell on installments, the tax may be higher due to the imputed interest. If you sell and ...
Selling a property tax and investment advice	8/16/2009
Q: I am in the process of selling a vacant land and have made good agreement with the seller for a ... A: James, Thanks for your question. I can't address the ROI question, as I don't have enough ...
filing exempt on w4	8/16/2009
Q: I live in california and started work with a new company and turned in my w4 to the new company. I ... A: Tavare, Thanks for your question. No, the only way you can get that money refunded is when you ...
17 year old taxes	8/16/2009
Q: I am a 17 year old who is working in a restaurant. I work as a cashier, but I get tips from the tip ... A: Alicia, You do need to keep track of your tips even if you don't have enough to pay any income tax, ...
Airfare and hotel costs deductible for work?	8/16/2009
Q: I was hired 1-1/2 years ago as C.O.O. of a very small development company (an LLC) with the ... A: Mike, Thanks for your question. No. There is no legal way around this. As a matter of fact, your ...
Oregon tax liability	8/15/2009
Q: My husband and I moved out of Oregon in 2001. Since then we have maintained an address in Texas. ... A: Sharon, Thanks for your question. AZ is your primary residence and you will file a regular tax ...
Minister car allowance	8/15/2009
Q: If a minister receives a certain amount each month as a car allowance, and he keeps a mileage log, ... A: Priscilla, Thanks for your question. Sufficient for what? Since he is receiving an allowance, the ...
lottery	8/14/2009
Q: I won the lottery and i wanted to give some of my freind some money how much can i give them without ... A: Altamese, Thanks for your question. You will pay income tax on the entire amount of winnings. If ...
Independent Contractor being treated as an employee	8/14/2009
Q: My question is that when I started work as a massage therapist in a spa here in California a year ... A: Kim, Thanks for your question. I can't make that call without examining a number of additional ...
personal 1099 checks into business account?	8/14/2009
Q: I am in the process of opening a single owner pediatric therapy center. I have formed an LLC and ... A: Basically, its just a transfer. Your Schedule C would show the income and an expense item such as ...
personal 1099 checks into business account?	8/13/2009
Q: I am in the process of opening a single owner pediatric therapy center. I have formed an LLC and ... A: Alison, Thanks for your question. The problem is going to be that the 1099's will likely be with ...
consulting	8/13/2009
Q: Multi part tax question - traveling consultants Live in one state while traveling to another State ... A: James, Thanks for your question. You will be liable for state taxes in the state where you work, ...
A Q	8/13/2009
Q: I am American citizen working overseas in a foreign country at this time. I started working overseas ... A: Sam, Thanks for your question. The amount of the credit for 2009 is $91,400 The income tax ...
Individual tax law for expense reimbursement	8/13/2009
Q: I have an LLC of which me and my spouse are employees. We draw salaries from the LLC. In addition I ... A: Vkris, Thanks for your question. It would be taxed as ordinary earned income. Since the project ...
travel expenses	8/13/2009
Q: We live in MI and husband had to find work out of state. He has a 2 yr contract and will receive a ... A: AY, Thanks for your question. Since the assignment is for more than 12 months, he is considered to ...
Out of state expenses	8/13/2009
Q: I have a question about tax deductions. I am looking at taking a job in ND for a trucking company ... A: Tom, Thanks for your question. Nothing would be deductible, as the assignment is for more than 12 ...
Overseas Tax Exemption	8/12/2009
Q: I am a contractor in Kuwait. I told leave in the states 7 Dec 2008 to 31 January 2009. How long do ... A: Michelle, Thanks for your question. In order to be eligible for the foreign earned income ...
Benevolence Guidelines	8/12/2009
Q: A lot of people are facing various financial problems these days, such as not being able to buy ... A: MH, Thanks for your question. The IRS has no guidelines about the type of help that may be given. ...
overseas contractor	8/12/2009
Q: I am currently working overseas. Is there a time frame that I must stay overseas (i heard 330 days) ... A: Morgan, Thanks for your question. To qualify for the Foreign Earned Income Credit, you must be ...
PER DIEM DEDUCTIONS	8/12/2009
Q: I receive $35 a day per diem about 200 days out of the year. I was told that i can deduct the ... A: The fact that no taxes are withheld does not affect what we are discussing. The per diem rate for ...
Kiddie Tax	8/12/2009
Q: 13 year old with interest and dividend income of $4,500+. Income comes from a Special Needs Trust. ... A: Eldon, Thanks for your question. I do not have an authoritative answer for you, as everything I ...
Mom's inheritance	8/12/2009
Q: Do I have to pay taxes on the money I receive when I sell her house? A: Ray, Thanks for your question. You will have to pay tax on the gain. Your basis is the fair ...
1099 taxes	8/11/2009
Q: I recently started working as a contractor and I was told there was a way that I could pay my ... A: Dinah, Thanks for your question. Actually, it is required that you do so. The payments are due ...
Claiming Per-diem nor recieved	8/11/2009
Q: I travel to various jobs where I receive a different per diem at each site, usually 3 or 4 a year. ... A: You need to check with your company and see what they say, even though it is not broken out for you. ...
Claiming Per-diem nor recieved	8/11/2009
Q: I travel to various jobs where I receive a different per diem at each site, usually 3 or 4 a year. ... A: You must total up your lodging expenses and deduct any reimbursement for lodging. The excess you ...
Claiming Per-diem nor recieved	8/11/2009
Q: I travel to various jobs where I receive a different per diem at each site, usually 3 or 4 a year. ... A: George, Thanks for your question. There is no per diem amount allowed for deducting lodging, you ...
taxable percentage on annuity after death	8/11/2009
Q: Hopefully this will make sense and you can help me out. My dad passed away (and had a trust). I got ... A: Sandee, Thanks for your question. If you elect to have the trust pay the tax, about 95% of it will ...
Health insurance deduction	8/11/2009
Q: I will be a full-time grad student and receive basic health insurance through the university as part ... A: Jeff, Thanks for your question. If the university plan is a subsidized plan, you cannot deduct ...
Taxes on bonds	8/11/2009
Q: Recently i purchased a Muni Bond and paid accrued (prepaid interest of $244.44. The first coupon is ... A: Conner, First, I don't know what you are looking at but Schedule B of the 1040 does not have a box ...
Dependent Child Care	8/10/2009
Q: I have a few questions about the Dependent Child Care credit. My basic question is: what is the ... A: Alison, Thanks for your question. The law requires that the persons you pay report that income and ...
FTHB Tax Credit	8/10/2009
Q: I currently rent from my son. I haven't owned my own home in over 4 years. My son added my name to ... A: Jade, Thanks for your question. You have had an ownership interest in a primary residence during ...
1996 Back Taxes	8/10/2009
Q: My husband was married to someone else in 1996 in Dallas,Texas & I would like to know if she is ... A: Carolyn, Thanks for your question. If they filed a joint return in 1996, both spouses can be held ...
Business name & id #	8/10/2009
Q: If I sell my business (sole proprietorship) to my son, does he have to get a new business name and ... A: Les, Thanks for your question. Under IRS regulations and the IRS tax code, you do not sell a sole ...
Taxes on bonds	8/10/2009
Q: Recently i purchased a Muni Bond and paid accrued (prepaid interest of $244.44. The first coupon is ... A: Conner, Thanks for your question. You will show the accrued interest (and any other interest on ...
gift taxes	8/10/2009
Q: I wish to pay my daughter's student loans. She finished school some time ago. She has 3 different ... A: Bill, Thanks for your question. It will not trigger a gift tax, but you will need to file a gift ...
not-for-profit rental	8/10/2009
Q: If a house is being rented simply to hold the property, the rental activity loses money, and is ... A: Jon, Thanks for your question. If you are completing Schedule E, you must take depreciation. If ...
PER DIEM DEDUCTIONS	8/10/2009
Q: I receive $35 a day per diem about 200 days out of the year. I was told that i can deduct the ... A: Travis, I presume the per diem is for meals. If that is the case, you can deduct the difference in ...
tuition reimbursment	8/10/2009
Q: I am President and own shares in a privately "family" held C corporation. This corporation is doing ... A: Tim, Since they are not employees and it is a closely-held corporation, any tuition reimbursement ...
Taxaton of per diem	8/9/2009
Q: I've undertaken a type of employment that involves contract assignments throughout the United ... A: Tom, Thanks for your question. If the assignment lasts more than 12 months, your per diem is ...
gifting	8/9/2009
Q: I am a disabled woman in Calif. and I am finally in a position to buy some property. I read your ... A: Michaella, Thanks for your question. Gift are not taxable income and are not deductible items on ...
Hope credit	8/8/2009
Q: I just recently realized that in 2003 and 2004 I never took the Hope credit and it was during my ... A: Nadine, Thanks for your question. Sorry, but you are out of luck. First, you can deduct expenses ...
Separating from government service	8/8/2009
Q: Good morning Mr. Schnabel, First of all thank you for sharing your valuable knowledge. I am about ... A: John, Mr. Schnabel was unable to answer your question, but I will take a stab at it. ...
taxes	8/8/2009
Q: We are retired people with modest means near Phoenix. I trade a lot in ... A: Dick, Thanks for your question. Under current law, you will receive a 1099-B for each trade or an ...
Joint Tenancy with Fiancee	8/8/2009
Q: I am a US citizen, and he is a non US citizen. We won't be getting married until next year 2010. We ... A: Janet, I wouldn't worry too much about it. I cannot address this joint tenancy/ownership issue as ...
QDRO Tax Implications	8/7/2009
Q: I understand that a disbursement from a qualified retirement plan made to ex-spouse as a result of a ... A: Michelle, Thanks for your question. Since the distribution is being made under a QDRO there is no ...
roth ira early withdrawl	8/7/2009
Q: i converted a traditional ira to a roth ira 8/12/08... the whole amount of the conversion ... A: Mary Ann, Thanks for your question. Since you are over 59 1/2 there would be no penalty. However, ...
Tax on Bonus/Reimbursement for passing exam	8/7/2009
Q: My employer gives a bonus for passing an exam that is an important part in furthering my role at the ... A: Jeff, Thanks for your question. The bonus is taxable as it is a reimbursement for a non-deductible ...
residency requirement	8/7/2009
Q: With respect to my wife being a primary resident in one state and me a primary resident in a ... A: John, There is no set list of factors to determine residency. Where you get your mail, where you ...
Pastor Mortgage Donations	8/7/2009
Q: I really appreciate all the information offered here. I have some questions that I believe fall ... A: David, Thanks for your question. It really doesn't matter how the payment is made. By making the ...
Decrease profit	8/7/2009
Q: I have a s-corp and have been holding onto cash for the past year. In order to get my company ... A: Monica, Thanks for your question. Neither of those actions will affect your tax liability. As an ...
Dividend taxability	8/6/2009
Q: I work in a small investment firm with clients that have ABB Ltd. stock (cusip 000375204 ). The ... A: Shirley, If the company has retained earnings it is a dividend. If there are no retained earnings, ...
Primary Residency	8/5/2009
Q: I recently purchased a home in OR as a primary residence. I travel a lot for work and plan to have ... A: Mandy, Residency is not really a matter of number of days. Where do you go when you are not on the ...
Tax responsibility for monies from wrongful death settlement	8/4/2009
Q: My father died in January. My mother is now the administrator of his estate. She received an EIN ... A: Timm, Unless the settlement was designated by the court as punitive damages, the payments are being ...
New Mexico 1099	8/4/2009
Q: What percentage tax do i have to pay when i recieve a 1099? A: David, There are a number of different types of 1099's for different types of income. For any of ...
stock sales and long term gains	8/2/2009
Q: My understanding is that if I sell stock (held for more than 1 year), the gains will be taxed at 15% ... A: Rob, Thanks for your question. The gain on the stocks is taxed only at the preferred capital gain ...
Rental home sales exclusions	8/1/2009
Q: I would like to know if there is a vehicle (trust etc) into which I could put the before tax ... A: Patricia, Thanks for your question. No matter what you do with the proceeds of the sale you must ...
Tax on sale of an LLC rental property, how to account for, and do I need to quit claim it back under my name?	8/1/2009
Q: I bought a property, had the title under my name, then a few days later quit claimed the title to my ... A: It depends on how you treat the LLC for tax purposes. If you do not elect to have the LLC taxed as ...
Tax on IRA withdrawl	8/1/2009
Q: I am 60 and have a small IRA. I want to pretty much empty the account to purchase a home for myself. ... A: Candice, Thanks for your question. That depends on your filing status, and additional income you ...
Severance pay taxes	8/1/2009
Q: John. At what rate is severance pay taxable in the US? Further to this as a non American, no green ... A: Richard, Thanks for your question. Severance pay is taxed at the same rate as any other ordinary ...
Head of Household	8/1/2009
Q: What were the qualification of filing for "head of household" in 1992? Are the qualifications for ... A: Nita, Thanks for your question. Since she was married as of December 31 she should have filed ...
Foreign income tax exclusion	7/31/2009
Q: I'm trying to better understand the FITE for partial tax year. Here's the summary of my situation: ... A: Michael, Thanks for your question. No, that would not be correct. Even though you meet the 330 ...
Travel Expenses and	7/31/2009
Q: I work for an IL employer and I live in OR. I am an educator doing on-line classes. I do most of ... A: Convenience of the employer applies to home offices, not travel expense. They are still deductible. ...
Travel Expenses and "Regular place of business"	7/31/2009
Q: I work for an IL employer and I live in OR. I am an educator doing on-line classes. I do most of ... A: Mary, Thanks for your question. Your tax home, as you state, is your regular place of business. ...
Inheritance	7/31/2009
Q: I just inherited some land and a bit of money. If I sell the land, what is my tax liability? ... A: That is the tax bracket at which your last dollar of taxable income is taxed. Otherwise known as the ...
Inheritance	7/31/2009
Q: I just inherited some land and a bit of money. If I sell the land, what is my tax liability? ... A: Sam, Thanks for your question. You will be taxed on the excess of the sale price over your basis ...
income of a decedent	7/30/2009
Q: My wife's mother died November 2007. My wife has 3 brothers. Per her my wife's attorney, an estate ... A: Les, Thanks for your question. Once the person died any income coming in after that would be ...
Tax Deduction of Monies Given to a Church that Employed One of Your Dependents	7/30/2009
Q: My stepson has an opportunity to take an intern position with an out of state church. They will pay ... A: Daryl, Thanks for your question. No, you cannot take a tax deduction for those contributions as ...
foreign tax exclusion	7/30/2009
Q: Mr. Stancil, I am an instructor pilot working for a British company in Saudi Arabia. I left the US ... A: ED, Thanks for your question. The physical presence test requires your presence in a foreign ...
Sale of vacant land	7/29/2009
Q: Stancil- I have owned a vacant piece of land in Colorado for approximately 10 years, which I would ... A: Frank, Thanks for your question. If you sell, there are no "mechanisms" to avoid the taxes on the ...
Filing Married vs Single	7/29/2009
Q: ...My fiance and I bought a home in 2008. We are not married yet. Would it be beneficial to us to ... A: Beth, Thanks for your question. There is no such specific tax as a marriage penalty - that is just ...
Living and working in a foreign country	7/29/2009
Q: I am working in Germany for the next few years and I understand there is a limit to the amount of ... A: Nathan, Thanks for your question. You qualify for the foreign earned income credit/exclusion when ...
Incorporating a Masonic Lodge	7/29/2009
Q: We have a Masonic Lodge that is considering incorporating. The state headquarters has 501(c) (3) ... A: Cyrus, Thanks for your question. You will need to receive a corporate charter as a not-for-profit ...
Preacher becomes a company	7/29/2009
Q: As a young minister I was wondering if I would benefit from opening a company to handle the income ... A: Cyrus, Thanks for your question. Actually you already have a company. The funds you are paid ...
self employed tax deductability - spouse plan	7/29/2009
Q: currently I have a separate plan for myself and my son and deduct it as I am self employed. I want ... A: Andy, Actually, since you are eligible under your wife's plan you are not eligible to deduct the ...
overseas tax free employment	7/29/2009
Q: IM GOING TO AFGAN IN OCT IN A CONTRACT FOR 118,000 FOR A YEAR,WHEN I GET BACK WILL I TAKE THE 87,000 ... A: Monte, Thanks for your question. In the future, please unlock your caps key. All caps makes it ...
Distributions and divorce	7/29/2009
Q: My client went through a divorce in 2007. She was awarded 50% of her spouses 401k and Profit ... A: Katie, Thanks for your question. This is a transfer incident to divorce which is very similar to a ...
inherited IRA	7/28/2009
Q: I inherited $100,000 in an IRA from my Dad when he died this year (2009). He lived and died in ... A: Twenty percent is standard withholding from an IRA withdrawal. That will be reflected on the 1099 ...
Sale Rental Property w/ non-deductible passive losses	7/28/2009
Q: I want to sell my rental property and need general tax consequences of the sale. Never have been ... A: Chris, Thanks for your question. The depreciation, you state, is included in the passive losses. ...
inherited IRA	7/28/2009
Q: I inherited $100,000 in an IRA from my Dad when he died this year (2009). He lived and died in ... A: Michele, Thanks for your question. 1. I haven't seen the new tables, but your tax should be in ...
1120 S Sch. L	7/27/2009
Q: I am preparing 1120S for first time and having a really hard time doing Sch. L for my customer as I ... A: William, Thanks for your question. Pardon my bluntness, but if you don't know how to determine ...
S-Corp Tax Basis	7/27/2009
Q: When setting up an S-Corp does the par value have any bearing on the tax basis in case the stock is ... A: Peter, Thanks for your question. I once heard par value described as a legal fiction. That sums ...
designated gifts	7/27/2009
Q: I have a couple of inter-related questions regarding the giving of designated funds in a church. We ... A: Beth, Thanks for your question. In a general case, donations are made to a fund and the church ...
Taxes on Sale of 2nd home	7/27/2009
Q: We own a 2nd home in Florida but are NY residents? What taxes (eg. cap gains, state taxes, ... A: Mark, Thanks for your question. Since the house does not qualify as your principal residence, you ...
deliquent taxes	7/27/2009
Q: i filed my taxes this year just as i do every year. i owed the feds about 2,500.00. i paid them half ... A: Reggie, Thanks for your question. Yes, you are considered delinquent. An extension is an ...
tax exposure on foreign estate	7/26/2009
Q: My resident alien wife's father passed away and left her some money. How do you report that and ... A: Dave, Thanks for your question. It is not subject to estate tax, assuming the property was not in ...
Gas and mileage tax filing	7/26/2009
Q: I am in a music group partnership. We have been reimbursing each member for gas based on the IRS per ... A: Shane, Thanks for your question. You don't need to submit any information to the IRS on a ...
Gifting	7/26/2009
Q: So, does a person have to be of sound mind to gift $13,000 per year, per person? For example, what ... A: Jon, Thanks for your question. If the donor is not able to make their own decisions, someone ...
non-profit fundraising sole-proprietor	7/26/2009
Q: I have been hired to run a fundraising activity. I was hired by a private business and will be ... A: Gregory, Thanks for your question. Show the entire amount as revenue on your Schedule C. Then ...
Fed capital gains tax of sale of rental	7/25/2009
Q: Is it true that the federal capital gains tax is waived for this year through Dec. 1 as part of ... A: Gary, Thanks for your question. No, that is not true. However, under the Bush tax legislation, ...
Sub S and SS	7/25/2009
Q: I saw that you answered a question similar to one I need to ask. I am 63 and am a Sub S single ... A: As your total income increases, your SS may be taxable. It is a complicated formula, too long to ...
overseas tax exemption	7/25/2009
Q: My question is that if you are short your 330 days by lets say 20-30 days can i just go on a ... A: Dallas, The rules for the Foreign Earned Income Credit do not require you to work the entire time ...
Starting an LLC	7/25/2009
Q: Mr. Stancil I started an LLC in April, 2009. I am the sole proprietor. My question is about how ... A: David, Thanks for your question. If it is a business vehicle, it should be purchased through the ...
Clarification of $1 million gift tax exemption	7/25/2009
Q: Previously you answered a question about gift tax. You mentioned the 13k that you can give each ... A: Tom, Thanks for your question. The is no tax on the 14K, although a Form 709 must be filed. She ...
my first job	7/24/2009
Q: Stancil, I was hoping you could answer a question that I have that has been bugging me. For a long ... A: Liz, Thanks for your question. As long as you do not claim yourself as a personal exemption on ...
Corporation vs LLC	7/24/2009
Q: I am a physician who will be acting as an independent contractor. I have a great loan burden and do ... A: If you are hired with the incentive that your employer will pay all or part of your loans off, the ...
captial gain on main home	7/24/2009
Q: First of all, thanks for help in advance, my condo was bought 2002, we lived there until sep, 2005, ... A: Jack, Thanks for your question. There are two factors working against you. First, you apparently ...
Capital gains tax on house	7/23/2009
Q: In 1996 my sister-in-law and her husband helped my in-laws to place their house in the names of ... A: Don, Thanks for your question. Neither one of you is correct. The house is considered a gift, so ...
Corporation vs LLC	7/23/2009
Q: I am a physician who will be acting as an independent contractor. I have a great loan burden and do ... A: Maxwell, Thanks for your question. Loan payment are not a deduction for taxes, regardless of the ...
taxation of long-term disability premium	7/22/2009
Q: The church I serve as an ordained minister agreed to provide a long-term disability policy as part ... A: Linda, Thanks for your question. If the church "increases your salary" to cover the premiums the ...
Gift Cards Taxability	7/22/2009
Q: If a company purchases gift cards to be given out via a drawing at a company function and everyone ... A: Susan, Thanks for your question. The IRS considers gift cards the same as cash, so you would have ...
Contract Labor	7/21/2009
Q: What is the amount that a person, such as a nursery worker in a church, has to earn in a year before ... A: Dayna, Thanks for your question. Actually, the amount is $1. Someone who is a nursery or similar ...
IRA taxes & penalties	7/21/2009
Q: How much tax percentage will I owe for early partial withdrawal of an IRA for Fed and state of CA? ... A: Robert, Thanks for your question. There will be a penalty of 10% of the amount withdrawn. The ...
Do I have to file Form 1065?	7/21/2009
Q: My wife and I 100% own a partnership small business. In year 2007, we filed business related net ... A: Zach, Thanks for your question. Yes, your friend is correct. As of 2007, a husband-wife ...
Church buidling and personal home	7/21/2009
Q: We are starting a new church plant- Our mother church has offered a large gift to renovate our ... A: Jason, Thanks for your question. This is a rather complicated issue, and I can't give you a ...
CPA Not Filing Taxes	7/20/2009
Q: We paid our accountant (CPA) $650 to file our state and federal tax forms. We learned this past ... A: Barbara, Thanks for your question. You would need to call the IRS at 800-829-1040 and inquire ...
question about mileage deduction	7/20/2009
Q: If we lend our vehicle to a church for charitable work, can we deduct the mileage accumulated on the ... A: Sara, Thanks for your question. Probably not. IRS rules state that you can take a mileage ...
tax on inheritance	7/20/2009
Q: My aunt passed away and left me cash from her bank account. I will also inherit part of the house ... A: Joseph, Thanks for your question. You will not pay any income tax on the cash. If you sell the ...
ltd tax	7/20/2009
Q: i paid for long term disability at work after taxes.Now I am receiving checks not sure how long. but ... A: Kendra, If you paid the entire cost of the disability insurance, the proceeds are not taxable. If ...
Unmarried Co-Owners and Mortgage Deduction	7/18/2009
Q: My boyfriend and I are buying a house (we'll both be on mortgage and title), however we agree that ... A: Kim, Thanks for your question. There are two requirements to deduct the mortgage interest and ...
Long Term Travel	7/18/2009
Q: Back in Mar 2005, I began working on a contract taking me well into the second quarter of 2006, ... A: If you are working, or continue to work for more than 12 months in a single location, the IRS ...
business tax	7/18/2009
Q: i have a s-corp after all my deduction lets say thete is 50k left over what taxes am i subject to ... A: Harlan, Thanks for your question. You will owe state and federal taxes on your 1040 (and ...
Long Term Travel	7/17/2009
Q: Back in Mar 2005, I began working on a contract taking me well into the second quarter of 2006, ... A: Gary, Thanks for your question. That is true. It is not a matter of time between contracts, it is ...
volunteer reimbursement on income tax	7/17/2009
Q: I am avolunteer with the Florida Guardian Ad Litem for the courts which requires me to use extensive ... A: Karen, Thanks for your question. You mileage and out of pocket expenses would be considered ...
Grand/Parent Dependent	7/17/2009
Q: I was wondering if I could claim my mother as a dependent. I pay for a majority of her expenses, ... A: Brent, Thanks for your question. If you provide over half her support, including housing and she ...
health insurance payments	7/17/2009
Q: I have to supplement my employers health insurance plan with $150 from my gross pay every other ... A: Joan, Thanks for your question. If your employer will permit it, you can enter into a "salary ...
home taxes	7/17/2009
Q: When you purchase a home that you are paying the mortgage and taxes on are you by law required to ... A: Kim, Thanks for your question. By filing the home on your taxes, I presume you mean deducting the ...
w2 and 1099	7/16/2009
Q: I have been a w2 employed at my company however my partner has been giving me my commissions via ... A: Al, Thanks for your question. You can't be both an employee and an independent contractor for the ...
Floridian with a second residence in another state, working in a third.	7/16/2009
Q: I have always been a permanent resident of Florida. I have taken a 2 year contract that is ... A: Jane, Thanks for your question. You count a day in VA for every night you sleep there. You don't ...
Renting a room in my house	7/16/2009
Q: For the last 10 years or so I have been working for this non-profit agency and our agreement was ... A: Robert, Thanks for your question. It should be counted as rental income, reported on Schedule E, ...
Is certification reimbursement taxable?	7/15/2009
Q: Mr. Stencil, I understand Tuition Reimbursement is non-taxable to some extent. However, can ... A: Kacy, Thanks for your question. Reimbursement for the cost of training for the certification is ...
Bad Debts	7/15/2009
Q: An S-Corp (surveyors/engineers) formed a partnership with another engineering firm. The new ... A: Vic, Thanks for your question. Depending on the circumstances, the guarantees paid by the ...
Self Employment Taxes	7/15/2009
Q: My husband worked as an independent contrator for an insurance agency and received a 1099 last year. ... A: Daphne, Thanks for your question. You can't avoid them altogether. You can set up a corporation ...
Long Term travel	7/14/2009
Q: On June 26th, I completed a contract in another state. This contract has been renewed several times ... A: Gary, Thanks for your question. It is not a matter of how much of a year you are on assignment, it ...
RMD taxation 2009	7/14/2009
Q: John: My taxes each year consist of $5000 investment income, social security(this year)$22594 gross ... A: Bob, Thanks for your question and the kind words. The only problem with that scenario is that the ...
Tax consequence of Shortsale	7/14/2009
Q: I had a short sale on my house early this month (07/2009). I bought the house and moved in it on ... A: Ty, Thanks for your question. The residency requirement is that you live in the house for 24 of ...
Housing	7/14/2009
Q: Can our church write a check to a bank lender in order to pay off a pastor's house who actually is ... A: Dan, Thanks for your question. There seems to be more to this question than you are telling me. ...
Tax on Housing - Fair Market Value of Benefit?	7/14/2009
Q: My son, Jim, a college junior in this fall, recently accepted a summer internship at a company 150 ... A: Gary, Thanks for your question. He can claim a higher number of withholding allowances to have ...
Gifting a car to our son	7/13/2009
Q: My husband would like to gift one of our cars to our son and we were wondering if we can. On the ... A: Tina, Thanks for your question. Of course you can give him the car. If the value of the car ...
house inherited by 5 siblings	7/13/2009
Q: My Mom passed away 7/17/08 and left her house to me and four other siblings. I am the executor of ... A: Ann, Thanks for your question. Report the full amount of the income on your Schedule E. This will ...
Capital Gains on Sale of Land for Road Easement to State	7/13/2009
Q: The road in front of my home is being expanded. The state is paying for fee acquisition for the ... A: Eric, Thanks for your question. Assuming you have owned your house for more than 12 months all ...
Purchase Money Mortage Tax Rules	7/12/2009
Q: I have been offered a purchase opportunity on a piece of Property that I own. They buyer wishes to ... A: Michael, Thanks for your question. No, you can elect to report the sale by the installment method. ...
1009 taxes	7/12/2009
Q: I would like to know if a person is REQUIRED BY LAW to pay for social security contributions if they ... A: Lori, Thanks for your question. It's not called social security, but it's the same. You must pay ...
Rental Tax Writeoff/Deductible	7/12/2009
Q: My wife and I reside in one location in Texas. I have just accepted a 2 year contract as a school ... A: John, Thanks for your question. Your moving expenses are deductible - cost of transporting your ...
Working Overseas	7/11/2009
Q: I was working in Kuwait for a short period of time, I'm a US citizen retired military. I got hired ... A: James, Thanks for your question. You will meet the 330 day physical presence test on or about ...
Missing an Estimated Tax Payment	7/11/2009
Q: I forgot to send my estimated tax payments to the IRS and NY state in June. How does the IRS deal ... A: Jim, Thanks for your question. Go ahead and send in the payment. This would stop the interest and ...
vehicle taxes	7/11/2009
Q: I use my vehicle for work and am reimbursed gas. My question is - is there a cap on how much mileage ... A: Janinne, Thanks for your question. There is no limit on a mileage deduction, as long as it is ...
choosingcct/fin planner	7/11/2009
Q: First I am glad that you have been vouunteering for several yrs.I thank you. q 1 Is it good or not ... A: Bart, Thanks for your question. It really does not matter. If you have found someone who can do ...
deductable milage	7/10/2009
Q: Background data; 1) one way from home to employer is 11 miles 2) a certain vendor is 28 miles round ... A: William, Thanks for your question. The first and last stop of the day are not deductible mileage. ...
Church help for new missionary with no organization	7/10/2009
Q: We have an individual in our church who would like to start a ministry abroad but has yet to decide ... A: Elizabeth, Thanks for your question. That would be acceptable under current IRS guidelines. The ...
Personal use of business vehicle	7/10/2009
Q: Our company supplies vehicles for us to use. We have to record our personal miles. We are told ... A: Chris, Thanks for your question. Yes, you do have a commute. The home office appears to be for ...
In home child care and taxes	7/10/2009
Q: I am a stay-at-home mom and am considering watching one child full time. I am not watching the child ... A: Jenny, Thanks for your question. The income must be reported on Schedule C and Schedule SE (for ...
sale of personal residence	7/9/2009
Q: We sold two (2) homes in 2008 that both qualified as personal residences. Do we have the option to ... A: Theresa, No, there is no option in most cases. You can only exclude gain on the sale of your ...
Capital Gains Tax Fed&State (PA)	7/9/2009
Q: What is the % of Capital Gains tax if I sell my business. I am a small S-Corp. Is there a different ... A: Kara, Thanks for your question. The capital gain rate is zero or 15% depending on your marginal ...
Offerings for individuals	7/9/2009
Q: Have looked through some of your other answers which specify that if a gift is designated to an ... A: Matt, Thanks for your question. In giving support to a missionary, it is preferable to give it ...
Sale of home by one joint owner to another	7/8/2009
Q: My mother and I own our home as JTWROS. I have a 75% share of the basis (including improvements) ... A: Elizabeth, Thanks for your question. The property tax appraisal is not valid for this purpose. ...
Church Bookstore and Tax implications	7/8/2009
Q: We are a church with a bookstore. We sell books, Bibles, CD's and DVD's of our services, candy ... A: Rick, Thanks for your question. From an income tax standpoint, there are no issues. The bookstore ...
Gift of Equity	7/8/2009
Q: I'm trying to determine if there is a tax consequence on a gift of equity. My father in law is ... A: Todd, Thanks for your question. The $1,000,000 exemption is his lifetime exemption above and ...
Short Sale of Home	7/8/2009
Q: My spouse and I currently hold a mortgage with my mother in law on it, as well. We were trying to ... A: Eva, Thanks for your question. Since you have not lived in the home for 24 of the past 60 months, ...
LLC property transfer	7/8/2009
Q: Several years ago my wife and I transfered our home (where we reside) into an LLC. There was little ... A: Ben, Thanks for your question. Your basis is your original cost plus the cost of any capital ...
Food Donation Tax Deduction	7/8/2009
Q: I live in CA and was wondering how food donations are calculated as far as tax deductions go. My ... A: Ben, Assuming the food bank is a qualified charitable organizatin, you can take a deduction under ...
Travel Expenses	7/7/2009
Q: I live in TN but work in PA. I travel every week to PA and have done so for about 2 years. The ... A: Gary, Thanks for your question. I am sorry to tell you that your employer is 100% correct. Since ...
401k	7/7/2009
Q: I was recently displaced from my job and will have severance until May 2010. I currently have some ... A: Angela, You would be subject to a penalty of 10% of the amount of the distribution. Federal taxes ...
ministry or not?	7/7/2009
Q: We have just been told that my husband is consider self employed because he works at our church. He ... A: Victoria, Thanks for your question. The laws in this regard have not changed recently. If they ...
Gift/loans for corporations	7/7/2009
Q: To close my recent escrow, my aunts company which is incorporated made a check to me in the amount ... A: Chris, Thanks for your question. Just to clear up a point, the $13,000 is the exclusion the donor ...
Pros & Cons of owning vacation/rental home through an LLC	7/7/2009
Q: I plan to build a second home near the water via a bank construction loan. I plan to rent this home ... A: Tim, Thanks for your question. An LLC is a disregarded entity from an IRS perspective. This means ...
Insolvency	7/6/2009
Q: OK, I do hope this question is within your guidelines. If not, I am apologizing to you upfront. My ... A: Katrina, Thanks for your question. To prove insolvency total up the fair market value of ...
Inherited IRA, income tax, inheritance tax	7/6/2009
Q: which is... When are income taxes due on an inherited traditional IRA that is passed to a non-spouse ... A: Amelia, Thanks for your question. Taxes are due on your 1040 in the year of withdrawal. However, ...
Disability Pension	7/6/2009
Q: I am receiving a 3/4 disability pension from NYS Police & Fire System. Coded as 3 on the W-2 or 1099 ... A: Robert, Thanks for your question. Your residency does not affect the taxability of the pension for ...
Foreclosure Form 1099-A & 1099-C	7/6/2009
Q: I am trying to help out a personal friend. Here are the facts. He had a first trust deed secured by ... A: Mario, Thanks for your question. If he owed more on the house than its fair market value, he owes ...
Tax on inheritance from a Trust	7/6/2009
Q: My name is Curtis. My elderly parents set up an Irrevocable Living Trust back in 2002 naming me as ... A: Curtis, Thanks for your question. Since the IRA was funded with deductible dollars, the proceeds ...
Foreign Adoption	7/6/2009
Q: Dr. Stancil, In 2008 we finalized an adoption. We began the process in 2007 (spent $8000) looking ... A: Millers, Thanks for your question. The credit is limited to $11,650 for 2008. Since it is a ...
dependnts	7/6/2009
Q: Last year my taxes were done by Tax Express. They claimed my live in girlfriend, her two daughters, ... A: Joshua, Run, do not walk, away from Tax Express. You do not ignore an assessment letter from the ...
Ebay and Taxes	7/4/2009
Q: I am hoping you can help me with some tax questions. I recently just started selling on ebay. I am ... A: Jennifer, Thanks for your question. You will file a Schedule C for your business. Show the gross ...
social security taxing...+	7/4/2009
Q: mom will receive brother's retirement investment thru his work. he died. she is beneficiary. she is ... A: Kitty, Thanks for your question. First, giving you some of the money would do nothing to affect ...
past answer to a question	7/3/2009
Q: Could you please clarify your answer to a past question. Here is the question and answer. Below is ... A: Bart, Schedule E is not the proper place to deduct those. Any unreimbursed expenses in a ...
quit claim deed and tax ramifications	7/2/2009
Q: My mother passed away in March in Florida and left her home to me (living in CA). When her will was ... A: Diana, Thanks for your question. When you deed the house to your Dad, that will constitute a gift. ...
Living and Working in a Foreign Country	7/2/2009
Q: I took a job teaching in the UAE. I begin in August and will live and work in the UAE for at least ... A: Victoria, You will include all your income, from whatever source, on your 1040. Sometime, probably ...
who is a minister for tax purposes?	7/2/2009
Q: Can someone be considered a minister for tax purposes who is with a religious nonprofit other than a ... A: I do not quote code here, as it would take more time than I can justify on a volunteer basis. ...
mileage reimbursement starting point for w-2 employee	7/2/2009
Q: I recently took a job that is currently 50 miles away from my home. Upon my completion of my first ... A: Phyllis, Thanks for your question. Commuting mileage is not deductible. If you go someplace other ...
IRS Clergy Exemption	7/1/2009
Q: In 2003 I was promoted to a Pastor position. My CPA told me that in light of my promotion, I ... A: Allen, Probably nothing. The position of the IRS is that you are responsible for your taxes, even ...
who is a minister for tax purposes?	7/1/2009
Q: Can someone be considered a minister for tax purposes who is with a religious nonprofit other than a ... A: Norma, Thanks for your question. Certainly. It depends on what duties the minister is performing ...
Cancer benefit/fundraiser	7/1/2009
Q: My sister and I are organizing a benefit for our mother who has leukemia. She had to take an early ... A: Larry, Thanks for your question. Since you are not a qualified tax exempt charity, the donors get ...
Can we defer gain under 1031 exchange	7/1/2009
Q: I am a restaurant franchise owner and I am planning to marry a man who also owns restaurants in the ... A: Kimberly, A 1031 is an exchange. You exchange your property for like kind property. If you ...
Monetary Gift to Pay for School	6/30/2009
Q: I understand that $11,000 is the max that can go untaxe from the donor in one calendar year. My ... A: Ana, Thanks for your question. 1. The annual gift exclusion is now $13,000. Gifts are not taxable ...
Gifting	6/30/2009
Q: My wife and I wish to gift $80,000 to 2 separate(40k ea) families. One is a single nephew and the ... A: Richard, Thanks for your question. You are allowed to give up to $13,000 per year to an unlimited ...
mom's estate	6/30/2009
Q: mom passed away and we had cd's and money in a bank in both our names. There was one account which ... A: Katie, Thanks for your question. Unless the estate exceeded $3,500,000 there are no estate taxes. ...
Member Distributions and Scholarship	6/30/2009
Q: I am planning on opening a business next summer with some of my friends. We would create a LLP, S ... A: Aaron, Thanks for your question. 1. Not sure what you are including in the etc. part, but since ...
Student taxes	6/30/2009
Q: I'm a PhD student, so I'm being given a stipend in order to study and work an assistantship. Will ... A: Aleaxandria, Thanks for you question. Yes, that amount is taxable. You should have been a PhD. ...
K1 v.s. 1099	6/30/2009
Q: John, Hope your doing well. I have a general question. I work for a company for 14 years as a ... A: Brian, Thanks for your question. You don't state whether the organization is a partnership or an S ...
1099 TAXABLE INCOME ON SHORT/FORECLOSURE	6/29/2009
Q: I have a general question regarding the 1099's that are issued during a short sale/foreclosure. I ... A: Ajay, Thanks for your question. The mortgage debt relief act does not cover insolvency, that was ...
eminent domain and capital gains	6/29/2009
Q: and wanted to as a similarSpecifically - If the state transportation dept. procures part of my ... A: Chris, Thanks for your question. If you sell your home within two years, you can exclude the gain ...
Estate Property Depreciation Basis	6/29/2009
Q: Stancil, I am in the process of helping a friend file a 1041 for his aunt which includes a rental ... A: MM, Thanks for your question. The property receives a stepped up basis as of date of death, so use ...
Independent Contractor vs. Employee	6/29/2009
Q: My wife just took a job with a pretty large company. However, they hired her on as an independent ... A: Jerry, Thanks for your question. It sounds to me as if the company is in violation of the law. ...
estate inheritance property tax	6/28/2009
Q: My father died in 1984. In 1993 my mother removed my father and added myself and my brother on the ... A: Arnold, Thanks for your question. This gets rather complicated as you did not include all the ...
Owner Compenation	6/27/2009
Q: It is a two part question. First, if the CEO/full time employee borrows money from the Corp for ... A: Tana, Thanks for your question. Since he is an employee, the unpaid loan would have to be reported ...
bank account and beneficiaries	6/27/2009
Q: i am single, not marry, no kids. i have money in my bank account and i want to name some ... A: I responded, answering from an income tax standpoint. A few states to have an inheritance tax. ...
LLC vs. Corporations reg. W2s	6/27/2009
Q: I want to form either a LLC or Corp for an electrical company, that will also employ a licensed ... A: Paul, Thanks for your question. I would suggest that you form a corporation and pay yourself a ...
Rental Home Depreciation and Loss	6/27/2009
Q: At the end of February, 2008, I purchased a home for long term investment in a very good location, ... A: Sandra, Thanks for your question. Your tax basis for depreciation is your cost. In this case, ...
QUestion please.	6/26/2009
Q: My mother & I won a new car and picked it up a month ago. I am beginning to question if the dealer ... A: Rich, Thanks for your question. State laws vary regarding sales tax, but generally if a sale did ...
1099 Q	6/26/2009
Q: I have a VCSP College America fund which I had for 10 plus year, in 2007 I withdrew some of this to ... A: Kirk, Thanks for your question. The IRS document matching program flags any 1099 that is not ...
Company deducting money from paycheck for a gift received	6/25/2009
Q: My sister won a tv from at her companies picnic. Well they deducted $2500 out of her paycheck the ... A: Niki, Thanks for your question. I can't address the issue about the value of the TV - it sounds as ...
estate tax	6/25/2009
Q: My sister-in-law lived in Missouri. She passed away in October 2008. She left a will but also she ... A: Gail, Thanks for your question. Yes, you should file a return for her for 2008 if her income was ...
Gift from parents	6/25/2009
Q: My daughter and her husband are to receive $10,000 from his parents. This is from the sale of his ... A: Sarah, Thanks for your question. The money is a gift, and gifts are not taxable income, so they ...
Church responsibility to send out 1099-MISC	6/24/2009
Q: I am the bookkeeper of local church and I'm wondering who we should be giving 1099-MISC's too. I ... A: Roy, Thanks for your question. You do not have to issue a 1099 to someone carrying on a business ...
1099-c credit card debt settlement	6/24/2009
Q: So if you receive the 1099-c from the credit card company as result of settlement (for the remainder ... A: Bob, Thanks for your question. I assume you are referring to the insolvency exception. You do not ...
Benevolence gift to church member	6/24/2009
Q: I saw where you said that a gift from the church benevolence fund is not taxable unless the person ... A: Roger, Thanks for your question. No, the IRS has no such limits. However, if contributions by ...
Church pay-roll taxes	6/24/2009
Q: If our church did not file 941's over the past 2 years due to honest reasons and not an attempt to ... A: Wayne, That is a legal issue that depends on how the church is organized. It could be the pastor, ...
Church pay-roll taxes	6/24/2009
Q: If our church did not file 941's over the past 2 years due to honest reasons and not an attempt to ... A: Wayne, Thanks for your question. 941c is used to correct information previously submitted. Since ...
capital gains and Pa inheritance	6/23/2009
Q: My wife recently inherited a house owned by her uncle in Missouri, and she lives in Pa. My question ... A: Ron, Thanks for your question. Her basis in the house is FMV as of date of death. You need to be ...
Do i need to pay taxes on a foeriegn inheritance?	6/23/2009
Q: I am a US citizen living in the USA and I recently inherited close to $20,000 from my dad's estate ... A: Sandy, Thanks for your question. Inheritances are not subject to income tax, so you do not have to ...
IRS Taxes Owed/Unemployment	6/23/2009
Q: End of last year I emptied most of my 401k (due to economy and financial situation after a ... A: Linda, Thanks for your question. The IRS is unable to waive any interest. Being over 50 or ...
cash inheritance	6/23/2009
Q: My father recently died and I found cash in his house. I am also joint owner of a bank lock box ... A: W, Thanks for your question. Inheritances are not subject to income tax, so you are in the clear ...
Claiming dependents with no SSN	6/23/2009
Q: I am moving back to the US after 22 years in the UK. I have never filed a US tax return and I now ... A: Kenny, Thanks for your question. You will not be allowed a dependency exemption without a social ...
Taxing tuition after reaching $5,250	6/23/2009
Q: Good Afternoon, I was wondering in the state of CA if after I reach the $5,250 of tuition ... A: Shellanna, Thanks for your question. You can ask, but it would be up to the company to decide ...
1099-A Investment Property under Partnership	6/22/2009
Q: We bought an investment property in 2005 with our partner, and we all agreed each of us owned 50% of ... A: Wen, Thanks for your question. The loss carryforward can be deducted in the year the property is ...
Estate	6/22/2009
Q: My father owns the house I am currently living in and the house he is currently living in, there is ... A: No inheritance tax would be due. Tax rates for decedents who died on or after July 1, 2000: * ...
gift tax	6/22/2009
Q: I am in the US on an H-1B Visa since 2007. When I came to the US I wired 100,000.00 from my savings ... A: It is not reportable as income, however gifts by non-resident aliens of $100,000 or more may need to ...
Paying for mission trips	6/22/2009
Q: I have read that as long as you direct your payment to the 501c3 organization, you can deduct ... A: Evan, Thanks for your question. If you designate the funds for a specific individual, you cannot ...
Estate	6/22/2009
Q: My father owns the house I am currently living in and the house he is currently living in, there is ... A: Belinda, Thanks for your question. Inheritance taxes are strictly state taxes, so I could not ...
ebay	6/22/2009
Q: I'm a college student. I buy and sell textbook on ebay every semester. I mean I buy the books that I ... A: JJ, Thanks for your question. You are probably selling the books for less than they cost you, so ...
life estate	6/21/2009
Q: My mom and sister lived together. The house was in life estate. My sister died of cancer and ... A: Anita, Thanks for your question. You will need to report your portion of the sale on Schedule D as ...
filing taxes personal and business	6/21/2009
Q: I am starting a business with partners and want to file separate business taxes and personal taxes. ... A: Cheryl, First you need to decide what form of organization your business will operate under. This ...
Capital Gains	6/19/2009
Q: We have lived in our home 4 years. 2 months ago we refinanced and took out $20,000. We will be ... A: Jenni, Thanks for your question. If you have owned the house for 24 of the past 60 months, and if ...
officer compensation for an S-corp.	6/19/2009
Q: As a daycare owner (S-corp)my client should pay themselves thru officer compensation do you enter it ... A: Linda, Thanks for your question. The owner/employee must be paid a salary and be issued a W-2 at ...
Childcare by Parent	6/19/2009
Q: I have a question. I have moved my mom here to California from Washington state. She will be ... A: Dorian, Thanks for your question. You do not have to give her a 1099, but to take the child and ...
Tax on Church Property if used for for profit business	6/19/2009
Q: Our church is considering allowing a member to set up a BBQ grilling business 3 - 5 days per week in ... A: Pete, Thanks for your question. Property tax laws vary from state to state, and sometimes from ...
1120 S SCHEDULE L	6/18/2009
Q: I AM DOING A RETURN FOR 1120 S WHERE SCHED. L IS REQUIRED WHERE CAN I FIND LINE BY LINE ... A: Linda, Thanks for your question. Page 35 of the instructions for Form 1120S has a line-by-line ...
financial	6/18/2009
Q: I should have put in the question that the Pastor is bi-vocational. He is only part-time employed by ... A: From your standpoint, his being bi-vocational does not change anything. As far as you are ...
stepson	6/18/2009
Q: My stepson's girlfriend so called filed his taxes and had the refund direct deposited into her ... A: Bonnie, You can go to this website and see if a return has been filed. ...
Capital Gains	6/18/2009
Q: My father sold me land for $1 some 36 years ago to build a house on which we did. We built the home ... A: Diane, Thanks for your question. You have several tax issues here. First, the house is considered ...
Financial duties for small church	6/18/2009
Q: Mr. Stancil, I attend a very small church in Rosenberg, Tx. We have only a three people, Pastor, ... A: Dona, Thanks for your question. You can probably handle it. As you know, there are some ...
taxable items for pastor	6/18/2009
Q: I have just taken over as treasurer for our church and was wondering if you could tell me of some ... A: Breanna, Thanks for your question. The IRS has two publications of interest, Publications 1828 and ...
Lost estimated tax payment	6/18/2009
Q: I sent off my 2nd quarter estimated tax payment via certified mail. It is now more than 3 days past ... A: Wendy, Thanks for your question. First let me say that with the IRS nothing is certain. However, ...
married filing separately to avoid short sale taxes	6/17/2009
Q: this year, i have a short sale for rental property in georgia acquired before marriage in 2007 and ... A: HP, Thanks for your question. Yes, you can file separate returns. However, it will most likely ...
Claiming Dependants	6/17/2009
Q: I was just wondering what the best solution to this problem would be. I am 23, not married and about ... A: Jillian, Thanks for your question. Normally the dependency exemption goes to the parent who has ...
Contract Labor/Employee	6/17/2009
Q: Can you have an employee on payroll who is also contract labor? A: Terrie, No, it would be difficult, if not impossible to justify an employee as contract labor. I ...
How is "sweat" equity taxed?	6/17/2009
Q: I recently received a cash distribution from an LLC where I had a small membership interest given to ... A: Anju, When you received the shares in 2003, their fair market value was taxable income at ordinary ...
taxes - depreciation	6/16/2009
Q: I'm trying to resolve a historical issue. Party acquired a commercial property in 1978 (from family; ... A: Roger, Thanks for your question. From you description, it appears that no actual sale occurred and ...
Charitable gifts	6/16/2009
Q: Stancil, I work for church that is a nonprofit 501(c)3 Corporation. I would like to know if I have ... A: Becki, Thanks for your question. You do not have to send 1099's to other not for profit ...
State of California income taxes/residency	6/16/2009
Q: My wife an I have lived in California for forty years and own a vacation home in Tahoe area and ... A: Michael, Thanks for your question. If you earn your income in Texas and if your primary residence ...
Want to get married-don't know how to file	6/16/2009
Q: I am wanting to get married. My boyfriend does not work and owes back taxes, so he says that we ... A: Brooke, You can file separate returns or you may qualify as a injured spouse and file a joint ...
Skill Game Tax	6/16/2009
Q: I have been playing skill-based games at WorldWinner.com and had a question about reportable income. ... A: Geoff, The amounts you win are reported as other income on line 21 of the 1040. You can deduct ...
NY/CA Income Tax	6/16/2009
Q: I a NY resident who is working in CA for this summer. I am a full time law student and have ... A: Mike, Thanks for your question. Since you are a NY resident you must report all your income to ...
Deductibility of Interest	6/16/2009
Q: If I buy a house for $750,000, and finance 80% of the purchase price with funds that are lent by a ... A: Steve, Thanks for your question. Provided that the trust holds a security interest in the house ...
Land Donation to church	6/15/2009
Q: I'm a board member of a small church in NC and we have a member who would like to donate land to ... A: JV, Thanks for your question. As a church, you do not have to have the 501(c)((3) approval in ...
401k to pay for college tuition	6/15/2009
Q: I am 58, I will turn 59 in Dec 09 - Can any money I have saved in my 401k be used to fund college ... A: Richard, Thanks for your question. First, any withdrawal you make from the 401(k) is taxable ...
Full Time Student Exemption	6/15/2009
Q: I have different opinions from two CPA'S concerning a full time student exemption for a parent's ... A: Jim, The law specifically states that the exemption can be taken for a full-time student who is ...
Foreign Tax Credit	6/14/2009
Q: My husband is currently working on a government contract in Iraq and we were wondering if the first ... A: Kate, I presume he is not a government employee. To qualify for the foreign earned income credit, ...
Mortgage interest and tax for co-borrowers	6/11/2009
Q: I and a friend bought a house together. Can one of us claim 100% of interest and tax on the sch.B of ... A: Jeannie, The interest and taxes must be deducted by the person who is legally liable for the ...
sale of house	6/10/2009
Q: In the next few days we'll complete the sale of our current house and the purchase of a new one. ... A: Seth, None of the improvements costs can be deducted. However, if they are capital improvements ...
Estate Income Tax Return	6/2/2009
Q: I am filing a 1041 tax return in which the estate had net income but a capital loss. ... A: Patrick, Thanks for your question. You can't have it both ways. Either the estate pays the tax and ...
foreign earned income	6/2/2009
Q: I will be working in Jordan for the next year. I was wondering how I will be taxed in the US? I ... A: Alex, Thanks for your question. Based on your information, you should qualify for the foreign ...
S-corp Tax Question	6/2/2009
Q: I recently passed my CPA exam and I have decided to start an S-corp and "Ironically" I have a ... A: The car should be placed on the books at FMV or your cost whichever is less. You can depreciate it. ...
taxi driver mileage	6/2/2009
Q: I'm a taxi driver and can I claim my mileage on my tax returns. If so how and what method I should ... A: In that case, your expenses are deductible as a miscellaneous itemized deduction on Schedule A, ...
S-corp Tax Question	6/2/2009
Q: I recently passed my CPA exam and I have decided to start an S-corp and "Ironically" I have a ... A: Steven, Thanks for your question. The amount you take as a withdrawal is totally unrelated to the ...
Frozen pension plan	6/2/2009
Q: My company has frozen its pension plan and will no longer allow additional contributions. They are ... A: RL, Thanks for your question. You can roll it into a Roth or Traditional IRA. If you roll it into ...
taxi driver mileage	6/2/2009
Q: I'm a taxi driver and can I claim my mileage on my tax returns. If so how and what method I should ... A: Bo, Since it is a "for-hire" vehicle you cannot take the standard mileage, but must use actual ...
short sale or foreclosure	6/2/2009
Q: From a tax stand point is a short sale better than a foreclosure? They have lived in the home for ... A: Tom, Thanks for your question. There is no consistent advantage from a tax view of one over the ...
joint ownership and estate taxes	6/1/2009
Q: My mother has put my sisters name as a joint owner on all her investments which total around ... A: Kline, Thanks for your question. Absolutely not the best way to go. First, since your sister is ...
Short sale of lot tax problem	6/1/2009
Q: I have a lot in Arizona that I hoped to build on, but cannot. I have tried to sell it for 2 years. ... A: Richard, Thanks for your question. You will owe tax on the difference in what you owe and the ...
Capital Gains Tax	6/1/2009
Q: My wife and I own a modular home that we use as a vacation home. We've own it for 11 years and have ... A: Richard, Thanks for your question. You missed one important point in the law. You must have lived ...
Live in one state, work in another	6/1/2009
Q: I am a Washington, DC resident but I work in Alexandria, VA. Can I pay my state taxes in Virginia, ... A: Alex, Mike couldn't answer your question, but I think I can help. There are special rules for DC ...
foreign tax home vs. travel deductions	6/1/2009
Q: I am a professor who is happily going on sabbatical. I will be abroad with my family for one year, ... A: Heidi, There is a semantic issue here. Your assignment is temporary if it lasts, or is expected to ...
foreign tax home vs. travel deductions	6/1/2009
Q: I am a professor who is happily going on sabbatical. I will be abroad with my family for one year, ... A: Heidi, Thanks for your question. The physical presence test requires that you have be physically ...
Living and Working in Different States	6/1/2009
Q: I live in North Carolina and own a house there, but work in Wisconsin. On an annual basis, I will ... A: Madison, Your primary residence is where you spend most of the time. Having a drivers license, ...
TAx filing for Yr 2005	6/1/2009
Q: I have W-2 form with me for the period Jan 2005 to May 2005. I had been to USA on L1b visa and now I ... A: Bala, You would file a 2005 Form 1040NA. These can be obtained by download from www.irs.gov. ...
Joint Brokerage Account	6/1/2009
Q: Stancil, My mother-in-law would like me to assist her in trading in an options account. It appears ... A: John, Thanks for your question. If her SS number is listed as primary, the 1099's and other ...
two state taxes	5/31/2009
Q: My husband is about to take a job in Kansas and I want to live in Oklahoma. Will we have to pay ... A: Bonnie Jean, Thanks for your question. Your husband will owe taxes in the state in which the money ...
tuition reimbursement as income	5/31/2009
Q: My employer has treated my tuition reimbursement as income on my W2 when in actuality I make 3500 ... A: Adina, Thanks for your question. It is not incorrect for the employer to treat this as income. ...
Foreign Exclusion	5/31/2009
Q: I am a US citizen working in the UK (paid by a US Corp) for about 10-years now. I have completed the ... A: As I stated earlier, your wife qualifies separately from you. Each person qualified on your own. ...
Page 4 1120 C corp	5/31/2009
Q: I have a 3 questions; 1) On Line 17 column d on schedule L 1120 (page 4, C corp) is the "short term ... A: Frank, Thanks for your question. Show only the amount of the mortgage. The interest is not a ...
S corp disolvement and payroll tax liability	5/31/2009
Q: I am 100% shareholder of a California S corp. I owe $11,000 in back payroll taxes for 2006. I am ... A: Jerry, You will be liable for the taxes withheld from the employees. IRC section specifically ...
IRS tax on foreign winnings	5/31/2009
Q: If an individual was to win a contest in Great Britain, and Great Britain sent them money for ... A: Joy, Thanks for your question. As a U. S. Citizen you are subject to tax on your world wide ...
Question regarding Overseas brokerage account	5/30/2009
Q: is it illegal in any way (opening an overseas trading account)? Plus advice on dealing with IRS, (is ... A: Richard, Thanks for your question. No, it is certainly not illegal to have an overseas brokerage ...
Loss on stock sale	5/30/2009
Q: If I sale shares of stock at a loss, can I deduct that loss on my tax return? Can I then turn ... A: Erwin, A loss on the sale of stock is deductible on Schedule D as a short or long term capital ...
Foreign Exclusion	5/30/2009
Q: I am a US citizen working in the UK (paid by a US Corp) for about 10-years now. I have completed the ... A: Jim, Thanks for your question. If you do not meet the bona fide residence test or the physical ...
Capital gains and the EIC	5/30/2009
Q: I have earned income of about $6,000 for tax year 07 and a trust fund handled by a major bank. My ... A: Sue, Pardon my rant, but typical IRS stupidity. Anyone giving information at the IRS should know ...
Rental Write-Offs & Short Sales	5/30/2009
Q: My condo has been my primary residence for 4 years. Because of the market, I would sell at a huge ... A: Angeline, Thanks for your question. You can deduct expenses associated with the rental, including ...
INSURANCE AGENCY SALE	5/29/2009
Q: I AM A SOLE PROPRIETORSHIP OPERATING A GENERAL PROPERTY & CASUALTY INSURANCE AGENCY. I HAVE OWNED ... A: Tangible assets are those having a physical existence. Intangibles are assets without such an ...
1099-MISC	5/29/2009
Q: Question is for a friend. She cut the yard for a church last year and they sent her a 1099-MISC for ... A: Ronda, Thanks for your question. She performed services for which she was paid - she has a ...
INSURANCE AGENCY SALE	5/29/2009
Q: I AM A SOLE PROPRIETORSHIP OPERATING A GENERAL PROPERTY & CASUALTY INSURANCE AGENCY. I HAVE OWNED ... A: Bruce, Thanks for your question. When a sole proprietorship is sold, it is treated as the selling ...
Friend wants to purchase a house for me...	5/29/2009
Q: A friend of mine is going to be coming into a malpractice settlement and wants to buy me a house ... A: Angela, Thanks for your question. If she gives it to you or sells it to you at a bargain price, it ...
Property Damage Insurance Settlement	5/29/2009
Q: We are anticipating an insurance settlement in the range of $400,000 for environmental property ... A: Marion, Thanks for your question. It does not matter what you do with the proceeds of the ...
Gift Tax	5/29/2009
Q: My father is selling some land he owns for about $30,000 the proceeds of which he is giving to me so ... A: Jordan, Thanks for your question. He will owe income tax on any gain from the sale. As far as ...
Replacement furnace	5/28/2009
Q: Stancil, I bought a house this year and before I could even renovate it, someone stole the furnace ... A: Jade, Thanks for your question. Since this is a personal use asset, you cannot deduct the cost of ...
Movie Company	5/28/2009
Q: I am co-owner of an LLC movie production company. In order to fund our new movie, we are looking for ... A: Tara, Thanks for your question. The "thank you" credits are simply taxable income like any other ...
Owning 2 Homes and Living in both	5/28/2009
Q: I am married and live/work in Texas and own a home. My husband lives and works in Oklahoma (this is ... A: Sibyl, Thanks for your question. You can file separately and both itemize or you can file a joint ...
Incentive Pay	5/28/2009
Q: Stancil. We are self-insured for health care coverage for our employees and pay the full freight ... A: Mike, Thanks for your question. I'm not a benefits specialist, so I can't give you details about ...
Taxation of CA Resident on Long-term Foreign Assignment	5/28/2009
Q: Four years ago, we sent an employee who was a CA resident on a long term assignment to Japan. His ... A: Judy, Thanks for your question. While I am not extremely familiar with the California tax laws, I ...
Divorce and Mortgage Tax	5/28/2009
Q: Last year 2008 i got married, bought a home and got divorced in same year. I stayed in house and ... A: Cory, Thanks for your question. If she paid some of the interest, or if the interest payments were ...
tax implications on sale/transfer of residence	5/28/2009
Q: I was wondering if you could help with a tax question regarding the sale/transfer of a residence. ... A: Fred, Thanks for your question. By selling it for $195,0000 under fair market value, you have ...
Church gift	5/28/2009
Q: I was wondering if you could help me with a tax question. I receive monthly income from a church for ... A: Gifts from individuals must come directly from the individual or family and cannot be funneled ...
08 TAXES	5/28/2009
Q: I havent filed 05,06,07,08 taxes I have my 08 taxes done with a large refund due to me. Can I file ... A: Steve, Thanks for your question. Since you have not filed for those years, you will not get your ...
down payment	5/28/2009
Q: My fiance and I are looking to purchase a house some time before December in light of the recent tax ... A: Paul, In order to avoid the loan being given gift treatment, there should be a signed note, with ...
Gift taxes and cost basis	5/28/2009
Q: In 2006 I received a gift of raw land from a sibiling who died a couple of years later. I know that ... A: Claudette, Thanks for your question. For gift tax purposes, the important value is not what he ...
Church gift	5/27/2009
Q: I was wondering if you could help me with a tax question. I receive monthly income from a church for ... A: Jack, Thanks for your question. They are giving money to support your ministry. That is taxable ...
Individual Tax- Medical	5/27/2009
Q: My mother is living in a retirement community and her mental state has been declining for awhile. At ... A: Ed, Thanks for your question. Payments for personal and household services are not deductible, but ...
$8,000 Tax Credit	5/27/2009
Q: When buying our home in January, my wife and I received the $7,500 tax credit. Recently I have been ... A: You must repay the $8,000 credit only if the home ceases to be your main home within the 36-month ...
$8,000 Tax Credit	5/27/2009
Q: When buying our home in January, my wife and I received the $7,500 tax credit. Recently I have been ... A: Ben, Thanks for your question. If you sell the house within 3 years, the $8,000 credit is due in ...
1031 exchange	5/27/2009
Q: I own a house that I purchased to rent out. I rented it out seasonally from 1998, when I purchased ... A: Jack, The safe-harbor rules for a like-kind exchange specify three criteria: 1. You must have owned ...
unemployment	5/27/2009
Q: if i pay my parent for babysitting and i pay taxes and social security and may be in future, are ... A: Regis, Thanks for your question. If you pay them for babysitting and social security is paid on ...
Short Sales	5/26/2009
Q: I have an investment property that I lived in for the first three years. I have heard that because I ... A: Peter, Thanks for your question. There are three criteria you must meet to exclude taxation on ...
Taxabilty of gift cards	5/26/2009
Q: Is there a maximum dollar amount on gift cards given by an employer that does not have to be ... A: Barbara, Thanks for your rating. Just a point of clarification. You stated that I confirmed what ...
insurance payment summer house	5/26/2009
Q: My vacation home was severely damaged in a wind storm. If I receive an insurance check payable to ... A: Susan, Thanks for your question. The insurance company will pay you their estimate of the cost of ...
Joint tenants	5/26/2009
Q: I have a property held in joint tenants with my parents. My parents want to quitclaim the property ... A: Minh, Thanks for your question. Depending on the amount involved, they may have to file a gift tax ...
Overseas - No Income from California	5/26/2009
Q: Stancil, I am working overseas as a Federal Government employee, in the pay of the Dept of the ... A: Steve, Thanks for your question. Most states do not recognize the foreign earned income credit ...
Taxes on rental Property	5/26/2009
Q: We are Canadian who just purchased a Condo in Palm Desert California. Our long term plan is to use ... A: Assuming that you would be filing married filing joint, for 2009, you would have to file if your ...
Mid-Year Change in Status	5/25/2009
Q: I recently went from having employer-withheld taxes (first 5 months of the year) to not having taxes ... A: AMy, Thanks for your question. There is a worksheet that comes with the instructions to Form ...
LLC	5/25/2009
Q: I own a very small portion of a LLC. My business partner has agreed to back pay me for my first ... A: Abby, Thanks for your question. The LLC can pay off your Visa debt, but that portion is still ...
How to make the Donee pay tax	5/24/2009
Q: How do you give money and make the family members include it in as other income, instead of the ... A: James, Thanks for your question. You can't. Gifts are not taxable income so you cannot force them ...
Transfer of Assets	5/24/2009
Q: Transfer of Assets We want to transfer assets from our son’s investment account into our account. ... A: Steven, Thanks for your question. No, that would not be legal. In order to qualify as a gift, it ...
Big Problem	5/24/2009
Q: I know I have a mega problem on my hands. I have not filed taxes for at least twenty years. I have ... A: Gesus, Thanks for your question. You will need to use whatever records you do have (and can ...
house raffle	5/24/2009
Q: A local charity is raffling off a home they value at $450,000. The other homes in the subdivision ... A: Joan, You would owe taxes on the fair market value of the house as determined by the charity. ...
one time gift/lump sum settlement	5/22/2009
Q: She started receiving SSi for disability 1 1/2 years ago. How can she gives us all a one time gift ... A: Joann, Thanks for your question. If she gives you more than $13,000 she will have to file a gift ...
Corporate Taxation	5/22/2009
Q: The corporation I work for is based in Virginia but has employees throughout the states. We are ... A: Dawn, Thanks for your question. The employee who lives in MO but works in KS will have to file a ...
Form 1041 for an Estate and impact to Beneficiaries	5/22/2009
Q: I am an accountant (non-CPA) working on a huge $100M Estate client return. The estate atty ... A: No. This line is only used when you have income in respect of the decedent (IRD). If the IRD was ...
cashing in stocks	5/22/2009
Q: i read your article about cashing in stocks, and i had a quickwhat if you bought the stock and lost ... A: Darren, You will have to get a broker. Stocks are traded on organized exchanges such as NASDAQ and ...
Per Diem in Clark County Nevada	5/21/2009
Q: Mr. Wellman, Myself and 4 coworkers from Chicago are working in Clark County Nevada consulting on ... A: Jim, Mr. Wellman couldn't answer your question, but I might be able to give you some guidance. The ...
401K	5/21/2009
Q: My husband and are are in our late 20's and have been putting fund into our 401k account for several ... A: Jenny, You are allowed to withdraw up to $10,000 lifetime from your IRA toward a first-time home ...
Form 1041 for an Estate and impact to Beneficiaries	5/21/2009
Q: I am an accountant (non-CPA) working on a huge $100M Estate client return. The estate atty ... A: Melissa, Thanks for your question. The tax due on the 1041 can be paid by the estate or passed to ...
Clergy Housing Allowance Limitation	5/21/2009
Q: If a pastor receives a housing allowance and goes on sabbatical renting out his housing for the ... A: Tony, Thanks for your question. While the house is being rented it does not qualify as his ...
State Income Tax	5/21/2009
Q: I have been paying back State Income tax on my 2001 return. I had withdrawn my 401k to pay medical ... A: Jennifer, Thanks for your question. The IRS has a 10-year statute of limitations on the collection ...
joint ownership - rental income	5/21/2009
Q: Some background on my questions - me, my brother and mother currently co-owned an apartment (1/3 ... A: Absolutely. The gain is the excess of proceeds from the sale minus the basis. Since the apartment ...
joint ownership - rental income	5/21/2009
Q: Some background on my questions - me, my brother and mother currently co-owned an apartment (1/3 ... A: Eddie, Thanks for your question. For the past, you can deduct the taxes if you are legally liable ...
Corporate Housing for Summer Interns	5/21/2009
Q: This year my company decided to provide corporate apartments for our summer interns. All units have ... A: Jenifer, Thanks for your question. If the interns' living in housing provided by your company is ...
overseas tax exemption	5/21/2009
Q: I have been looking at the overseas tax exemption and have a question about time requirements. I ... A: David, Thanks for your question. If you do not meet the 33o day physical presence test you do not ...
Ky Inheritance tax	5/21/2009
Q: I am a resident of Arizona. Will I have to pay the KY inheritance tax on the estate of an uncle who ... A: Tom, Thanks for your question. Yes. You are considered a Class B beneficiary with an exemption of ...
What is taxable income?	5/20/2009
Q: I am an minister who preaches from church to church here in the States, holding week long meetings ... A: Chris, Thanks for your question. All of those items are taxable income to you. They are given in ...
Question on selling house / closing costs / no capital gain.	5/20/2009
Q: I've lived in my house for over 2 years to the profit I make on selling it won't be considered as ... A: Victor, Thanks for your question. Closing costs of the sale reduce your gain and are not ...
taxed wages	5/20/2009
Q: My husband and I live in Alabama and he is working in Louisiana. He just noticed on his pay stub ... A: Candi, Most likely it is correct. He will need to file as a non-resident in Louisiana, reporting ...
401k/IRA early withdrawel	5/20/2009
Q: I have been paying into my 401k plan for nearly 13 years, my investments are well diversified. Even ... A: Bruce, Thanks for your question. As long as you are active in the 401(k), you cannot roll it into ...
C corporation	5/19/2009
Q: Taxpayer A has a corporation that has $1,001,000 in cash $1,000,000 of which is c corporation ... A: You still have not distinguished the value of the stock from the book value of the company. Those ...
my in-laws owe the IRS, big-time	5/19/2009
Q: My in-laws owe about $50,000 to the IRS after withdrawing a good sum of money from my ... A: Anon, Thanks for your question. You, or your relatives, would not be liable for their tax debts. ...
Form 8917	5/19/2009
Q: John: I received a 1098-T from the college my son attends. In box #2 the amount is $36,390, in box ... A: Oscar, Thanks for your question. No you cannot enter $17,806 as the limit for that deduction is ...
C corporation	5/18/2009
Q: Taxpayer A has a corporation that has $1,001,000 in cash $1,000,000 of which is c corporation ... A: Darrell, Thanks for your question. His basis may or may not be $1,001,000. He has inherited the ...
Taxes on Inherited Money	5/18/2009
Q: My father passed in December of 2008, I have received approximately 46,000.00 from his estate. am I ... A: Deborah, Thanks for your question. The inheritance is not subject to income tax. The annuity is ...
Inherited Land Sale	5/18/2009
Q: I inherited land in 2003. Would like to sell the land now (2009). What is an estimate of the taxes ... A: Jennifer, Thanks for your question. Depending on your income level, the taxes would be zero or 15% ...
Corrected 1099B & amended return	5/17/2009
Q: Received a corrected 1099B after I filed my return. Line 11 under "Proceeds from Broker & Barter ... A: Stu, Thanks for your question. If you do not file an amended return, you are likely to attract the ...
taxes on stocks	5/17/2009
Q: i was wondering if i am subject to SS, medicare and state taxes if the only profit i get is from ... A: Joe, Thanks for your question. Social security and medicare are taxes on earned income, so you do ...
how much do i pay in taxes	5/17/2009
Q: I recently opened a family day care in New york city. I was told I have to pay taxes on my own. How ... A: Nicky, Thanks for your question. You will make estimated payments of your tax liability on the ...
First Time Homebuyers Credit	5/16/2009
Q: I'am married.I own a mobile home on rented land.Do I qualify for the first time homebuyers tax ... A: Mike, Thanks for your question. No, you do not qualify. The mobile home is considered your primary ...
child tax question	5/16/2009
Q: My boyfriend and I live together and we have a baby together. When discussing our taxes, we had ... A: Tabitha, Thanks for your question. He can file a 1040X, amending his return to not take the ...
Wash Sale rule question	5/15/2009
Q: Good day, Sir! Can you help me understand the Wash Sale rule? I trade options on a few selected ... A: John, Thanks for your question. You're pretty much right on. If you buy a stock 30 days before or ...
Child tax credit	5/14/2009
Q: If I pay into a dependent care account (deducted pre tax), am I allowed to take other child tax ... A: Nate, Thanks for your question. Probably by paying into the dependent care account. This ...
parents death and my tax liability	5/14/2009
Q: I was on Mom's checking, life insurance, and retirement account as a beneficiary and the total ... A: Lynda, Thanks for your question. Normally you will owe taxes on the withdrawals from the ...
1099B Long Term/Short Term Break Down	5/14/2009
Q: I am working on filing an amended 2007 tax return. On one of the 1099B and cost basis forms, the ... A: Maureen, Thanks for your question. You will have to use reasonable estimates that you can defend ...
property tax itemization on co-owned house	5/14/2009
Q: I've tried to research this in IRS publications and elsewhere, but was unable to get an answer. My ... A: Jim, Thanks for your question. The only requirements are that you are legally liable for the ...
INHERENTIENCE TAX	5/14/2009
Q: I AM AN INDIANA RESIDENCE AND I AM GOING TO INHERENT AROUND $150,000.00 FROM MY GRANDMOTHER WHOM ... A: Cindy, Thanks for your question. You have no federal tax obligations, as any estate tax would be ...
closed business	5/14/2009
Q: We closed our business in 2007 and filed our taxes for 2008. Do we need to notify the IRS (by a ... A: Hallie, Thanks for your question. On the 2007 return you should have indicated that the return was ...
getting married and both have homes	5/14/2009
Q: I am getting married and we both own homes. We would like to sell one but are currently underwater ... A: Christine, Thanks for your question. You do not have to file separate returns. You can deduct the ...
RENTAL INCOME	5/14/2009
Q: What is the tax impact of renting out rooms to boarders, while occupying a primary residence? Is ... A: Brenda, Thanks for your question. Your rental income would be reported on Schedule E, where you ...
taxs	5/14/2009
Q: My wife wants to withdraw $18,ooo from her 401-k. What would this cost us in taxes? A: Brad, That would depend on your marginal tax bracket and your state of residence. You need to be ...
seller's financing/installment payments	5/14/2009
Q: My stepmother is selling me a house for $45000. On September 2008 I already gave her $10,000 for ... A: Kelly, Thanks for your question. If she has not lived in the house for 24 of the past 60 months as ...
tax question on dependent minor	5/13/2009
Q: My wife's nephew who lives with us (we are his guardians)is inheriting between $60,000- $70,000 US ... A: Michael, Thanks for your question. Inheritances are not subject to income tax. The only potential ...
Mom's house sold for loss, filling out schedule D	5/12/2009
Q: mother passed away in 2008. She had her house in living trust. Appraisal on her house for her date ... A: Taber, Thanks for your question. You can deduct the loss on Schedule D, including the commission ...
tax	5/12/2009
Q: A quick "Hi" it has been a while.hope God is blessing you. Larry and I have had a tough year staying ... A: Linda, Thanks for your question. 1. If you report more than the bank indicates on the 1098, you ...
filing status	5/11/2009
Q: For the tax year 2008 I was legally separated from my wife. She filed Head of Household because she ... A: Jeff, Thanks for your question. You can ask her, but under tax law, if you have not lived under ...
stocks	5/11/2009
Q: i will be traveling to my native country and stay there for retirement. i am thinking in getting ... A: John, Thanks for your question. If you are a U. S. Citizen, you are subject to income tax on your ...
IRS..1099 stmt	5/11/2009
Q: My 1099B shows over $100,000 "gross proceeds less commissions"....IRS notified me that's my ... A: Nancy, Thanks for your question. The IRS does not have access to your cost basis, so they will ...
stocks and taxes	5/10/2009
Q: sorry i put the wrong email address and sent. here are my questions again. Hi John, i am 14 years ... A: William, Thanks for your question. 1. If you can buy and sell depends on brokerage laws. As this ...
stocks and taxes	5/10/2009
Q: i am 14 years old and would like to buy/sell stocks short term. i have a few questions 1. can i ... A: William, Thanks for your question. 1. If you can buy and sell depends on brokerage laws. As this ...
Re-sale on '08 Prius; tax implications on profit	5/9/2009
Q: Stancil, I purchased a 2008 Prius last April and I've only managed to put 1,300 miles on it (and ... A: Emily, Thanks for your question. The vehicle is considered a personal-use asset so it is not ...
question	5/9/2009
Q: I recently found that I've been filing my taxes incorrectly for the past 14 years. I'm married and ... A: Wanda, It depends. If you owe additional taxes you would have to go back 14 years, as this is most ...
INHERITANCE OF FOREIGN PROPERTY	5/9/2009
Q: I'm a U.S. citizen,live in Maryland and will receive $30.000 cash proceeds from the sale of a ... A: Jorge, Thanks for your question. As a U. S. citizen you are subject to tax on your worldwide ...
Do I have to file any more takes for my deceased father	5/8/2009
Q: May father passed in May 2008 and I did do his last tax return as the Executor of his Trust. His ... A: Wendy, Thanks for your question. A Form 1041 is a fiduciary return. Specifically, in your case it ...
Possible 1099C	5/8/2009
Q: I haven't lived in the US for nearly 10 years and so I didn't even realise I had any outstanding ... A: Michael, Thanks for your question. You do not mention if you are a U. S. citizen or not. If you ...
Mileage for school	5/8/2009
Q: I saw an answer you had posted some time ago regarding this question, but I'd like to ask it with a ... A: Michael, Thanks for your question. No, the education you are obtaining either qualifies you for a ...
Baby sitters	5/7/2009
Q: I babysat for my grandson in my daughter's home and made $7,200 (150 wkly). She reported this on ... A: Annie, Thanks for your question. If she issued a 1099, the income would be shown in box 7, ...
Gift Taxes after Exceeding Lifetime Exemption	5/7/2009
Q: My parents want to gift me $200K for use as a down payment on my first home purchase, but they have ... A: Nick, Thanks for your question. No, those approaches will not work, as the gift must be made with ...
1 year per diem rule	5/7/2009
Q: I am a contractor working in the US, over 700 miles away from home. I work through a job shop, they ... A: James, Thanks for your question. The clock does not restart. If you return to the same ...
Overseas Taxes	5/7/2009
Q: I'm currently working overseas with a contractor co.I over stayed my time in the USA more than 30 ... A: Lessie, Thanks for your question. If you do not meet the bona fide residence test or the physical ...
inheirted farm land	5/7/2009
Q: My siblings and I inheirted some farm land located in Texas in 1998, now it is being sold. All the ... A: Cecillia, Thanks for your question. You will owe income tax on the gain from the sale of the land. ...
Christian School Tuition	5/6/2009
Q: John, My question relates to a parent providing services to our Christian school and in return our ... A: The tuition remission must be a written policy that will cover all employees in a certain class - ...
Ineritance Tax	5/6/2009
Q: I am included as one of six heirs named in my Grandmother's Trust. I took the place of my deceased ... A: Eddie, Thanks for your question. You are correct that there is no Estate tax. On the state level, ...
social security death benefits	5/6/2009
Q: i receive social security death benefits for my two kids(father)can that be counted on taxes as my ... A: I stated it is not taxable income as I assumed their income level was so low that it would not reach ...
Investment Property	5/6/2009
Q: MY WIFE AND I HAVE AN INVESTMENT PROPERTY WHICH WE MAKE APROX 30K PER YEAR. OUR COMBINED SALARY IS ... A: Tony, Thanks for your question. You can deduct expenses up to the amount of your income from the ...
Christian School Tuition	5/6/2009
Q: John, My question relates to a parent providing services to our Christian school and in return our ... A: Rob, Thanks for your question. It will not jeopardize your 501(c)(3) status and it can be legal. ...
Insolvency for Cancellation of Debt on Second Home	5/6/2009
Q: I saw your post about using insolvency for cancellation of debt, just wanted to clarify: If I own 3 ... A: Rei, Thanks for your question. That is correct. Insolvency is an exception that allows you to ...
Claiming Child in taxes/changing dependent	5/5/2009
Q: I am 50/50 custodial parent and claim my son in odd years, (05, 07,09). For my work (W4), I claim 2 ... A: Charles, Thanks for your question. If you changed it annually, you would get a larger refund, or ...
Depreciation Recapture Income Tax	5/5/2009
Q: When I dispose of a Minnesota rental property I have depreciated, is there any way I can avoid the ... A: Glen, Thanks for your question. I don't know if you are referring to MN or Federal taxes, or both. ...
SEPERATED FILING	5/5/2009
Q: I AM SEPARATED FROM MY WIFE, HOW SHOULD I FILE TAXES MARRIED OR SINGLE AND HOW ABOUT CLAIMING ... A: Morry, If you did not live with your spouse at any time during the last six months of the year, you ...
determining W-2 or 1099	5/5/2009
Q: I work in a hair salon and have always been a W-2 employee. starting jan 1st 2009 my employer ... A: Solitair, Based on your description, it sounds like you should be receiving a W-2, especially ...
Gift Tax	5/5/2009
Q: I am expecting a big payment on comission equal to $700K lump sum. I want to give $500K to my wife ... A: Muhammed, Thanks for your question. Neither of you will owe gift tax on the amount. However, you ...
Dependants and Tax Amenedmend	5/5/2009
Q: My family has outside the US in a Home I had been paying for/including supporting them 100% for all ... A: Mike, Thanks for your question, I presume they were not U. S. citizens prior to the move to the U. ...
student stipend income	5/5/2009
Q: I was enrolled in a clinical pastoral education program as a chaplain intern. My stipend income was ... A: Jeanelyse, Thanks for your question. Because the company chose (incorrectly) to issue a 1099 ...
taxes on a duplex in minneapolis,mn	5/4/2009
Q: I own a duplex in ne Minneapolis, Need to know if I sell it for what i owe plus my home equity loan. ... A: Jeff, Thanks for your question. Your gain or loss is not based on what you owe, but on your basis ...
$8,000 tax credit	5/4/2009
Q: Here is my situation. Looking for a legal way to get around with it. Thanks. I am buying a home ... A: Kristy, Thanks for your question. The answer you cited did not address the issue of who can take ...
house and taxes	5/4/2009
Q: i took a loan in 2006 to buy a house in NYC and now the house is in foreclose state in 2009. i am ... A: John, Thanks for your question. If the debt is purchase debt, meaning that it was incurred to buy ...
CA NON Resident	5/4/2009
Q: In 2000 I was in the military, I purchased a home in Ca for my primary resident. I am a resident of ... A: Ken, Thanks for your quesiton. Unless you qualify under CA law to exclude gain on the sale of your ...
taxes on inherited cash	5/4/2009
Q: Please give me some insight on how inherited cash is reported; what IRS publications should I see?? ... A: Steve, Thanks for your question. You don't have to report it to the IRS. It is not taxable ...
SS	5/4/2009
Q: i am 79 years old man and retired collecting SS benefits. i get $15,184 in SS benefit and $6511 in ... A: James, Thanks for your question. That depends on your filing status. It is a rather complex ...
Mortgage interest & property tax deduction	5/4/2009
Q: I own my home and itemize deductions on my return, which includes my mortgage interest & property ... A: Jessica, Thanks for your question. In order to deduct mortgage interest and property taxes, you ...
Amended without my approval	5/3/2009
Q: I filed my taxes this year as an independent because I provide more than 50% of my own support. I ... A: Leanne, Thanks for your question. You father has committed an illegal act. You can contact the ...
College Tuition	5/2/2009
Q: My son will be attending college in 2009 and I will be paying his tuition. Is any part of his ... A: Tom, Thanks for your question. For the first two years, he will be eligible for the Hope ...
Business to Hobby	5/2/2009
Q: How do you go about changing from Business to Hobby ? I have a DBA, filed schedule C for the past 3 ... A: Patty, Thanks for your question. If its just a hobby, simply stop filing Schedule C. Report your ...
tax rebate	5/2/2009
Q: i own a mobile home and am in the process of buying a new house. my mobile home is in a park on land ... A: Bart, Thanks for your question. Unfortunately, a mobile home is considered your principal ...
taxable transfer	5/2/2009
Q: My 95 year old mother gave me Power Of Attorney over all assets. We put her cd's in my name. I ... A: Lendon, Thanks for your question. When you converted the CD's into your name, it constituted a ...
who can deduct?	5/2/2009
Q: My husband and I are co-borrowers with our daughter on a home. She recently graduated college and ... A: Emma, Thanks for your question. There are two requirements to deduct the mortgage interest (and ...
Cash Gifts	5/1/2009
Q: I know that I am able to give a gift of $13,000 to any individual without incurring any gift tax. ... A: Steven, Thanks for your question. No, the gift must count in the year given. However, there is a ...
Own a house and work over 50 miles away - renting	5/1/2009
Q: In this volatile work environment, my husband found a job 200 miles from home and rents an ... A: Cindy, Thanks for your question. Sorry, but that is not deductible. Since his job is of ...
Avoiding corp tax	4/30/2009
Q: I'm an IT contractor with my own Nevada corp. I don't want to pay tax on my money. I was thinking ... A: Asher, Thanks for your question. You are taxed on your profits, not your cash. This scheme would ...
Travel Expenses	4/29/2009
Q: We pay for the airfare, rental car, meal and travel expenses for a regular full time employee to ... A: Caryn, Thanks for your question. I presume the employee's regular place of work is the Southern ...
Certificate of Deposit Co-ownership	4/29/2009
Q: My mother in law will be entering a nursing home and needs to reduce her assets in order to collect ... A: John, Thanks for your question. Removing her name from the CD will constitute a gift. Assuming ...
FTHB Credit	4/28/2009
Q: John, My fiance has been planning on buying a home for some time and is in the process now. He ... A: Tien, Thanks for your question. If you are married as of December 31, both of you must meet the ...
Living in one state & working in another	4/28/2009
Q: If I live in Texas and travel each week for 4 days to work in Syracuse, NY, (1) can I deduct the ... A: Sandy, Thanks for your question. If your permanent job is in Syracuse you cannot deduct the travel ...
filing status	4/28/2009
Q: I live in CA, in the process of divorcing, not finalized yet. We started living apart in February ... A: Cindy, Thanks for your question. If you and your husband did not live in the same household at all ...
LLC	4/28/2009
Q: My son and his wife are members of their LLC formed it Rhode Island. This is used for rental real ... A: Jeanne, Thanks for your question. If they are the only members, they can include it on their 1040, ...
Coverdell ESA	4/27/2009
Q: We made a contribution to a Coverdell ESA for our daughter last year and this year in the amount of ... A: Kim, Thanks for your question. No, you do not need to amend your return or file a return for your ...
Federal with holdings	4/27/2009
Q: Started a job in Feb. of 2009 and there are no federal taxes being taken out of my check's.I don't ... A: John, Thanks for your question. Complete a new Form W-4 and claim fewer withholding allowances. ...
Taxable Gift	4/27/2009
Q: My mom just past and I am the sole beneficiary of 100k I would like to give my dad a large chunk of ... A: Daniel, Thanks for your question. Gifts are not subject to income tax, so your dad has nothing to ...
Who gets to claim the dependent	4/27/2009
Q: My husband's ex had custody of their 15 yo daughter and took the exemption every year since their ... A: Kathy, Normally, the person with whom the child lived for most of the year is the one who is ...
Executor did not file tax forms	4/27/2009
Q: My husband is the executor of an estate. It was his understanding he did not have to pay estate tax ... A: Amber, Thanks for your question. You state, "just the liquidation of assets." Liquidation of ...
K-1 Inheritance Tax	4/27/2009
Q: I thought there was no inheritance tax up to a certain amount. I have filed my 08 taxes and today ... A: Larry, Thanks for your question. You are confusing three different taxes. You are thinking of ...
late filing	4/27/2009
Q: John This question does not necessarily have to do with any particular field of law. I am currently ... A: Jeremy, Thanks for your question. Three things come to mind. First, if you are out of the country ...
W2- Consultant	4/27/2009
Q: I am a W2 Consultant and would like to know if I can my expenses as a consultant at the end of the ... A: Lisa, Thanks for your question. If you receive a W-2 you are considered an employee. Your ...
Pure cash payments	4/26/2009
Q: I just started my first real job at a restaurant and when my boss told me to come in to pick up my ... A: Mina, Thanks for your question. Yes, you should be worried. Your boss is acting illegally. He is ...
Educator Attending Conference Tax Deduction	4/25/2009
Q: I am a special educator and will be attending a conference over the summer that is disability ... A: A teacher, Thanks for your question. If the conference is job related, you can deduct your ...
Stepped Up Basis	4/25/2009
Q: I am an Realtor/PA. Can a Realtors Comparative Market Analysis (CMA) be used to determine the ... A: JJ, Thanks for your question. Certainly, the CMA is a valid method of determining the FMV as of ...
Church bookstore - sales tax - Florida	4/25/2009
Q: I am a bookkeeper for a small church. We have a bookstore and one of our venders sent FL form DR-97 ... A: Dottie, Thanks for your question. You must register as a sales and use tax dealer before you ...
Locating deceased father's tax return	4/25/2009
Q: My father passed away in September of 2008. I am the sole heir and my husband is my father's ... A: Jodi, Thanks for your question. Unless his taxes were done by a paid preparer, the only way to get ...
Tax on the sale of a home	4/24/2009
Q: My mother deeded her home to my brother and I fourteen months ago. She is now in a nursing home and ... A: Gary, Thanks for your question. The taxable gain on the sale of the home would be the excess of ...
stocks	4/24/2009
Q: 1. do you know if the irs has any publication on how they tax stocks? 2. how can i reduce my tax ... A: Ervin, Thanks for your question. IRS Publication 550 covers Investment Income and Expenses. It ...
gift taxes	4/23/2009
Q: My husbands great-grandmother passed away 14 years ago and in a Will left her home to her daughter ... A: Erika, Thanks for your question. It is not likely that a gift tax would be due, as there is a ...
Travel Nursing Deductions	4/23/2009
Q: Can a travel nurse use Schedule C versus F2106? I receive a W2. My meal deduction is reduced by 50% ... A: The 750 hours is per person, as you are looking at classifying individuals as real estate ...
1040x	4/23/2009
Q: I am a real estate professional and have several LLCs for my properties. For 2007 I filed my return ... A: Jan, Thanks for your question. Your question seems to be in conflict. In the first paragraph you ...
asset transfers into/out of partnerships	4/23/2009
Q: Is a transfer of stocks, mutual funds, etc. from individual into a general partnership or vice ... A: Julie, Thanks for your question. Generally speaking, it is a taxable event, sale, complete with a ...
Second Home Tax	4/23/2009
Q: I am trying to avoid paying income tax on a house that I bought for my sister. It is currently in ... A: Pam, Thanks for your question. If you default on the loan, either by a deed in lieu or a ...
personal loan	4/23/2009
Q: Borrowing $100K (each) from several friends to start a new business. Their money will be placed in ... A: Lisa, Thanks for your question. This appears to be strictly a business arrangement, in which your ...
1099-R combined for 2 people on 1 form	4/22/2009
Q: My mother-in-law passed away in 2005 and left several annuities to be split equally between my ... A: Ardith, Thanks for your question. I would suggest trying to talk with someone higher up at ...
Short Sale tax question	4/22/2009
Q: I am considering doing a short sale on my house. I want to be sure that I will not have to pay taxes ... A: Jamie, Thanks for your question. If you refinanced the house and took money out, that would ...
Claiming son as a dependent	4/22/2009
Q: Per my husband's divorce decree, the court states, "husband shall be entitled to claim the minor ... A: Laurie, Thanks for your question. The divorce decree will be taken into consideration. However, ...
401 k - nonresident - early withdrawal	4/22/2009
Q: First I would like to thank you for doing this volunteer thing. I really appreciate it. I am a ... A: Franck, Thanks for your question. Waiting until 2010 could reduce the taxes on the withdrawal of ...
Taxation on Seller financing Payments	4/22/2009
Q: Due to not being able to sell our last home, my wife and I currently have a lease to own contract ... A: You are correct, there is no "hard and fast" rule. The IRS attempts to determine your intent by ...
class action settelment	4/22/2009
Q: Do i have to pay taxes on class action settelment award? A: Dennis, Thanks for your question. That depends on the nature of the settlement and the reason for ...
Trader Tax Status	4/22/2009
Q: I’m interested in applying so called “trader tax status” and elect to use Mark-to-Market Accounting ... A: JK, Thanks for your question. As a mark-to-market trader you do report your trades on Form 4797 ...
Taxes not filed since 2002	4/21/2009
Q: My husband has not filed his taxes since 2002. My taxes are up to date (filed separately). IRS has ... A: Sharon, Thanks for your question. Requesting an offer in compromise cannot hurt. The worst that ...
Taxation on Seller financing Payments	4/21/2009
Q: Due to not being able to sell our last home, my wife and I currently have a lease to own contract ... A: Shack, Each payment you receive from the buyer consists of three segments - an interest component, ...
W2 & 1099 MISC	4/21/2009
Q: My employer gave me a 1099 MISC for a car allowance, income reported in Box 7. I also have a W2 from ... A: Rainy, Thanks for your question. Your employer should have reported the car allowance on your W-2. ...
Capital Gains	4/21/2009
Q: My mom is in a nursing home and deeded her home five years ago to myself and two of my siblings. ... A: Julie, Thanks for your question. Since the house was a gift to you, your basis in the house is a ...
Settlement for Personal Injury	4/21/2009
Q: I am going to be receiving a settlement for a slip and fall that I had in September of 2008. My ... A: Christine, Thanks for your question. Since I don't know where you live, I cannot address fully the ...
Estate Tax Return	4/21/2009
Q: My mother passed away in 6/08. I am the executrix of her will. It is only my brother and I who are ... A: Susan, Thanks for your question. You can deduct funeral expenses, costs of administering the ...
Self-employment tax	4/21/2009
Q: FACTS: I file a joint return with my wife. I am an employee, and I exceed the maximum amount of ... A: Richard, Thanks for your question. You will need to make deposits on the 15th of April, June, ...
CPA exam review course and exam fees	4/20/2009
Q: I have been working as a Senior Accountant at a company for the past two years. I recently passed ... A: Stefanie, Thanks for your question. It could go either way. If the company has n established plan ...
debt cancellation on rental property	4/20/2009
Q: my rental property went to foreclosure. The debt amounted to $85,000. The FMV at time of ... A: John, Thanks for your question. If the numbers are as you have given me, you have no debt ...
TX residents employed in CA	4/20/2009
Q: This is actually a rather convoluted scenario. If I end up in the situation of having to take a full ... A: 1. No. Your tax home would be CA, therefore your living expenses in CA are not deductible. And ...
ira gift to child	4/20/2009
Q: I am 60 and want to make a contribution to my daughter who is getting her masters degree. how much ... A: Gale, Thanks for your question. You cannot avoid tax on the withdrawal, regardless of the reason ...
Sun Life Annuity Distribution and Lost Basis.	4/20/2009
Q: Stancil CPA, My mother passed away and she had a annuity with Sun Life. Sun Life purchased a ... A: Jack, Thanks for your question. You do not state what type of 1099 you received. Since it was ...
Can I claim independency?	4/20/2009
Q: I am a 19 year old freshman this year working for the first time. I work two part-time jobs on ... A: When I said it would be of no benefit, I meant strictly from an income tax viewpoint. Either way, ...
Deed in Lieu and Taxes	4/20/2009
Q: I have a rental property in which I owe $109,000.00 The property is financed with an interest only ... A: Jake, Thanks for your question. There will be two tax effects of this action. First, you will ...
Home sale capital gains exclusion	4/20/2009
Q: My father had passed in August of 2008. He'd resided in his fully owned home for the full 4 years ... A: David, Thanks for your question. It is not necessary. Upon death, the basis in the home is ...
Travel Nursing Deductions	4/20/2009
Q: Can a travel nurse use Schedule C versus F2106? I receive a W2. My meal deduction is reduced by 50% ... A: Betty, Your latest information brings up a number of new issues. Material participation is defined ...
Will an LLC help me?	4/20/2009
Q: i live in california. i have a couple questions that i hope you can answer. i work full time as a ... A: Adam, Thanks for your question. Forming an LLC will not have any impact on your tax situation. An ...
Puts and Calls	4/20/2009
Q: I am considering investing in puts and calls, but would like to know about tax treatment of profits ... A: John, Thanks for your question. They are handled pretty much like a stock trade, reportable on ...
$8,000 tax credit	4/19/2009
Q: I been married since June 07,my wife purchased a house in Dec 2004, We haven't met at the time. ... A: Rodirque, Thanks for your question. In order for a married couple to qualify for the credit, both ...
Can I claim independency?	4/18/2009
Q: I am a 19 year old freshman this year working for the first time. I work two part-time jobs on ... A: David, Thanks for your question. There is really no status as "independency." You either take ...
Inheritance Tax in NJ	4/18/2009
Q: My husband is going to receive $3,500.00 from his grandmother's estate. Will the money be subject ... A: Tanya, Thanks for your question. No, inheritances are not subject to income tax state or federal. ...
Conversion to rental property implications	4/17/2009
Q: John, On 4/13/09 you graciously provided information to me. Below is my original question and your ... A: Moving the house to rental status is not irrevocable, but you will not be able to exclude gain for ...
real estate short sale - estate	4/17/2009
Q: I am the executor of my father's estate. We just sold his principal residence in Las Vegas at ... A: Bob, Thanks for your question. Unfortunately not. The law specifically applies to individuals ...
Not taking NOL	4/17/2009
Q: I saw that you answered this question here: Question I have a new client. They operated a farm in ... A: Again I don't have a definitive answer for you. I would not consult an attorney about having to ...
Custody Changed during the year. Who Claims the Children?	4/17/2009
Q: John, I lost custody of my 2 sons during June. I claimed them on my taxes but my ex-wife does not ... A: Steve, Thanks for your question. Absent a court order or agreement between the parents, the right ...
NOL	4/17/2009
Q: Sorry, I just also wanted to ask, what if someone made an honest mistake and did not take the NOL ... A: I think my first response deals with most of this. The problem with an "honest mistake" is that ...
Not taking NOL	4/17/2009
Q: I saw that you answered this question here: Question I have a new client. They operated a farm in ... A: Jaclyn, Thanks for your question. I have a couple of comments on this. First, I should have made ...
estate taxes	4/17/2009
Q: My mother died April 2009 as a resident in Virginia with an net estate of approx 300K. Will the ... A: Barbara, Thanks for your question. The federal estate tax exemption is $3,500,000, so you should ...
Car Allowance	4/16/2009
Q: I received a car allowance, I know it's taxable and my company deducts the state taxes from my ... A: Jose, Your employer is utilizing a non-accountable plan by paying you a car allowance. The ...
w2 vs 1099 taxes	4/16/2009
Q: I'm a freelance employee with a W2. My employer said that I'm responsible in paying both employer & ... A: Shu, Thanks for your question. You don't have a choice. If you receive a W-2 you are an employee ...
Tax Question;	4/16/2009
Q: John, I currently pull down around 40k a year on a 1065 (K1) my wife is a stay at home mother and ... A: No, you need to withhold $6,000 just for the self-employment taxes. Another $1800 or so for income ...
Tax Question;	4/16/2009
Q: John, I currently pull down around 40k a year on a 1065 (K1) my wife is a stay at home mother and ... A: Kenny, Thanks for your question. At that level of income, married filing jointly you are in the ...
Travel Nursing Deductions	4/16/2009
Q: Can a travel nurse use Schedule C versus F2106? I receive a W2. My meal deduction is reduced by 50% ... A: Betty, Thanks for your question. No, if you get a W-2 you must use 2106 for your employee business ...
Short-Term Vacation Rental Income	4/16/2009
Q: Mr. John Stancil: How do you report income/loss from a vacation rental that is typically rented for ... A: James, Thanks for your question. A rental of less that 14 days in a given years does not report ...
short sale taxes	4/16/2009
Q: our house is on short sale right now, we got an offer its being processed. We built the house on ... A: Tanya, Thanks for your question. Since you have not owned and lived in the home as your main ...
Tax free work	4/16/2009
Q: John- I plan on working in Abu Dhabi for the next 12 months. My employer tells me all taxes will be ... A: Ben, Thanks for your question. Partly correct. What he is referring to is the foreign earned ...
1099-MISC and W-2 Forms	4/16/2009
Q: I was an independent contractor for a company halfway through 2008 until they had me fill out a ... A: Sara, Thanks for your question. For the time you were an independent contractor you should ...
Separated...tax question	4/15/2009
Q: I have been separated for more than six months. Can i file itemized taxes and my wife with a ... A: Enrique, Thanks for your question. No, if spouses file separate returns both must itemize or both ...
Trust Property Tax Deduction	4/15/2009
Q: My mother had all her belongings in a living trust. After her death everything was distributed to ... A: Peter, Thanks for your question. Even though the trust has no income, in order to deduct the ...
an addendum	4/15/2009
Q: I filed one of my brothers' as a dependent on last years tax returns. They asked me for proof ... A: Marilu, Thanks for your question. You don't need a form for this, just respond with a copy of the ...
Sale of Rental Property	4/15/2009
Q: I sold single family rental property to my tenants in '08 for $39k that I never lived in. I ... A: What you owe on the house is totally unrelated to basis and gain/loss issues. Debt is a financing ...
help	4/15/2009
Q: i will get money back in oklahoma state tax and fereal tax also.i have not filed my taxes yet. i ... A: Steve, Thanks for your question. If you have a refund due, there will not be any penalties if you ...
Sale of Rental Property	4/15/2009
Q: I sold single family rental property to my tenants in '08 for $39k that I never lived in. I ... A: Anthony, Thanks for your question. No, the loan balance does not affect your gain or loss on the ...
Schedule K-1	4/15/2009
Q: I received a distribution from an estate (an IRA distribution) and had to declare that as income on ... A: Sue, Thanks for your question. You probably are not being taxed twice, at least you shouldn't be. ...
Adults living with you	4/15/2009
Q: Can you claim an adult that is not related to you but meets all the other qualifications (<$3,200 ... A: Rebecca, Thanks for your question. If you provide over half the support, the person has less than ...
1099R	4/15/2009
Q: Last year, I cashed out a state retirement fund. We had moved and were having finanical difficulties ... A: Probably not. When you file separately, there are certain tax benefits that are not allowed - ...
Tax Credit	4/15/2009
Q: As a non-married Co-Borrower & First Time Home Buyer, am I eligible for the $8,000 Tax Credit even ... A: Lynda, Thanks for your question. You are in luck. Unmarried joint purchasers may allocate the ...
Is my commercial building my primary residence?	4/15/2009
Q: I own a commercial building (4apartments, 2 store fronts) and live in one of those apartments. Do I ... A: Jennifer, Thanks for your question. If your qualify, you can take the credit for the portion of ...
Mileage deduction	4/15/2009
Q: I use a personal aircraft for business travel, but I am reimbursed by my employer at the FTR rate ... A: Chris, Thanks for your question. You deduct the reimbursement from your costs of operating the ...
Inheritance taxes	4/15/2009
Q: I am receiving a inheritance of roughly 20,000. It is currently in probate but i received a Form ... A: Bob, According to what is on the document that is taxable income, reported on Schedule E, line 33, ...
S-Corp Assets To Be Depreciated	4/15/2009
Q: I finally became so disillusioned with my old accountant this year I decided to do my business and ... A: Evan, Thanks for your question. You former accountant would be the only source of the depreciation ...
LLC questions	4/15/2009
Q: I saw the following question/answer between you and Ravi: Question We formed a 2 member Delaware ... A: Roman, Thanks for your question. This gives you a loss carry forward which may be applied from ...
1099 Minor Child	4/15/2009
Q: My daughter is 15. She worked for a daycare last year and received a 1099 in the amount of $1048.37 ... A: Rhonda, Thanks for your question. I don't know what line 3 you are talking about. However, this ...
Inheritance taxes	4/15/2009
Q: I am receiving a inheritance of roughly 20,000. It is currently in probate but i received a Form ... A: Bob, Thanks for your question. You are confusing two issues. The inheritance itself is not ...
8332 form	4/15/2009
Q: My wife and I divorced in June of 2008 we have 2 kids and the judge stated in the divorce decree ... A: Williamf4, Thanks for your question. Since the court order gives you one exemption, you can take ...
Loss on Rental property	4/15/2009
Q: I have a rental home and had a loss of 7000.00 last year. I am using Turbo Tax and it will no let ... A: Darlene, Thanks for your question. If your adjusted gross income is greater than $150,000 ...
W-4	4/15/2009
Q: Can I change my W-4 from 2 to say 8 so not so much tax is taken out of my check? Right now I get a ... A: Steve, The only thing you can do is raise the number of allowances you claim. But, as I said ...
Tax Deductions on a W-2	4/15/2009
Q: Hey John I am a horse trainer and employed by a company. Many times, I receive a 1099 for part of ... A: Dan, Thanks for your question. You can deduct employee business expenses as miscellaneous itemized ...
1099-G Overpayment Refund Treatment	4/15/2009
Q: John, I overpaid $2671 on my CT state taxes in 2006 which were filed in Dec. 2007. I received a ... A: Rich, Thanks for your question. If you itemized your deductions in 2006, the refund should be ...
taxes on selling a rental property	4/15/2009
Q: I purchased my first home (in Virginia) and have lived here for 6 years. Given the market, I'm ... A: Michelle, Thanks for your question. Yes and no. When you sell, if you have not lived in the house ...
tax bracket	4/15/2009
Q: my father is retired receiving SS benefits. he received about $3500 in pension from his old job. ... A: That depends on how much above the base amount he is. The worksheet on page 80 of the 2008 ...
Schedule F	4/15/2009
Q: I have a client that has built a separate building on his farm for his office. Is there any way to ... A: Sandi, Thanks for your question. If the office is an office for his farm business, you can ...
Child Care Expenses - obtaining tax id	4/14/2009
Q: I am trying to obtain the tax id of a daycare that my son was enrolled in. They are giving me the ... A: Melissa, Thanks for your question. Making the company's tax ID number public would be about the ...
401K & SEP losses	4/14/2009
Q: Can I get a deduction for losses in 2008 on my 401K account & SEP retirement account? How do I ... A: Nino, Thanks for your question. No, losses from a 401(k) and SEP accounts are not tax deductible, ...
roth ira and divorce	4/14/2009
Q: My wife and I separated in Oct., 2008. I had just under $20,000 in my roth IRA. Part of our ... A: Tim, Thanks for your question. You will need to complete Form 5329 for the tax and the penalty. ...
Head of Household	4/14/2009
Q: My wife and I married at the end of August 2008. Until that time and for the past eight years she ... A: Roger, Mike couldn't answer your question, but I think I can be of some help. Unfortunately, you ...
Filing taxes	4/14/2009
Q: Im a cab driver. I receive cash from clients & deposit it myself. Started in Nov 08. Do I need to ... A: Elvis, If your gross income exceeds a certain amount, you will need to file, regardless of how long ...
Can I claim my daugther	4/14/2009
Q: Just got back from H&R Block, been told that I can not claim my daugther as a dependent because she ... A: A full time student is defined by the institution in which she is enrolled. She must be full time ...
GNMA Taxation	4/14/2009
Q: I have several GNMA pool investments that pay monthly distributions, part of which interest and part ... A: Gary, Thanks for your question. Unfortunately, with the IRS document matching program, you will ...
Can I claim my daugther	4/14/2009
Q: Just got back from H&R Block, been told that I can not claim my daugther as a dependent because she ... A: Chris, Thanks for your question. If Block is right, what has changed is your daughter's age. If ...
rental property	4/14/2009
Q: We have a house we have rented for over 5 years. In 2008 it was vacant for Jan and Feb and occupied ... A: Drew, Thanks for your question. The below market value rule basically states that you are not ...
EITC for unmarried parents	4/14/2009
Q: My partner and I are unmarried, and lived together for all of 2008. We have on child, born in June ... A: Andrea, Thanks for your question. Since he took the dependency exemption, you cannot take the ...
Form 1099-B	4/14/2009
Q: I know you are busy this time of year so I don't want to take too much of your time but I was ... A: Pete, Thanks for your questions and consideration. You need to complete Schedule D, showing the ...
Non-Resident Tax Info	4/14/2009
Q: I have seen your answers on similar subjects and would appreciate your input on my situation. I am ... A: Shaun, Thanks for your question. Based on my reading of the NC tax code you do not owe taxes to ...
1099-MISC + W2?	4/14/2009
Q: My former employer issued both a W2 and a 1099-MISC form, with all of my tips/cash wages reported in ... A: If they weren't reported by you they are allocated tips. In stating that you should treat the W-2 ...
1099-MISC + W2?	4/14/2009
Q: My former employer issued both a W2 and a 1099-MISC form, with all of my tips/cash wages reported in ... A: Chayla, Thanks for your question. Your employer has improperly issued a 1099-MISC. Your tips ...
16 year old filing for first time	4/13/2009
Q: What form does my 16 year old need to file? He has earned income of $2200 and $100 in interest. We ... A: Sarah, Thanks for your question. He will need to file a 1040-EZ. However, if no income tax was ...
1041	4/13/2009
Q: I completed and filed my mom's Form 1040 tax return , (she owed $119). She then mentioned that she ... A: Carol, Thanks for your question. Yes, you need to file the 1041 so your mother can get the ...
Claiming a Parent who is disabled	4/13/2009
Q: My mother moved in with me last year, she is on social security disability with a monthly payment of ... A: Rachael, Thanks for your question. If she does not have at least $3,500 in gross income excluding ...
withholding on an inherited retirement fund	4/13/2009
Q: My brother passed away naming our dad as beneficiary of his retirement fund. We are now trying to ... A: Phoeblouise, Thanks for your question. First, there are not tax deductible home improvements. ...
1099-A	4/13/2009
Q: my parents bought timeshare in 2006. Last year they decided they don't want to continue paying so ... A: Mary, Thanks for your question. Their "sale price" is the amount of canceled debt, $10,897. Their ...
step up revaluation	4/13/2009
Q: My Mother sold her house in 2008 for $400,000. She and her late husband bought it in 1970 for ... A: Mike, Thanks for your question. When her husband died, she got a step up in basis on the 1/2 that ...
LLC tax question	4/13/2009
Q: I formed a LLC with a friend in May 2008 but had no operation or made no revenue. We are still ... A: Jarod, Thanks for your question. An LLC with two member will be taxed as a partnership or a ...
ACCELERATED BENEFITS	4/13/2009
Q: My husband had a heart attack this year, and got accelerated benefits from a life insurance policy. ... A: Lindsey, THanks for yuor question. If the payments are made to provide long-term care services ...
tax on stocks	4/13/2009
Q: i would like to know what is the tax on short term sale of stocks in 2009 and subsequent year. i ... A: 1. Due to the kiddie tax, your kid's investment income is taxed at your rate above a certain ...
Please help with extension and tax forms	4/13/2009
Q: I am so happy to find your profile. Your expertise is exactly what I need!! I have a multi-part ... A: 1. Yes. Interest and penalties are based on the amount owed. If you don't owe, no penalty or ...
NonCash Charitable Donations	4/13/2009
Q: I am use ItsDeductible via Turbo tax to enter my non cash donations. I have 2 questions about non ... A: Sandy, Thanks for your question. There is no limit, but if the amount exceeds $500 you must ...
additional child tax credit for clergy	4/13/2009
Q: It seems to me that the Additional Child Tax Credit Form 8812 rules for clergy (who do not qualify ... A: Katharine, Thanks for your question. First, to address the "discrepancy in the tax rules." ...
estate taxes	4/13/2009
Q: My father passed away 12/24/07. I did his final return last year. his residence was sold a few ... A: Heather, Thanks for your question. You are confusing two return, the Estate Tax Return, For 706 ...
Tax Deduction for the Event Space for a Non-profit Performance Piece	4/13/2009
Q: We are a 501(c)3 putting on a performance piece in a private home (possibly empty, possibly ... A: Camille, Thanks for your question. The owner is not experiencing any out-of-pocket expenditures ...
deductions?	4/13/2009
Q: John, HI, I have my own business in which I receive 1099's. But I also have a separate business ... A: Mike, Thanks for your question. No, the expenses for the stuntman job are employee business ...
Best way to file?	4/13/2009
Q: I have not filed my taxes in 6 years. I am a sole propieter so I have alot of reciepts. I want to ... A: Michelle, Thanks for your question. Filing an extension for 2008 is only an extension of the time ...
Please help with extension and tax forms	4/13/2009
Q: I am so happy to find your profile. Your expertise is exactly what I need!! I have a multi-part ... A: Mark, Thanks for your question. 1. Yes 4868 is the correct extension form for individuals. 2. ...
death of spouse	4/13/2009
Q: my husband passed away 7/29/08 how do I file this as we always filled married filling jointly and we ... A: Karen, Thanks for your question. You have my sympathies in your loss. File a joint return for ...
dependants and filing taxes	4/13/2009
Q: If a child has lived with you for the greater part of the year but your ex is listed in divorce ... A: Heather, Thanks for your question. The dependency exemption is normally taken by the custodial ...
Form 4361 Question	4/13/2009
Q: I filed form 4361 last year and they sent me a letter making sure that I understood what I was ... A: Steven, Thanks for your question. Just send in the original letter. The letter probably explained ...
Tuition and Fees Deduction	4/13/2009
Q: Can I take the Tuition and Fees Deduction for my dependent daughter who paid tuition using a ... A: Sorry, I was not totally clear in my response to you. It is true that you cannot take the tuition ...
Depreciation	4/13/2009
Q: Our current tax preparer is correcting and amending tax returns for the last 3 years. Our previous ... A: Nancy, Thanks for your question. You can file amended returns for those years. If this increases ...
Tuition and Fees Deduction	4/13/2009
Q: Can I take the Tuition and Fees Deduction for my dependent daughter who paid tuition using a ... A: Sandy, Thanks for your question. Yes, you can take the credit/deduction when the expenses were ...
overseas tax laws	4/13/2009
Q: ok, i have a question that alot of overseas contractors want to know or need to know. its about the ... A: William, Thanks for your question. You merely need to by physically present in a foreign country ...
tax on sale of home	4/13/2009
Q: In April of 2005, we purchased a new home in which we are presently living. Our former home, ... A: Allen, Thanks for your question. The only exception to the 24/60 month rule is for active ...
1099-B	4/13/2009
Q: My parents bought life insurance for me as a baby. At about age 52, in 2000, I started receiving ... A: Wait a few weeks to file an amended return. As I told you, the mechanism for determining basis has ...
Capital Gains	4/13/2009
Q: my parents sold their dairy farm (complete) due to a farming accident, they had enough money to pay ... A: Teri, Thanks for your question. The penalty for underpayment/nonpayment of tax is .5% per month ...
Form 4684	4/12/2009
Q: I just found the form 4684 and was wondering about it. Our house was broken into in Sept 2008 and ... A: Kay, Thanks for your question. If, at the end of 2008 you had not been reimbursed and were ...
Auto business use	4/12/2009
Q: I have three small business and use the same auto for each. Individually the use is under 50% for ... A: Warren, Thanks for your question. Two alternatives - you could file a single Schedule C for all ...
Ch. 7 Bankruptcy and form 982	4/12/2009
Q: I filed BK (chapter 7) in 2008 and all my debts were discharged (credit cards mostly). After ... A: Paul, Thanks for your question. If you qualify for an exclusion you should file Form 982. Debts ...
Tax on a Rental Property in Another State	4/12/2009
Q: My husband and I own a rental house in California. We reside in Virginia. Last year (2008) we made a ... A: Mary, Thanks for your question. Yes. Since the income was derived from a CA source, you should ...
Housing allowance excluded from state income tax	4/12/2009
Q: I've heard conflicting information about whether a ministerial housing allowance is exempt from ... A: John, Thanks for your question. Housing allowances are not subject to income tax in any state I ...
Minister and social security	4/12/2009
Q: I'm a young minister and just switched to a new CPA. The new CPA asked if I had opted out of ss. ... A: Peter, Thanks for your question. A minister may opt out of the social security program. However, ...
estimated tax	4/12/2009
Q: I need to pay estimated taxes. H&R Block gave me an information packet on estimated taxes, and it ... A: John, Thanks for your question. Block screwed up. They should have given you 1040-ES forms. Do ...
1099-B	4/12/2009
Q: My parents bought life insurance for me as a baby. At about age 52, in 2000, I started receiving ... A: Eugene, Thanks for your question. That is an issue that is currently unsettled. The IRS maintains ...
Tuition and fees deduction	4/12/2009
Q: I has been billed $15130.15, for the tuition and fees for my son, can I claim the full amount ... A: Qing, Thanks for your question. No, the Tuition and Fees Deduction is limited to $4,000 or $2,000 ...
State taxes	4/12/2009
Q: My husband works from home for a company that is in Michigan. We live in Texas, where there is no ... A: It can't cite tax code here, especially state code, as it would take entirely too much time in this ...
Insolvency Exception	4/12/2009
Q: John, I'm doing my Mother-In-Law's return. She ran into some problems this year and I negotiated her ... A: Mark, Thanks for your question. That is correct, with slight correction. You can reduce the ...
filing for deceased taxpayer	4/11/2009
Q: My dad died a week ago before signing his 2008 return. I have not yet been appointed executor of ... A: Joan, Thanks for your question. Just sign your name in the spot for his signature, and in the same ...
Sec 121 & Abandoned/Foreclosed Property	4/11/2009
Q: House surrended to bank AS PART OF CHAPTER 13 BANKRUPTCY. Bank lists date effective on 1099-A as ... A: Chapter 13 bankruptcy does not exempt you from paying tax on the income, only Chapter 11 bankruptcy ...
can my parents claim me?	4/11/2009
Q: I am 19, did not attend any college and graduated 2007. I have been supporting myself by: paying ... A: Alicia, Thanks for your question. They can claim you if 1) You lived in their household for the ...
Reporting from k-1 (from Partnership)	4/11/2009
Q: I have received a K-1 (associated with Form 1065 from "an Electing Large Partnership). The K-1 ... A: David, Thanks for your question. There should be a page 2 to your K-1, giving instructions about ...
tax on winning	4/11/2009
Q: I want to run a local fashion design contest. The winner will be given prizes in the form of gift ... A: Gwen, Thanks for your question. The winners will owe tax on the value of the gift certificates. ...
Forgiven debt/forcloseure investment property	4/11/2009
Q: I'm running into a real problem. I had two investment properties that went into foreclosure and ... A: Ray, Thanks for your question. When the debts were canceled, you had debt forgiveness income. You ...
SSD Taxes	4/11/2009
Q: A friend asked for help...so... She applied for Social Security Disability in 2006 and was not ... A: Gerry, Thanks for your question. The full amount shown on the SSA-1099 is reportable on her 1040. ...
Sec 121 & Abandoned/Foreclosed Property	4/11/2009
Q: House surrended to bank AS PART OF CHAPTER 13 BANKRUPTCY. Bank lists date effective on 1099-A as ... A: Tammy, Thanks for your question. Since the original purchase price is less than the balance owed, ...
Mortgage Forgiveness Debt Relief Act	4/11/2009
Q: i took a loan in 2006 to buy a house. since i cannot keep up with the property i am trying to do a ... A: Ervin, Thanks for your question. If you have lived in the house as your primary residence since ...
Tax liability when working in Japan	4/11/2009
Q: I have been working in Japan for a US based company since last March. I do not have 330 days of ... A: Tracy, Thanks for your question. If you do not meet the 330 day requirement, you do not meet the ...
Perdiem/Deductions -- Software Contractor	4/11/2009
Q: I am a software contractor, i am currently working on a temporary assigment for 3 months. I wanted ... A: Riaz, Thanks for your question. There is no set mileage limit. The IRS rule is that you must be ...
Minister's Opt-out of Social Security	4/11/2009
Q: I am assisting our new youth minister in filing his 2008 tax return. As a matter of course, I ... A: Melanie, Thanks for your question. The IRS is pretty firm in this regard and will not usually ...
Tax liability of non-profit status for church if starting a preschool	4/11/2009
Q: Our church is looking at starting a preschool and adding it as a ministry within the church. It ... A: Babette, Thanks for your question. You have no cause for concern. A pre-school ministry is ...
Bonus Pay	4/11/2009
Q: My husband's company will be closing in 2 wks. He was told he could expect a bonus of $110,000.00. ... A: Patricia, Thanks for your question. Sorry, but I am afraid there is nothing you can do. The law ...
Residency	4/11/2009
Q: My question is I spend eight months of the time at Arizona for college and the other four in ... A: You have mixed signals. Your driver's license indicates AZ. The fact you pay out of state tuition ...
state tax	4/10/2009
Q: 1.If my husband and I filed a joint federal tax return do we have to file joint state tax return ... A: Sankrita, Thanks for your question. There are 43 states with state income taxes, plus the District ...
Taxes for LLC	4/10/2009
Q: Good Evening, Thank you for making yourself available for advice. I'm forming an LLC for a ... A: Aneika, Thanks for your question. Yes, you can sell the car to the LLC, but you must do it at ...
What do I file?	4/10/2009
Q: I am a US citizen living in Jamaica for the past 5 years. I was employed by a Jamaican company and ... A: Trish, Thanks for your question. A U. S. citizen is subject to income tax on their worldwide ...
1099-Misc Income 65 and older	4/10/2009
Q: If a person who is 65 and older and receives Social security benefits gets a 1099-Misc from a ... A: Andrea, Thanks for your question. In the eyes of the IRS, you have a business. The income must be ...
disabled dependent	4/10/2009
Q: My boyfriend and I have been living together for 9 1/2 years, 7 years ago I was injured yet again on ... A: PJ, Thanks for your question. He must provide over half your support, you must live in his ...
Married Filing Seperately	4/10/2009
Q: My new wife has student loans in default and does not have enough income to even dream of paying ... A: Filing separately would protect you from having your tax refund taken to satisfy her debts. As a ...
medical expenses	4/10/2009
Q: my girlfriend is trying to have a baby using fertilization method. we will need to pay cash. i ... A: John, Thanks for your question. Neither one of you. Since you are not related, you cannot deduct ...
short sale tax	4/10/2009
Q: We own a home in CA. It was our primary residence for 10 years. Due to job loss/hardship, we moved ... A: Jill, Thanks for your question. You will get a 1099 for the canceled debt income. Since you woe ...
Residency	4/10/2009
Q: My question is I spend eight months of the time at Arizona for college and the other four in ... A: Dave, Thanks for your question. Where you spend you time is not the only issue. Where are you ...
Estate Tax on Inherited House	4/10/2009
Q: My mother passed away in December 2007. My six brothers and sisters and I inherited the trust, and ... A: Gina, Thanks for your question. You say you inherited the trust. If this is the case, it is ...
Married Filing Seperately	4/10/2009
Q: My new wife has student loans in default and does not have enough income to even dream of paying ... A: If you file separately, you tax bill will be significantly higher than with a joint return, ...
Capital Gains	4/10/2009
Q: I bought 24 acres in Texas at $5500 per acre. Of the 24 acres I sold 5 acres at $32,000 per acre. I ... A: John, Thanks for your question. You will include in the basis of what was sold the cost of the ...
Accidently claimed as a dependent on someone's taxes (Error code 0510)	4/10/2009
Q: John, this is my third question to you. The previous ones were regarding tuition reimbursement. ... A: Ash, Thanks for your question and lunch offer. There is not a good way to check on the status of ...
Follow-up on Previous Question	4/10/2009
Q: I'm sorry for not making my self clear earlier. My mother had a total withdrawal from her bank ... A: No, you don't include her income on your return. She does qualify from the income perspective. I ...
Education expenses of an employee	4/10/2009
Q: My client attended college in 2007 and received a form 1098-T from the college for 15,000 of ... A: Dan, Thanks for your question. The client cannot file an amended return because they did not pay ...
Over contribution to Roth IRA	4/10/2009
Q: Please let me know what is the best way to handle my situation. I have an over contribution to my ... A: You said she is getting $300 a month and you requested a 1099-R. This leads me to believe this is ...
Business Losses	4/10/2009
Q: We have a small web based "new media (deliver syndicated audio/video content) business. Our clients ... A: Josh, Thanks for your question. I presume the unbillable hours were hours that you spent, not that ...
Over contribution to Roth IRA	4/10/2009
Q: Please let me know what is the best way to handle my situation. I have an over contribution to my ... A: The charge for excessive contributions is not refundable and is levied every year until it is taken ...
partial distributions of estate to beneficiaries	4/10/2009
Q: my relative died in 2006 but his estate is still in administration , awaiting tax clearances. There ... A: Mary, Thanks for your question. It is impossible to know if those amounts are taxable without more ...
One more Q on reimbursed expenses	4/10/2009
Q: The 1099-misc I received from a company I did consulting for combined reimbursed expenses and ... A: Meg, Thanks for your question. Actually, since they included it in your income it is a ...
inheritance	4/9/2009
Q: My sibling and I inherited a brokerage account when our mother passed in Dec 2007. We sold all the ... A: Peter, Yes, that loss is deductible. Your loss is the difference in the fair market value on the ...
1099-A/Chapter 11	4/9/2009
Q: We received a 1099-A for a property we let go into foreclosure (Feb 2008). We have since filed for ... A: Tony, Thanks for your question. I have not seen your loan documents, so there is no way I could ...
Virginia tax on international assignment	4/9/2009
Q: In 2008, I worked and lived in North Carolina (Jan-Feb) and Germany (Mar-Dec), while holding a VA ... A: Vatanak, Thanks for your question. Since you maintained the house in VA and did not get a NC ...
1099 B	4/8/2009
Q: When reporting information from a 1099 B, it will go into the SCH D. The only boxes with anything in ... A: Kerry, The proceeds are shown as proceeds or sale price on Schedule D under long term capital ...
Amended return payments	4/8/2009
Q: When I had my taxes done origiannly I owed $475 for the year. I had an amendment done due to some ... A: Brandon, You should pay the amount shown on the original return. Give the IRS some time to process ...
child tax credit	4/8/2009
Q: Can you define child tax credit. We had our first child last year and make 138,000, do we get any ... A: Josh, Thanks for your question. The credit is a credit against your tax liability of up to $1,000 ...
child care credit	4/8/2009
Q: I got audited this year. Second year in a row actually asking for verification of my children as ... A: Lena, Thanks for your question. What you have should be sufficient. If they deny it, you can ...
Rental Expenses exceed Rental Income	4/8/2009
Q: Married couple; Refinanced Home to buy Rental. We are both teachers but used weekends, etc to fix ... A: Rob, First, you may have to capitalize and depreciate major repairs, appliances, and furniture. If ...
1099-MISC: Nonemployee Compensation	4/8/2009
Q: In filling out my taxes, the whole 1099-MISC is confusing me once again. I was a sports coach and ... A: Aliceson, Thanks for your question. Normally in these situations, you name is the business name ...
Capital gains tax on sale of land	4/8/2009
Q: In 2008 my parents sold some farm land to a neighbor. Some of the land my parents own was purchased ... A: Pete, Thanks for your question. Not really. The land has been sold, what they do with the ...
Distribution Code Q from Roth IRA 1099-R	4/7/2009
Q: Have a 1099-R, Box 1 has an amt, Box 2A-Blank, Box 2B-Taxable amt not determined is checked only, ... A: The IRS was partially correct. It is a non-qualified distribution. However, a code Q is a qualified ...
1099 misc	4/7/2009
Q: I received a 1099 Misc with entry in box 7. I am unclear on correct filing of my return. What I've ... A: You would need to answer them as they apply to you. You are on the cash basis, I can tell you that ...
State Tax Question	4/7/2009
Q: I am trying to determine if I will need to make estimated tax payments to NJ. On 2/10/09 I took a ... A: Dan, Thanks for your question. When you move out of and back into a state within the same year, ...
LLC	4/7/2009
Q: I just started an LLC in July 08. No employees, profit under 1,000. Can I file with my personal and ... A: Debbie, Thanks for your question. With an LLC you have a choice of being taxed as a corporation or ...
Mortgage Interest / Divorce	4/7/2009
Q: You recently answered a question regarding mortgage interest and I have a slightly different ... A: Jan, Thanks for your question. The itemized deductions for Jan - June can be split 50/50 if that ...
Amount to claim	4/7/2009
Q: I've made $625 total last year from freelance jobs, ie graphic design. Do I need to claim it as ... A: Laura, Thanks for your question. Any amount must be reported on Schedule C for income tax ...
rental property depreciation	4/7/2009
Q: I have a condo that I am renting out for a year. I understand from one of your previous answers ... A: First, you will have to pay the recapture when the property is sold unless the primary residence ...
rental property depreciation	4/7/2009
Q: I have a condo that I am renting out for a year. I understand from one of your previous answers ... A: Eric, Thanks for your question. You still must take the depreciation. You say it does not result ...
mortgage interest deduction when couple is separated.	4/7/2009
Q: On Jan 2008, divorce was filed and on Feb 2009 divorce is actually granted. In 2008, my ex-wife ... A: John, Thanks for your question. Interest can be deducted by the one who is legally liable for the ...
co-borrower	4/7/2009
Q: I am the co-borrower on my mother's mortgage. I make her mortgage payments. Can I claim the ... A: JT, Thanks for your question. If you are legally liable for the debt and you make the payments, ...
TAX FILLING?	4/7/2009
Q: . I've an international LLC. I'm from Argentina, I'm not a US citizen and I created an LLC in the ... A: Ignacio, Thanks for your question. Without a profit, you do not have to pay any taxes. An LLC is ...
Business loss in third year	4/7/2009
Q: My 2006 and 2007 returns show a small business loss. I have had no business activity thus far in ... A: Sharron, Thanks for your question. No, there is no loss recovery that you have to do. The only ...
Sale of an ex rental property	4/6/2009
Q: I sold a home in March of 2008. I used the house for 2 years and 2 months (2003-05) then rented it ... A: Depreciation recapture as ordinary income, as I stated. It will be at your marginal rate, not ...
Sale of an ex rental property	4/6/2009
Q: I sold a home in March of 2008. I used the house for 2 years and 2 months (2003-05) then rented it ... A: Marios, Thanks for your question. Yes you need to complete that form, indicating the amount of ...
IRA distrabution	4/6/2009
Q: I switched my IRA to a roth in December. Turbo tax indicated that I had to pay a penalty ... A: William, Thanks for your question. Your broker is incorrect. However, since the conversion ...
Deposit Money Forfeited	4/6/2009
Q: My fiance put $10,000 down on a piece of land and then he was unable to complete the deal so he lost ... A: Cindy, Thanks for your question. If this was a piece of investment property, the lost deposit can ...
72t	4/6/2009
Q: I am not yet 59 1/2 years old. How can I withdraw money from my IRA to pay for my son's university ... A: Teresa, Thanks for your question. Like Nike says, "Just Do It." Withdrawals for qualified ...
resident/non resident state tax	4/6/2009
Q: I am a payroll clerk, and we have a military wife who has residence in the State of Texas. My ... A: Donna, Thanks for your question. She is liable for OK state taxes and would have to file as a ...
Question on rental property	4/6/2009
Q: I bought a rental property in 2008. I file taxes as an individual (not a company). I have a couple ... A: Murad, Thanks for your question. Other than the home warranty fee, those are all costs that can be ...
IRA withdrawal for higher education and student loans	4/6/2009
Q: My situation is that I am a full-time graduate student, set to graduate in 8 months. The specialty I ... A: First, let me state that I am very impressed with your grasp of the situation. I find that many in ...
insurance deductions and medical	4/6/2009
Q: Is it true that I can deduct my health insurance premiums that are shown deducted on my pay stub? ... A: Sandy, Thanks for your question. You can deduct your medical insurance as an itemized deduction on ...
LLC, Sole Proprietor or S Crop	4/6/2009
Q: I am just starting my new business as a Professional Organizer, Re-designer, and Home Stager. I am a ... A: Paula, Thanks for your question. From a tax standpoint, it does not matter as the IRS does not ...
depreciation of home improvements for business use of home	4/6/2009
Q: I'm having difficulty figuring out where to deduct my depreciation for a home improvement made in ... A: Connie, Thanks for your question. Since you are not depreciating just the original cost of the ...
Lived in VA, Live in MD, Work in DC.. What do i file????	4/6/2009
Q: I lived in VA up until October 2007. I then moved to Maryland in October and have been living there ... A: I am not familiar with that rule. I think it may apply to a situation where you are live in a ...
Form 1041 - Line 20 - 22 (Exemption)	4/6/2009
Q: I am preparing form 1041 and K-1 relating to a trust established after my father's death. The trust ... A: David, To answer your first question, simply because the law does not allow it. For the second ...
Taxes on Gift Cards to Teachers?	4/6/2009
Q: The parents at our school would like to pool funds together to give to our teachers. If the funds ... A: Carla, Thanks for your question. If the gift cards come from the school, even though the funding ...
Capital loss question	4/6/2009
Q: My question is in regards to a loss that one of our S-corporations took last year(2008). My wife ... A: If it never opened, those costs you incurred are most likely organizational and start up costs. ...
Is this tax deductible?	4/5/2009
Q: As a soldier, can I deduct firearms training and related expenses to maintain marksmanship ... A: Michele, Thanks for your question. Since it is job-related and does not qualify you for a new ...
Individual Tax Question - Filing Status	4/5/2009
Q: I lived in NYC for 10 months and then moved to Georgia 2 months. My income is from NY source and my ... A: Felicita, Thanks for your question. You should file as a part-year resident in both states. Since ...
Small LLC	4/5/2009
Q: I am about to change my small business from a sole proprietorship to an LLC. What are the basic tax ... A: John, Thanks for your question. No tax implications. An LLC is not recognized as a separate ...
Small Business Software and Server Costs	4/5/2009
Q: I run a small business (sole proprietorship, changing to LLC) and provide software development ... A: John, Thanks for your question. I would simply classify those as "Other Expenses" with a ...
Capital loss question	4/5/2009
Q: My question is in regards to a loss that one of our S-corporations took last year(2008). My wife ... A: Kazuo, Thanks for your question. If the 50K loss is an operating loss, it is fully deductible. If ...
1099-MISC and Relocation Bonus	4/5/2009
Q: John, Thank you for taking my questions. I have read previous posts on this topic but still had a ... A: Michael, Thanks for your question. Since you submitted receipts, any of the reimbursement for ...
mortgage interest	4/5/2009
Q: We are divorced. I am making payments on the house and the mortgage is on my name only. Can my ex ... A: Slava, Thanks for your question. There are two criteria to deduct mortgage interest - you must be ...
fixing up expenses on rental property sold	4/5/2009
Q: John, I have a background similar to yours except I don't do a lot of tax; mostly accounting theory, ... A: Jack, Thanks for your question. Since it was a rental, any expenses they incurred in fixing it up ...
Oregon taxes for non-resident who gets Oregon unemployment benefits	4/5/2009
Q: I worked in Oregon for 1 month in 2008. I lived in Washington all of 2008. I get unemployment ... A: Rosie, Thanks for your question. Sorry, but that is not Oregon income (loss) so it cannot be ...
paycheck taxing	4/5/2009
Q: I work for a school which my pay check is once a month and I get paid for two duties, teaching and ... A: Stephanie, Thanks for your question. It is legal and a common practice. You will not be taxed ...
Christian missionary taxes	4/5/2009
Q: My daughter is a missionary to Mexico and is starting a children's home there. I am trying to do ... A: Steve, Thanks for your question. First, for future reference. She needs to set up a non-profit ...
Gold Kruggrands	4/5/2009
Q: My mom died 6/07 and left me everything in trust. I found some Gold Kurggrands, and at that time my ... A: Nora, Thanks for your question. You will owe tax on the gain from the date of death. How much? ...
Amending S Corp. return	4/5/2009
Q: If the S.corp. return was filed in Mar 2006 (for 2005), and the individual return was filed in June ... A: Sam, Thanks for your question. The individual return filing date has no bearing on the corporate ...
Over contribution to Roth IRA	4/5/2009
Q: Please let me know what is the best way to handle my situation. I have an over contribution to my ... A: Laura, You will have to wait for the document from the trustee, as they will refund you the excess ...
Tax	4/5/2009
Q: 1. My parents own a home. 2. I live in it. 3. My parents moved to the Philippines in June 2008 4. I ... A: Daniel, Thanks for your question. 1. In order to deduct the mortgage interest, you must be legally ...
1099 A & irs code 121	4/5/2009
Q: House surrended to bank effective 12/11/08 according to 1099A. Based on balance owed and original ... A: You will pay tax on the depreciation during the time of rental at ordinary rates. Since the amount ...
work related tax deductions	4/5/2009
Q: I am a full time resident of Oregon and took a job in Nevada. I worked in Nevada seven days on and ... A: Bill, Thanks for your question. Since you maintained your Oregon residence, the mileage is ...
S corp. shareholder legal exp.	4/5/2009
Q: as a shareholder of S corp.can you deduct the legal expense related to s.corp in schedule E? If yes ... A: The deadline for amending returns is three years from the date the original return was filed. A ...
1099 A & irs code 121	4/4/2009
Q: House surrended to bank effective 12/11/08 according to 1099A. Based on balance owed and original ... A: You aren't clear in saying it shows a "net of $75,000." Does that mean your amount owed was greater ...
How do I report my minor children's K-1 forms?	4/4/2009
Q: My minor children (ages 7 and 12) received K-1 forms from an LLC established by their living ... A: Melanie, Thanks for your question. The income reported on the K-1's should be included on the tax ...
Determining cost basis of privately held stock for tax purposes	4/4/2009
Q: I received a gift of stock for a privately held company in 2001. The company went public in 2005. ... A: Value at the time it was given to you or when it went public is not a factor at all. The only value ...
Tax Abatement	4/4/2009
Q: I am 50 years old. I cashed out a IRA for $60,000 in Jan 2008. I have to pay the IRS $16,000. My ... A: Beth, Thanks for your question. I doubt the IRS would accept the request, as this is not one of ...
dependant disability	4/4/2009
Q: my husband receives $1600/month disability and our two childern each receive $415/month as his ... A: Marci, Thanks for your question. Different agencies have different criteria. You use the money to ...
S corp. shareholder legal exp.	4/4/2009
Q: as a shareholder of S corp.can you deduct the legal expense related to s.corp in schedule E? If yes ... A: Sam, Thanks for your question. Legal expenses incurred to protect your investments can be deducted ...
eniment domain tax libility	4/4/2009
Q: In Oct 07 A county water agency took by eniment domain a easement 45ft wide by the width of property ... A: Athol, Thanks for you question. First, you do not have a valid 1031 exchange. For a 1031 exchange ...
commissions incorrectly put on 1099	4/4/2009
Q: Please help. I just realized my former employer gave me two documents. ONe a w2 and a second one ... A: Catherine, Thanks for your question. It is not proper for them to put the commissions on a 1099, ...
capital gains on inheritance	4/4/2009
Q: My parents purchased stock in a small privately held business in 1983. My father passed away in ... A: Don, Thanks for your question. That is correct. There are a number of ways to determine the value ...
1099 misc	4/4/2009
Q: I received a 1099 Misc with entry in box 7. I am unclear on correct filing of my return. What I've ... A: Jason, Thanks for your question. You may not think you have a business, but apparently you ...
K-1 1120s Line 16d	4/4/2009
Q: I have a K-1 with an entry only on line 16d for a final K-1. Where do you report the loss on an ... A: Ronald, Thanks for your question. Line 16d is a property distribution. As you know, distributions ...
housing allowance for summer job	4/4/2009
Q: My daughter, a college student worked in Washington state for a summer job (2 months) and received a ... A: Peri, Thanks for your question. Unless the housing was required as a part of the job, the housing ...
charity	4/4/2009
Q: I am a photographer and I did a fundraiser for a family last year. The people photographed made ... A: Willow, Thanks for your question. You don't state the legal form of your business, I will presume ...
limit of amount of money given as a gift	4/4/2009
Q: my mother has indicated that she would like to give my brother and myself a gift (money). My ... A: Larry, Thanks for your question. Gifts are not considered income, so she can give you any amount ...
Per Diem	4/4/2009
Q: My husband and I are residents of Utah. He has been working in Virginia since November. He is paid ... A: Donna, Mike couldn't answer your question, but I can give you an answer. Unfortunately, I don't ...
Captial gain on inherited business/rental property	4/4/2009
Q: I am trying to sell a business & rental property I inherited from my sister two years ago. Would I ... A: Thomas, Thanks for your question. Your basis is the FMV as of date of death. This may or may not ...
K1 Reporting for Qualified Accounts	4/4/2009
Q: I purchased several publicly traded ETFs (LP and or LLC) that issue a K1 and I hold the stock in a ... A: Alex, Thanks for your question. A K-1 must be issued by the company in this case. However, if it ...
401k and tax	4/4/2009
Q: I took from my 401k a loan, after that, I been laid-off from my job. Six month after that, due no ... A: Sergio, Thanks for your question. There is not a good scenario. The loan will be treated as a ...
Dod contractor tax exemption law	4/4/2009
Q: I am currently working in Iraq on a year contract and as all of us know it's really hard on our ... A: Daniel, Thanks for your question. Sorry, but there is only one loophole and it doesn't apply in ...
Short sale taxes clarification	4/4/2009
Q: I'm divorcing and need to sell my home. I am insolvent and not able to make the payments with my ... A: Marci, Thanks for your question. If you are both on the title, you are both liable for any tax on ...
Dependent Exemption	4/4/2009
Q: I am 23 and completed college in April 2008 at which time I obtained a full-time job. Should my ... A: Gail, Thanks for your question. They cannot claim you. In order for them to qualify to do so, you ...
1099-misc box 7 is not for services rendered	4/3/2009
Q: I am a medical student and participated in a preceptorship program last summer where I shadowed a ... A: Mark, Thanks for your question. The 1099 is correct. Box 7 is for more than "services rendered." ...
Capital gains	4/3/2009
Q: I am a CA resident and have large LT capital gains in 2008 from sale of property in Arkansas in the ... A: Robert, Thanks for your question. No options, it must be reported to both states. You will file ...
Company/Stock Merger Reporting	4/3/2009
Q: Question about how to report the cash received from a company merger. I held share in Company A ... A: Rick, Thanks for your question. Total the fair market value of the stock received and add it to ...
Selling condo owned less than 2 years	4/3/2009
Q: In this economy, I'll probably sell for less than what I bought it for. Can you help me understand ... A: Dave, Thanks for your question. If you sell if for less than your purchase price, there will be no ...
Open estate 2nd tax return?	4/3/2009
Q: My mother died October 2007. I am executor and the will stated her four children should inherit ... A: Barbara, Thanks for your question. First, to clarify a point. You stated that you filed "another ...
S-corp and personal taxes	4/3/2009
Q: My spouse is partner of an S-Corp. The corporation files an extention. Can we file our personal ... A: Tracy, Thanks for your question. You can file now, but you would have to file an amended return ...
claiming my brother	4/3/2009
Q: i want to know is it okay to claim my brother, (who is 22) when i file my taxes? he has no income at ... A: Danja, Thanks for your question. You can take a dependency exemption for him if all of the ...
Fees for church facility and tax implication	4/3/2009
Q: I am part of a committee at my church working on updating and expanding a policy manual for the ... A: Troy, Thanks for your question. Changing the terminology from "fees" to "suggested donations" is ...
tax liability on reimbursements	4/3/2009
Q: My wife travels for work and often has to purchase, software, equipment, misc. items for the ... A: Bill, Thanks for your question. Absolutely not. Since she turns in an expense report (with ...
Interest earned on kids custodial account	4/3/2009
Q: Are the interest earned on kids custodial account taxable? ANSWER: Sharmi, Thanks for your ... A: Sharmi, If the income per child is $1,700 or less they will not need to file. If more than that, ...
Taxes on Roth IRAs	4/3/2009
Q: I get a form 1099 for each of the accounts I have in Roth IRA. These forms list the dividends paid ... A: Alan, Thanks for your question. Dividends paid on investments in Roth IRA's are not taxable and do ...
LLC rental income and capital gains	4/3/2009
Q: I purchased a property in 2008 for $60k and titled it in an LLC. I maintained records showing all ... A: If the rental activity is the only activity for the LLC, you do not file a Schedule C. I would have ...
LLC rental income and capital gains	4/3/2009
Q: I purchased a property in 2008 for $60k and titled it in an LLC. I maintained records showing all ... A: John, Thanks for your question. The rental income retains its character - it is still passive ...
I'm considering making an S-Corp.	4/3/2009
Q: Lets say I have an S-Corp. Scenario A: Corporation X has 50,000 net profit for 2008. A K-1 for ... A: No, you must pay yourself a reasonable salary. Any remaining profit would be taxed as corporate ...
I'm considering making an S-Corp.	4/3/2009
Q: Lets say I have an S-Corp. Scenario A: Corporation X has 50,000 net profit for 2008. A K-1 for ... A: John, Thanks for question. It happened because the salary was paid in a year other than the year ...
housing benefit	4/3/2009
Q: My employer asked me to temporarily relocate out of state in September for a project. The project ... A: Lori, Thanks for your question. If the assignment is for an indefinite period or is for more than ...
Is 1098-T scholarship income taxable	4/3/2009
Q: I am an internation student on F1 and have been in the US for more than five years. So, this year, I ... A: Adi, Thanks for your question. It appears that some of your scholarship/grant money was used for ...
land sale	4/2/2009
Q: John, I am a resident of California and I sold a piece of land in Missouri this year. I paid 2000 ... A: Because the land is physically located in the state and there is no question about them having nexus ...
Cancellation of Debt...Credit Cards	4/2/2009
Q: My husband and I just received a letter from the IRS regarding a Credit Card that did a ... A: Desiree, If the debt was canceled, you have income from that debt cancellation. It should be ...
Non-dependent support	4/2/2009
Q: I provide living expense support for someone who does not qualify as a dependent (non-relative) and, ... A: Melinda, Thanks for your question. If you provide over half the support, the person lives in your ...
State residency for tax purposes	4/2/2009
Q: My daughter was incarcerated in a Wisconsin Institution in Feb 2008. I live in Idaho and am her ... A: Robert, Thanks for your question. Since she was a resident of WI prior to incarceration and is in ...
land sale	4/2/2009
Q: John, I am a resident of California and I sold a piece of land in Missouri this year. I paid 2000 ... A: Len, Thanks for your question. Since the land was located in MO, you must file a non-resident form ...
Disability and FICA	4/2/2009
Q: We have a potential employee who receives SSDI and SSI who desires to attempt to return to work. ... A: Kurt. Thanks for your question. He is not exempt from FICA. Actually you are asking the wrong ...
buying a few cows	4/1/2009
Q: My husband wants to purchase a few cows(we already have 6 acres for grazing). My tax advisor says, ... A: B, Thanks for your question. It depends. If it is considered a hobby, you can deduct expenses up ...
Form 1041 - capital loss passed to beneficiaries	4/1/2009
Q: I'm filling a 1041 for an estate. All the stocks were sold 2 months after death of the owner. There ... A: Anna, You are correct, you are limited to deducting $3,000 of capital losses on the 1041. Any ...
401k	4/1/2009
Q: I'm 63 yrs old, I'd like to withdraw the majority of my 401k funds to pay off my mortgage. Is it ... A: Jim, From a tax standpoint, you can make that withdrawal. Depending on the amount withdrawn and ...
Mileage Reimbursement for Weekend Work	4/1/2009
Q: If a salaried employee works a full week (40 hours) and then has to come in the weekend to do some ... A: Michael, Thanks for your question. The IRS does not allow commuting mileage to be deducted or ...
tax exclusion	4/1/2009
Q: My husband is working in Iraq (for last 12 1/2 months). I understand the tax exclusion for the ... A: Tanya, Thanks for your question. The qualification to be physically present in a foreign country ...
overseas mission worker with US income	4/1/2009
Q: I work for a mission at an overseas location. I normally file my taxes as self employed. I ... A: Jeremy, Thanks for your question. As a U S citizen you are required to pay tax on your worldwide ...
LTD repayment from SSDI for previous year	4/1/2009
Q: I have read the publications about disability payments as well as spoken to some tax "preparers", ... A: Ali, Thanks for your question. An amended return is not possible, as the amount was refunded in ...
dependent minor tax exempt?	3/31/2009
Q: Hey there. Okay several questions, sorry but I'm pretty much in the dark on every topic. I turned ... A: Nick, Thanks for your question. Your age has nothing to do with your tax liability. Just because ...
Partnership expenses	3/31/2009
Q: We are a partnership /me and my husband/ and do our business at home. In our personal income tax ... A: Yonka, Thanks for your question. You cannot deduct those expenses on the 1065. However, since the ...
owed taxes	3/31/2009
Q: i was trying to find out if there is a way to make payments on taxes owed. i mean i have not been ... A: James, Thanks for your question. Yes, you can arrange with the IRS for installment payments. You ...
qualified tution related expenses	3/30/2009
Q: My employer contributes for me to attend school. I have to pay whatever my employer doesn't cover. ... A: Darnell, Thanks for your question. The 1098-T amounts are not taxable. The amount on 12a depends ...
Short Sale Tax Laws for 2008	3/30/2009
Q: I was told that there was a short sale law again this year, but wasn't sure if we could get a break ... A: Shari, Thanks for your question. The law only applies to your principal residence, there is no ...
Donor and recipient gift tax	3/30/2009
Q: I would like to gift my daughter money or a piece of rental property valued at over the $12,000 tax ... A: Sylvia, Thanks for your question. The limit for the annual exclusion is now $13,000. In addition, ...
Educationl Tax Deduction	3/30/2009
Q: I was informed this year by our tax consultant my wife and I will not be able to deduct the tuition ... A: James, Thanks for your question. Unfortunately, your tax consultant is correct. The phase out for ...
SSDI and Childcare	3/30/2009
Q: I am on SSDI. I worked PT in 2008 providing childcare for a family. It was on a cash basis, but the ... A: Crystal, Thanks for your question. You file an amended return Form 1040X, reporting the income on ...
Gift or Income?	3/30/2009
Q: My husband's employer, after selling the company gave him $100,000 with instructions that it is ... A: I realize that your husband is not self-employed, but it the company does not treat this as wages, ...
1099 Question	3/30/2009
Q: I am a 1099 Independent Contractor, and I had my sister help me with clerical office work for a few ... A: Becky, Thanks for your question. If she is doing clerical work for you, she probably should be ...
roth ira excess contribution	3/29/2009
Q: Apparently, I have made an excess Roth IRA contribution because I got married in 2008 and am ... A: Kadie, As long as you do not withdraw the excess contribution, you will owe the 6% tax every year. ...
Gift or Income?	3/29/2009
Q: My husband's employer, after selling the company gave him $100,000 with instructions that it is ... A: Frances, Thanks for your question. Yes, you should have received a W-2 as that is taxable income. ...
1099-A	3/28/2009
Q: I receive a 1099-A form from my lending company this year because of a foreclosure on our primary ... A: Jason, Thanks for your question. The 1099-A is not just a notice it is a form that is reported on ...
Married Filing Separate Returns	3/28/2009
Q: What are requirements for splitting 1099 income reported to joint owners (married to each other) ... A: Gerald, Thanks for your question. Any income in the name of the spouse should be reported by that ...
Tax on merged company stock	3/28/2009
Q: Canadian company FDG was merged with Canadian TCK last year. For each FDG share, I received $82 cash ... A: Lee, Thanks for your question. You will need to allocate original basis in the stock between the ...
Estimating Past Home Improvement Costs	3/28/2009
Q: I recently sold my home of some 40 years. I have records of significant major improvements but know ... A: Bob, Thanks for your question. No, you cannot simply add an annual amount to your basis. All ...
Pet-Sitting Income	3/28/2009
Q: I have tried to do some research but still have some confusion. Should I report income from ... A: Janet, Thanks for your question. Yes, that is taxable income. You should report it on Schedule C, ...
Clergy Tax Questions	3/28/2009
Q: 1) I have received over $400 of ministry income for 2006, 2007 and 2008- so according to the two ... A: Ryan, Thanks for your question. Yes, you have waited too long to file 4361 for an exemption. No ...
Self-employed Health Insurance Deduction	3/28/2009
Q: I am not sure whether I qualify to take the Self-employed health insurance deduction on line 29 of ... A: Gary, Thanks for your question. The rules state that the insurance must be established by the ...
Federal tax	3/28/2009
Q: I would like to know if I was to marry someone and my SS# showed upon their income tax return, would ... A: Cindy, Thanks for your question. The other party would only be liable for your past taxes if they ...
Redemption vs Dividends Distribution	3/28/2009
Q: What is the difference in the amount of Fed/State taxes paid in Redemption of Shares for cash verses ... A: James, Thanks for your question. With a redemption, you are treated as selling the shares, so you ...
Foreign Income Exclusion	3/28/2009
Q: John.... My ques: I am a W2 Consultant with a private company, supporting the US Army/DOD in ... A: Shawn, Thanks for your question. Probably not. In order to be eligible for the exclusion, you ...
deed in lieu of foreclosure	3/27/2009
Q: my house is in pre-foreclosure and i would like to do a deed in lieu of foreclosure where i give the ... A: Ervin, Thanks for your question. Based on that information, you would owe no taxes on the ...
Federal Tax Withholding	3/27/2009
Q: This question is about the withholding of federal taxes from my check. There is very little being ... A: Diana, Thanks for your question. It all depends on your filing status, the number of withholding ...
Monhtly deducation determination	3/27/2009
Q: John, I was in the Military for the past 10 years and recently got out. I just received my first ... A: Damian, Thanks for your question. That sounds about right, depending on your filing status and the ...
Gift vs Loan	3/27/2009
Q: If we are given $60,000 that we return in full within the year, will the donor need to pay gift ... A: No, that's not what I said. I said that if it is given with any strings, such as the expectation ...
Gift vs Loan	3/27/2009
Q: If we are given $60,000 that we return in full within the year, will the donor need to pay gift ... A: Ellen, Thanks for your question. The problem with your scenario is that a gift, by definition, is ...
Rental Property Deductions	3/27/2009
Q: I have a question that I hope you might be able to address. I apologize in advance for the length ... A: Clint, Thanks for your question. As far as the truck is concerned, you can take a depreciation ...
Balloon loan to settle estate	3/27/2009
Q: How will I be taxed if I accept part of estate settlement(part of which is my stock in a family ... A: Jane, Thanks for your question. You will be treated as having sold the stock to the estate (or ...
LLC	3/26/2009
Q: We have an LLC and purchased a commercial building that is rented. There was a privately held ... A: Ken, Thanks for your question. First, an interest-free loan will not fly with the IRS. If you ...
Primary Residence and Required Occupancy	3/26/2009
Q: I have a federal job that requires I live in federal housing. I have to pay rent for this housing. I ... A: Julie, Thanks for your question. No. In order for it to be your primary residence it must be ...
taxes and incarceration	3/26/2009
Q: My boyfriend worked while in a prison related bootcamp and in a work release program once he got ... A: Michelle, Thanks for your question. None of those earnings are used in figuring the earned income ...
dependent	3/26/2009
Q: i have a son, whose income for 2008 is $9000. He is 22yr old and is a full time student at the ... A: As I stated in my previous answer, if he is a full time student under age 24 there is no limit to ...
Personal business startup	3/26/2009
Q: My wife and file jointly - simple enough. We are in the process currently of starting a small ... A: Scott, Thanks for your question. As an LLC owned only by spouses you can file a 1065 partnership ...
rental question	3/26/2009
Q: I co-own a townhouse with my daughter (she is on deed and mortgage loan). She lives in the house ... A: Dianne, Thanks for your question. Your daughter can deduct 1/3 of the mortgage interest. The ...
Rental Property?	3/26/2009
Q: In 2007 my wife and I bought a home for my mother to live in. Because she is on a fixed income, my ... A: John, Thanks for your question. Your CPA filed that improperly. Actually, what you have is what ...
Social Security Taxes	3/26/2009
Q: When can I stop paying s.s. taxes? I am a pastor and have paid for over 40 years. Can I simply stop ... A: Ron, Thanks for your question. You can stop paying s.s. taxes when you stop having earned income. ...
Tax Question Regarding 1098-T	3/25/2009
Q: I graduated in May 2008 (Spring semester) and have not received a 2008 1098-T form from my school ... A: If it was paid in 2008 for 2008 and not previously deducted you can use it for 2008. However, the ...
Amended W2	3/25/2009
Q: I received an incorrect wage amount on my w2. Spoke to my employer who then issued me a new w2 with ... A: Debbie, Thanks for your question. It should not be a problem. Most likely your employer has not ...
New Stimulius tax break	3/25/2009
Q: With less federal tax being taken out of my check because of the stimulius plan, will that affect my ... A: Lynne, Thanks for your question. You are very perceptive. The withholding rates have been ...
Tax Question Regarding 1098-T	3/25/2009
Q: I graduated in May 2008 (Spring semester) and have not received a 2008 1098-T form from my school ... A: Mike, Thanks for your question. Normally, if the 1098-T showed tuition for a term beginning the ...
TAX	3/25/2009
Q: I have been going to h&r block offices for the past years for taxes. They also have online tax ... A: Jess, Thanks for your question. Block can handle fairly simple returns. Online, as I understand ...
hold up at IRS	3/25/2009
Q: I am divorced from my husband as of Feb 20 '09. We were supposed to file separate, but it appears ... A: Krystie, Thanks for your question. You say you have two income tax papers filed on you - I assume ...
Schedule C vs 1120S	3/25/2009
Q: As an S-Corporation, what are the (dis)advantages of filing a Schedule C versus an 1120S? What are ... A: Dave, If you have a corporate charter, you do not have the option of filing a Schedule C. A ...
education loans	3/25/2009
Q: I am over 55 and went back to school. The IRS allows for expenses for equipment and educational ... A: William, Thanks for your question. Qualified education expenses for Form 8863 include tuition and ...
First time Home Buyer Tax Credit	3/25/2009
Q: Have owned and lived in a mobile home for 13 years. Just purchased (2009) and have moved into a ... A: Howard, Thanks for your question. No, you do not qualify. The law specifies that a first time ...
$8000 tax credit	3/25/2009
Q: John, I am planning on buying a new home soon and I qualify as a first time home buyer. I believe ... A: Steve, Thanks for your question. I am not sure what you mean by "Will this $8000 tax credit ...
Sale of inherited house	3/24/2009
Q: I have been trying for over a month to get a definitive answer to my question. The answers I've ... A: I am basing my answer on 30+ years of tax preparation in which the loss was allowed every time. ...
Foreign Travel - Per Diem	3/24/2009
Q: Can a self-employed individual charge to expense the federal perdiem rate for Lodging and M&IE for ... A: Mark, Thanks for your question. You can use a per diem for meals. The IRS does not allow a per ...
Education: Itemized Deduction vs Tuition Credit	3/24/2009
Q: I work in the legal field and part of my job includes dealing with tax investigation litigation. I ... A: Paul, Thanks for your question. You cite Form 8817. I think you mean 8863. If the courses do ...
Sale of inherited house	3/24/2009
Q: I have been trying for over a month to get a definitive answer to my question. The answers I've ... A: Marie, Thanks for your question. The loss is deductible. I've done it many times over the years. ...
1099-misc for medical expense	3/24/2009
Q: We had a settlement with my school district. It had agreed to pay half of my son's special education ...