Tax Attorney – Frequently Asked Questions

My sister-in-law and me agreed that I will provide child care for two of my nephews. My sister-in-law will be paying me for the task. Is the pay something which can be considered taxable?

How is tax evasion punished?

A foreign government is paying me for my services. Am I required to pay taxes considering that it is the foreign government itself that is paying me and not its citizens?

For how long should I keep copies of my tax records?

Can federal tax and CA tax returns be amended? If so, until when?
Can a taxpayer amend previous year tax return after they received an award of disability? Taxpayer has been deemed 17% permanently disabled and they are still working for the State prison system. They would like to amend both Fed. and Ca. state back tax years for the 17% workmans comp. that they believe is nontaxable to them. Thank you for your time on this.

The franchise tax board claimed that I owe them taxes that were already due 12 years ago. I don’t have any proof that I did not pay nor I paid. Is it still legal for them to damand taxes from me?

Two years ago, i made a $75,000 income. On the year that followed, I did not work and was supported only by my father. From then on, he gave me money every month. Were the money given to me by my father to be considered as income or a gift? How should that be treated? I am about to file my state and federal taxes.

What should be done if a mother gives a monetary gift amounting to $100,000 to her son for a home purchase considering that she earns a monthly limited income? What are the tax implications for the mother?

My business was closed sometime in the middle of last year but the corporate dissolution is still ongoing up to now. Am I still required to file 2010 tax for the business?

The last pay period for last year was not included by my employer on my W2’s. After I was informed on the matter, they suggested that my tax files will be amended free of charge by the new book keeper. My spouse and I agreed to have our files amended by our own tax preparer and not by the new book keeper of my employer. However, we will have to pay our tax preparer $150. My employer is now telling me that I will have to shoulder the expenses if the amendment will be done by someone other than his own book keeper. Is my employer correct? Is it not that since it is their mistake, the expenses for the amendment should be his liability?

My tax preparer submitted my tax returns without my permission. I am now facing an enormous tax liability that I have to consult a cpa for help. What should I do?

I am doing trade through a website and an offshore account. I am not however provided with tax directions or relevant forms for tax purposes. How should the offshore account as well as the gains or losses which might be incurred from the trading activities be dealt with? 1040 forms asks for offshore accounts should there be any. I am not certain on how to deal with it.

Is a $50k gift from my father to be considered as income for me in my tax returns?

I am about to be added to my parents property deed. Shall it be considered as income in my tax return this year?

I live in California… where many citizens grow marijuana. Our newspaper wrote that it is not illegal for growers to sell to a dispensary, but I’m wondering what, if anything, is in place to ensure that the income generated from these transactions are reported and taxed upon. Do the dispensaries have any legal obligations? Our citizenry is tormented by this plight. Awful skunk smells permeate our community for 5 months of the year… crime increases… etc. I believe this question touches on both tax law and criminal law, so please address both.

I used to file joint taxes with my husband when were still married to each other. In one of those years, particularly in 2006, tax was paid in excess. In 2007, the IRS refunded a portion of the tax paid and deposited them in his account. We got divorced. Am I entitled to a portion of the refund?

Should I tell the IRS about the chapter 7 bankruptcy that I filed this year when I go to file tax returns?

My mother died last year and so we decided to sell her home. Recently, It was bought. What will be my tax liability for the inheritance coming from the sale of the home?

Can the IRS seize my bank account for the tax lien that I do have?

After being away for a couple of months, I went home and found myself wondering what happened to my house that was broken into and where my personal properties had gone. Later, I found out that my home was sold for back taxes. They sold it without even informing me. I did not receive any notice at all nor did they care drop a even a simple one in the post office box that I have been using for two decades. They just told me they did not know where I was. When I tried to recover my personal properties, the people who bought my house tried to make me sign a document that will serve as my waiver that will release them from liability for the items that are missing. I did not sign the documents. Now that I am insisting, they just told me to bring the matter to court. What should I do?

My grandmother died. Her daughter, my mother, wants to transfer the house of my grandmother to me. Is there a way to avoid taxes for that? We already created a trust.

I invested $100,000 in a U.S. film production. The money comes from my traditional IRA. For this year, I probably will not incur any taxable income from my investment as the film is still in its production stage. My investment started with a craigslist advertisement for film financing. On that ad, they said that they have a million dollar in cash but needs another million to finish the film. It was further stated that the second million will have a 30%tax break before the production begins. I am now curious as to how the 30% tax break will be gained on my investment.

Which would be more convenient for a real estate broker like me who wants to open a franchise office, to incorporate by having a C or an S corporation? Here in my state, I cannot incorpoporate as an LLC. My household falls on a high tax bracket.

Am I still under obligation to pay US income tax if I change citizenship?

I earned a lot last year through capital gain that I now owe the IRS over $40,000. However, I have been unemployed since the last year too. I asked for a tax extension and used the capital gain for two low budget films that are not yet distributed. As of now, they are the only assets which I do have that has equity in them because my house as well as my rental property has more mortgage balance compared to their corresponding market values. So, in short, I am in the state of bankruptcy and is trying to figure out whether to offer the IRS a compromise or an installment agreement. What should I do?

I owe the IRS a big amount of money. I am getting married and I want to know if my liability to the IRS would affect the man I would marry. Would it make an advantage if I wait until the debt is paid off before I change my name?

I already have paid my tax debt. The lien however is not yet removed from public records. And what makes it worse, that same lien appears in several counties I have not lived at all. What should I do to make that lien disappear?

I cannot afford to pay my tax to the IRS. I owe more than $20,000. It would take so many years to complete the payment if I offer installment payments. Do I need an attorney for this?

I took a student loan in 1987. The debt had been completely paid. However, last year, I started receiving a demand letter as well as phone calls trying to collect on defaulted student loans. I told them that the loan was already paid off. Instead, they tried to make me sign a promissory note. I protested and did not sign. The next thing I know is that they took my income tax return as well as an amount that I earned and tried to rely on considering that I am not employed at this time. I searched my records and recently found proof that I already have paid. I also found on my credit report that the loan was defaulted. Now that I found the proof, what should I do to recover the money as well as clean my credit?

Should I be reporting the money I earn from helping an elderly relative as income when I file for taxes? A family member is paying them to me. I would also like to know if it will have a bearing on my plan of filing bankruptcy. Thanks

At 90 years old, my mother has more or less $350,000 in multiple conventional 6 month CDs. That is all that she has without including furnitures. All the money is in her living trust with me and my only brother instituted as beneficiaries. I understand that there are tax changes in 2011. If she passes, how would the tax changes affect the mentioned amount? Would it make any difference it she will just give us the beneficiaries a check amounting to exactly half of the entire amount?

I am new here in California and I intend to continue working with the same Texas-based company. However, this time, I will not be working with them as a regular employee but as an independent contractor. How should I make this here in CA?

My own federal tax return was filed months ago. Until now, I have not receive the return. Is there anything I can do to speed up the process? If the taxpayers are under obligation to file at a certain date, is the IRS under the obligation to respond with taxpayers return at a definite date too?

Liens are filed against us by the IRS. My husband inherited a sum of money just recently and wants to buy a new home. If he does, would the home be attached?

I would like to start a non-profit org comprised of youth soccer leagues in poorer areas for underprivileged children from ages 6 – 13. I’d work with all the elementary schools in my area and have volunteer coaches but paid referees. I would like to start this here in Los Angeles, CA, then hopefully spreading out to other cities and eventually in other countries, is this possible? I was told i needed a lawyer to start a non-profit org. is this true? Can you tell me what forms i need and maybe a quick rundown of the process? Is it possible to start a non-profit in the US that helps children in other countries?

I intend to donate a portion of my land temporarily to a non-profit organization. This non-profit organization is going to cultivate the land and maintain a crops-producing garden. The products, in turn, shall be donated to local charitable institutions. Tax wise, how would that benefit me?

What is the least expensive way to bring money from a real estate transaction in Chile to the US? I understand that I can gift family members $10,000 each without paying taxes, but I don’t know how to get the money here. I’ll be flying to Chile to make the transaction but think I can bring it all with me.

It has been weeks since I mailed my tax returns for 2007 to the IRS. After a visit to the IRS website, I realized that I entered wrong figures. How can I correct it?

My accountant gave me a wrong advice. To whom should I go for proper advice?

Together with my sister, I inherited a real property. We did not know that at that time, the same property was subject to a step-up basis. We agreed to roll the property over through 1031 exchanges. The rolling over was done several times. The property was sold after a couple of years and we decided that our tax returns be prepared by a professional. The fact that the initial property was inherited was known to the accountant. However, he prepared a tax form which burdened us with capital gains treatment in full. Do we still have a chance to correct this?

How much money can a boyfriend give as gift to a girlfriend without any tax liability?

In 2010, I received $10, 745 for benefits under LC 4850 . The amount was not written on my w-2 but was reflected on my wages. How should the 4850 income be reported to make it free from taxes? I presume that taxes had already been paid for this amount.

The house which was supposed to be my primary residence was foreclosed. The funds which is supposed to be used to continue building the house were also frozen. What I understand is that, under the law, the debt is forgiven. Is the interest amounting to about $90k that they charged me deductible?

Through a family trust, I will be inheriting properties from my grandparents. Will there be a property reassessment which will result in a large increase of the property tax. How do we avoid this?

I heard that there is a law allowing disabled people to file their taxes late without being subject to penalties. I am just not sure how that works or what the law really says. My question is, if the disabled has not filed his taxes for 2009, how should he file it now?

I used as rental the house which I inherited from my parents. I lost the same property in a foreclosure. From the time of the foreclosure up to today, I cannot contact the lender in any way and I have tried several times and means to obtain information for my tax return. I informed the IRS that my return is ready except for the information that I needed from the lender. The IRS, in turn, told me that I could contact them later but I shall pay penalties if I owe taxes. It is not fair that I will be made to pay penalties as a consequence of the negligence of the lender. I intend to fill out a form for insolvency and I do not know anymore which is which because of the entire situation. What is there that I should do?

Through the life estate of my father, I inherited a home and a condo unit. These properties were passed to me 2 years ago. The values of these properties increased such that the condo is now worth about $120,000 and the home about $300,000. A Reassessment Exclusion for Transfer between Parent and Child was done and the two properties qualified in each county where they are located. For now, I am not receiving any income except those that comes from the S.S. which amounts to about $600 per month and a bank interest. I am thinking of selling either or both of the properties I inherited, so, I am interested to know the tax consequences. Should I be successful in selling them, what would be the tax implication considering that I have two residences and equally split a year living in each of these residences?

There will be a short sale. That would mean I will be owing a lot of money and a 1099 c form will be on its way. There are two other properties which I own and I probably will be having a divorce this year. So, forward direction is foggy and I am not sure which direction to go.

My parents sent me $3000 from overseas for about 4 times. Would that make me liable for taxes? I heard somewhere that there is no tax liability if the amount does not exceed $10000 in one time. Is that correct?

I sold some properties in my country and the money is going to be transferred to my new business bank account so I can start my new business here in CA. If I am under obligation to report this amount of money to the IRS, what form would I be needing? Am I bound to pay taxes for this?

Me and my brother are going to inherit some real estate. How would that be affected with my back taxes?

I submitted an amended tax return for 2007 sometime in July 2010. It is now 2011 and I have not received any feedback yet from the IRS. It is unclear what awaits me and how do I solve them. Any idea?

I plan to give some of the money which I got from my husband’s insurance as his beneficiary. Am I required show something to the IRS after giving the money?

I was the beneficary to my husbands life insurance. I would like to give some of the money to my sons. Do I need anything in writing to show this as a gift.

I am divorced and is currently having a joint custody for our child with my ex husband. We don’t have any stipulation concerning our taxes on our divorce papers. Our daughter stays with me most of the time. I want to claim my daughter on my taxes and my husband is also claiming her. Who between us is entitled to claim, me or my husband?

I am divorced. My ex husband and I have joint custody of our daughter,however, she lives with me over 60 percent of the time. We did not specify anything regarding taxes on our divorce papers. I was informed that I am intitled to claim her on my taxes,however, he insits on claiming her. Who may legally claim our child?

How long am I required to keep the mortgage documents showing refinancing agreements with another company?

how long do you need to save your mortgage papers if you refinanced with another company?

I obtained a judgment against a company. Apparently, I cannot collect from them anymore because all their bank accounts were closed and assets had been transferred. Should I indeed not be able to collect, will there be any available tax provisions which will provide me with some relief or advantage?

Me and my ex wife separated in December 2010. However, she only took custody of our two kids by February 2011 and the kids live with me until that date. Is she legally allowed to claim our two kids on her tax return?

We are a software company that provides service and does business all over the U.S.. To start the service, we sell a license to customers first. Do we have to charge sales tax for that? Our office is in California.

I lost an investment real estate property last year. A 1099-A form was sent to me by the bank which foreclosed the property for the amount of the remaining balance. Will I have to pay taxes on that money?

The person I intend to marry owes the IRS a a large amount of money. Would the IRS have a reason to take my returns, sell the house that I own, or garnish my wages after I marry her?

We incorporated our fraternal society in Alabama as a non-profit corporation. We are planning to expand our activities in California. What are required of us by the State of California to make our activities legitimate? Are dues which we shall collect by reason of those activities subject to taxes?

A psychologist friend of mine consults a psychotherapist for her own mental health. Can the amount which she pays to the therapist be deducted on her schedule c against her gross earnings by having the therapist as a consultant? The therapist treats her just like any other patient.

We do body piercings in the tattoo parlor that I own. I buy jewelries but do not sell them as I only include them with the piercing. Am I liable to pay sales taxes for those jewelries?

I have been spending most of my time working in Alaska since the last 5 years. Since I got divorce last January, I only come to California after every two months and spend two weeks with my two children who are aged 17 and 20. We usually spend those two weeks travelling out of the State together. My ex spouse got my home as a consequence of the divorce, so, basically, I do not have a legal home. The situation makes me contemplate of claiming Alaska as my residence. Can I legally do this for tax purposes?

Since the last two years, I work at home as a freelancer who takes projects every once in a while and is paid by 1099 from different people who hired me. Someone told me that I have to file self-employment taxes. Is he correct? I have been paying regular taxes but not the self-employment taxes because I am not aware of the latter when I paid the former. What should I do? I intend to apply for citizenship and is afraid that at the time I do it, authorities might ask and find out about that problem.

I am indebted for about $400,00 to the government for taxes. The amount which will be accumulated if we sell our house as well as other things that we own cannot cover the entire liability. Will bankruptcy help me with this?

How do I place my own home into a living trust without loosing proposition 13 that I have had for a couple of years now?

My parents are going to loan me $80,000 while my parents-in-law are going to loan me $86,000. Should I set up two loans or just set up the loan up to the total amount and just another lender for taxation purposes?

I am in a chapter 13 bankruptcy plan since 2009. However, there is still a balance of about $28,000 and I called the IRS about it. The insolvency department of the IRS told me that they are going to file alien against me and send the relevant letter to my employer. I am working in the security field with some employers running credit reports. So, the letter which the IRS is planning to send is going to be prejudicial on my part. Can they really do that? Would it be legal for them to do that?

A piece of land was sold. The buyer then split it into two parcels and sold them again. The liens which existed since the original seller were not paid. The buyer who resold it did not pay the liens too. The city was not remiss in making special assessments. Is the city still entitled to relief?

What is this concept called transfer price planning?

The company that my husband incorporated has not been operational since 2007. He also failed to dissolve it. The state of California has been asking for the tax returns and fines for not filing. The company does not have any asset. Its bank accounts are also closed. Can the state make him personally liable for the minimum tax as well as the fines?

Me and my friend are going to form an online business. Through it, we will sell imported clothes to distributors. To get the business running, one of us has to live in China. So, now, we are choosing between having a partnership or an LLC. What is the difference between the two when it comes to tax write write offs? Are we able to write off in either case the living and traveling expenses that will be incurred in China?

At the moment when the value of the gold goes up to something like $80,000 from $52,000 when I bought them, would I be liable for capital gains tax?

How can I make a settlement with IRS? There was an unintentional various income omission in my 2004-2006 tax filings prepared by an independent tax preparer.

I am one of those who prepare their own tax returns. A notice for an audit has been set to me. How do I prepare for this kind of stuff? Do I need to be represented?

A lot of numbers on my tax return was erroneously made by my tax preparer. As a consequence, I received a letter from the IRS demanding from me back taxes, interests, and penalties. Who should be liable here for the interests and penalties, is it me or my tax preparer? What recourse can I make against my tax preparer?

Shall I pay taxes if I am going to inherit money? If so, shall it be federal or to the state only? Or to both of them?

About 4 or 5 months ago, I received a notice of audit. I immediately consulted my tax preparer on the matter and she told me that she is going to contact me as soon as the need arise. I have not heard anything from her since then and so I assumed everything was alright until I received a notice with a demand for me to pay more than $5,000. I found out that my tax preparer totally forgot about my audit letter and did not work on it. Isn’t she liable for something?

My wages were garnished by the IRS but my employer is not sending the money to them. I am now in default. Can I sue the company for the entire sum considering not all of the amount were deducted in the payroll?

My sister died and my parents sued the doctor who treated her for wrongful death. Is the settlement that was accepted taxable?

I would like to start an LLC in Nevada for a bunch of websites that I own. All these websites operate independently. I operate these websites without leaving the computer. Should I decide to leave in California, will I be legally required to register the LLC with the State and pay only the annual minimum fee? The website will be hosted in Nevada and all the money which shall be acquired shall also be received in the banks there. I will not be receiving phone calls or emails concerning the business while in California.

We have just moved from New York to California. We are thinking of moving our incorporated business here in California but avoiding the necessity of New York tax returns. How do we do that? We already checked the website of the Secretary of the State of California but has not found anything useful.

My S Corporation here in California has gone out of business. I understand that I have to file the dissolution of the same corporation with the Secretary of State. I was informed that a dissolution cannot be filed if the corporation is suspended. The corporation was suspended last year. What should I do to make sure putting on official record that the business no longer exist?

Hello, I had a California S Corp that went out of business. I have learned that I need to file a Dissolution of the S Corp with the Secretary of State. But I have also learned that if it has been suspended, which it was last yr. then the Dissolution cannot be filed? Please advise how I can make sure that it is recorded that this business no longer exists. If it has been suspended am I still required to file Dissolution? If so, what do I need to do to make that happen?

Taxes on a college account

I have a UTMA account in my name, established by my grandparents for college.

Who is responsible for taxes on the account?

I won some money in gambling and that is the only “income” I have. Do I have to pay taxes for it? The winning did not exceed $10,000. There is also this amount, about $200,000, which I will be receiving from the trust of my mother who just passed away. Shall I be taxed on this inheritance too?
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My mother hired attorneys who are experienced in collecting claims on death by asbestos after the death of my father. For compliance with the necessary documentation requirements, a debt of about $6,000 was incurred. Some of the companies involved offered settlement. Will the money that these companies pay be considered as taxable income? If yes, can the expenses be deducted?

My sister-in-law and me agreed that I will provide child care for two of my nephews. My sister-in-law will be paying me for the task. Is the pay something which can be considered taxable?

How is tax evasion punished?

A foreign government is paying me for my services. Am I required to pay taxes considering that it is the foreign government itself that is paying me and not its citizens?

For how long should I keep copies of my tax records?

Can federal tax and CA tax returns be amended? If so, until when?
Can a taxpayer amend previous year tax return after they received an award of disability? Taxpayer has been deemed 17% permanently disabled and they are still working for the State prison system. They would like to amend both Fed. and Ca. state back tax years for the 17% workman’s comp. that they believe is nontaxable to them. Thank you for your time on this.

The franchise tax board claimed that I owe them taxes that were already due 12 years ago. I don’t have any proof that I did not pay nor I paid. Is it still legal for them to demand taxes from me?

Two years ago, i made a $75,000 income. On the year that followed, I did not work and was supported only by my father. From then on, he gave me money every month. Were the money given to me by my father to be considered as income or a gift? How should that be treated? I am about to file my state and federal taxes.

What should be done if a mother gives a monetary gift amounting to $100,000 to her son for a home purchase considering that she earns a monthly limited income? What are the tax implications for the mother?

My business was closed sometime in the middle of last year but the corporate dissolution is still ongoing up to now. Am I still required to file 2010 tax for the business?

The last pay period for last year was not included by my employer on my W2’s. After I was informed on the matter, they suggested that my tax files will be amended free of charge by the new book keeper. My spouse and I agreed to have our files amended by our own tax preparer and not by the new book keeper of my employer. However, we will have to pay our tax preparer $150. My employer is now telling me that I will have to shoulder the expenses if the amendment will be done by someone other than his own book keeper. Is my employer correct? Is it not that since it is their mistake, the expenses for the amendment should be his liability?

My tax preparer submitted my tax returns without my permission. I am now facing an enormous tax liability that I have to consult a cpa for help. What should I do?

I am doing trade through a website and an offshore account. I am not however provided with tax directions or relevant forms for tax purposes. How should the offshore account as well as the gains or losses which might be incurred from the trading activities be dealt with? 1040 forms asks for offshore accounts should there be any. I am not certain on how to deal with it.

Is a $50k gift from my father to be considered as income for me in my tax returns?

I am about to be added to my parents property deed. Shall it be considered as income in my tax return this year?

I live in California… where many citizens grow marijuana. Our newspaper wrote that it is not illegal for growers to sell to a dispensary, but I’m wondering what, if anything, is in place to ensure that the income generated from these transactions are reported and taxed upon. Do the dispensaries have any legal obligations? Our citizenry is tormented by this plight. Awful skunk smells permeate our community for 5 months of the year… crime increases… etc. I believe this question touches on both tax law and criminal law, so please address both.

I used to file joint taxes with my husband when were still married to each other. In one of those years, particularly in 2006, tax was paid in excess. In 2007, the IRS refunded a portion of the tax paid and deposited them in his account. We got divorced. Am I entitled to a portion of the refund?

Should I tell the IRS about the chapter 7 bankruptcy that I filed this year when I go to file tax returns?

My mother died last year and so we decided to sell her home. Recently, It was bought. What will be my tax liability for the inheritance coming from the sale of the home?

Can the IRS seize my bank account for the tax lien that I do have?

After being away for a couple of months, I went home and found myself wondering what happened to my house that was broken into and where my personal properties had gone. Later, I found out that my home was sold for back taxes. They sold it without even informing me. I did not receive any notice at all nor did they care drop a even a simple one in the post office box that I have been using for two decades. They just told me they did not know where I was. When I tried to recover my personal properties, the people who bought my house tried to make me sign a document that will serve as my waiver that will release them from liability for the items that are missing. I did not sign the documents. Now that I am insisting, they just told me to bring the matter to court. What should I do?

My grandmother died. Her daughter, my mother, wants to transfer the house of my grandmother to me. Is there a way to avoid taxes for that? We already created a trust.

I invested $100,000 in a U.S. film production. The money comes from my traditional IRA. For this year, I probably will not incur any taxable income from my investment as the film is still in its production stage. My investment started with a craigslist advertisement for film financing. On that ad, they said that they have a million dollar in cash but needs another million to finish the film. It was further stated that the second million will have a 30%tax break before the production begins. I am now curious as to how the 30% tax break will be gained on my investment.

Which would be more convenient for a real estate broker like me who wants to open a franchise office, to incorporate by having a C or an S corporation? Here in my state, I cannot incorpoporate as an LLC. My household falls on a high tax bracket.

Am I still under obligation to pay US income tax if I change citizenship?

I earned a lot last year through capital gain that I now owe the IRS over $40,000. However, I have been unemployed since the last year too. I asked for a tax extension and used the capital gain for two low budget films that are not yet distributed. As of now, they are the only assets which I do have that has equity in them because my house as well as my rental property has more mortgage balance compared to their corresponding market values. So, in short, I am in the state of bankruptcy and is trying to figure out whether to offer the IRS a compromise or an installment agreement. What should I do?

I owe the IRS a big amount of money. I am getting married and I want to know if my liability to the IRS would affect the man I would marry. Would it make an advantage if I wait until the debt is paid off before I change my name?

I already have paid my tax debt. The lien however is not yet removed from public records. And what makes it worse, that same lien appears in several counties I have not lived at all. What should I do to make that lien disappear?

I cannot afford to pay my tax to the IRS. I owe more than $20,000. It would take so many years to complete the payment if I offer installment payments. Do I need an attorney for this?

I took a student loan in 1987. The debt had been completely paid. However, last year, I started receiving a demand letter as well as phone calls trying to collect on defaulted student loans. I told them that the loan was already paid off. Instead, they tried to make me sign a promissory note. I protested and did not sign. The next thing I know is that they took my income tax return as well as an amount that I earned and tried to rely on considering that I am not employed at this time. I searched my records and recently found proof that I already have paid. I also found on my credit report that the loan was defaulted. Now that I found the proof, what should I do to recover the money as well as clean my credit?

Should I be reporting the money I earn from helping an elderly relative as income when I file for taxes? A family member is paying them to me. I would also like to know if it will have a bearing on my plan of filing bankruptcy. Thanks

At 90 years old, my mother has more or less $350,000 in multiple conventional 6 month CDs. That is all that she has without including furnitures. All the money is in her living trust with me and my only brother instituted as beneficiaries. I understand that there are tax changes in 2011. If she passes, how would the tax changes affect the mentioned amount? Would it make any difference it she will just give us the beneficiaries a check amounting to exactly half of the entire amount?

I am new here in California and I intend to continue working with the same Texas-based company. However, this time, I will not be working with them as a regular employee but as an independent contractor. How should I make this here in CA?

My own federal tax return was filed months ago. Until now, I have not receive the return. Is there anything I can do to speed up the process? If the taxpayers are under obligation to file at a certain date, is the IRS under the obligation to respond with taxpayers return at a definite date too?

Liens are filed against us by the IRS. My husband inherited a sum of money just recently and wants to buy a new home. If he does, would the home be attached?

I would like to start a non-profit org comprised of youth soccer leagues in poorer areas for underprivileged children from ages 6 – 13. I’d work with all the elementary schools in my area and have volunteer coaches but paid referees. I would like to start this here in Los Angeles, CA, then hopefully spreading out to other cities and eventually in other countries, is this possible? I was told i needed a lawyer to start a non-profit org. is this true? Can you tell me what forms i need and maybe a quick rundown of the process? Is it possible to start a non-profit in the US that helps children in other countries?

I intend to donate a portion of my land temporarily to a non-profit organization. This non-profit organization is going to cultivate the land and maintain a crops-producing garden. The products, in turn, shall be donated to local charitable institutions. Tax wise, how would that benefit me?

What is the least expensive way to bring money from a real estate transaction in Chile to the US? I understand that I can gift family members $10,000 each without paying taxes, but I don’t know how to get the money here. I’ll be flying to Chile to make the transaction but think I can bring it all with me.

It has been weeks since I mailed my tax returns for 2007 to the IRS. After a visit to the IRS website, I realized that I entered wrong figures. How can I correct it?
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My accountant gave me a wrong advice. To whom should I go for proper advice?
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Together with my sister, I inherited a real property. We did not know that at that time, the same property was subject to a step-up basis. We agreed to roll the property over through 1031 exchanges. The rolling over was done several times. The property was sold after a couple of years and we decided that our tax returns be prepared by a professional. The fact that the initial property was inherited was known to the accountant. However, he prepared a tax form which burdened us with capital gains treatment in full. Do we still have a chance to correct this?

How much money can a boyfriend give as gift to a girlfriend without any tax liability?

In 2010, I received $10, 745 for benefits under LC 4850 . The amount was not written on my w-2 but was reflected on my wages. How should the 4850 income be reported to make it free from taxes? I presume that taxes had already been paid for this amount.

The house which was supposed to be my primary residence was foreclosed. The funds which is supposed to be used to continue building the house were also frozen. What I understand is that, under the law, the debt is forgiven. Is the interest amounting to about $90k that they charged me deductible?

Through a family trust, I will be inheriting properties from my grandparents. Will there be a property reassessment which will result in a large increase of the property tax. How do we avoid this?

I heard that there is a law allowing disabled people to file their taxes late without being subject to penalties. I am just not sure how that works or what the law really says. My question is, if the disabled has not filed his taxes for 2009, how should he file it now?

I used as rental the house which I inherited from my parents. I lost the same property in a foreclosure. From the time of the foreclosure up to today, I cannot contact the lender in any way and I have tried several times and means to obtain information for my tax return. I informed the IRS that my return is ready except for the information that I needed from the lender. The IRS, in turn, told me that I could contact them later but I shall pay penalties if I owe taxes. It is not fair that I will be made to pay penalties as a consequence of the negligence of the lender. I intend to fill out a form for insolvency and I do not know anymore which is which because of the entire situation. What is there that I should do?

Through the life estate of my father, I inherited a home and a condo unit. These properties were passed to me 2 years ago. The values of these properties increased such that the condo is now worth about $120,000 and the home about $300,000. A Reassessment Exclusion for Transfer between Parent and Child was done and the two properties qualified in each county where they are located. For now, I am not receiving any income except those that comes from the S.S. which amounts to about $600 per month and a bank interest. I am thinking of selling either or both of the properties I inherited, so, I am interested to know the tax consequences. Should I be successful in selling them, what would be the tax implication considering that I have two residences and equally split a year living in each of these residences?

There will be a short sale. That would mean I will be owing a lot of money and a 1099 c form will be on its way. There are two other properties which I own and I probably will be having a divorce this year. So, forward direction is foggy and I am not sure which direction to go.
My parents sent me $3000 from overseas for about 4 times. Would that make me liable for taxes? I heard somewhere that there is no tax liability if the amount does not exceed $10000 in one time. Is that correct?

I sold some properties in my country and the money is going to be transferred to my new business bank account so I can start my new business here in CA. If I am under obligation to report this amount of money to the IRS, what form would I be needing? Am I bound to pay taxes for this?

Me and my brother are going to inherit some real estate. How would that be affected with my back taxes?

I submitted an amended tax return for 2007 sometime in July 2010. It is now 2011 and I have not received any feedback yet from the IRS. It is unclear what awaits me and how do I solve them. Any idea?

I plan to give some of the money which I got from my husband’s insurance as his beneficiary. Am I required show something to the IRS after giving the money?
I was the beneficiary to my husbands life insurance. I would like to give some of the money to my sons. Do I need anything in writing to show this as a gift.

I am divorced and is currently having a joint custody for our child with my ex husband. We don’t have any stipulation concerning our taxes on our divorce papers. Our daughter stays with me most of the time. I want to claim my daughter on my taxes and my husband is also claiming her. Who between us is entitled to claim, me or my husband?
I am divorced. My ex husband and I have joint custody of our daughter,however, she lives with me over 60 percent of the time. We did not specify anything regarding taxes on our divorce papers. I was informed that I am entitled to claim her on my taxes,however, he insists on claiming her. Who may legally claim our child?

How long am I required to keep the mortgage documents showing refinancing agreements with another company?
how long do you need to save your mortgage papers if you refinanced with another company?

I obtained a judgment against a company. Apparently, I cannot collect from them anymore because all their bank accounts were closed and assets had been transferred. Should I indeed not be able to collect, will there be any available tax provisions which will provide me with some relief or advantage?

Me and my ex wife separated in December 2010. However, she only took custody of our two kids by February 2011 and the kids live with me until that date. Is she legally allowed to claim our two kids on her tax return?

We are a software company that provides service and does business all over the U.S.. To start the service, we sell a license to customers first. Do we have to charge sales tax for that? Our office is in California.

I lost an investment real estate property last year. A 1099-A form was sent to me by the bank which foreclosed the property for the amount of the remaining balance. Will I have to pay taxes on that money?

The person I intend to marry owes the IRS a a large amount of money. Would the IRS have a reason to take my returns, sell the house that I own, or garnish my wages after I marry her?

We incorporated our fraternal society in Alabama as a non-profit corporation. We are planning to expand our activities in California. What are required of us by the State of California to make our activities legitimate? Are dues which we shall collect by reason of those activities subject to taxes?

A psychologist friend of mine consults a psychotherapist for her own mental health. Can the amount which she pays to the therapist be deducted on her schedule c against her gross earnings by having the therapist as a consultant? The therapist treats her just like any other patient.

We do body piercings in the tattoo parlor that I own. I buy jewelries but do not sell them as I only include them with the piercing. Am I liable to pay sales taxes for those jewelries?

I have been spending most of my time working in Alaska since the last 5 years. Since I got divorce last January, I only come to California after every two months and spend two weeks with my two children who are aged 17 and 20. We usually spend those two weeks travelling out of the State together. My ex spouse got my home as a consequence of the divorce, so, basically, I do not have a legal home. The situation makes me contemplate of claiming Alaska as my residence. Can I legally do this for tax purposes?

Since the last two years, I work at home as a freelancer who takes projects every once in a while and is paid by 1099 from different people who hired me. Someone told me that I have to file self-employment taxes. Is he correct? I have been paying regular taxes but not the self-employment taxes because I am not aware of the latter when I paid the former. What should I do? I intend to apply for citizenship and is afraid that at the time I do it, authorities might ask and find out about that problem.

I am indebted for about $400,00 to the government for taxes. The amount which will be accumulated if we sell our house as well as other things that we own cannot cover the entire liability. Will bankruptcy help me with this?

How do I place my own home into a living trust without loosing proposition 13 that I have had for a couple of years now?

My parents are going to loan me $80,000 while my parents-in-law are going to loan me $86,000. Should I set up two loans or just set up the loan up to the total amount and just another lender for taxation purposes?

I am in a chapter 13 bankruptcy plan since 2009. However, there is still a balance of about $28,000 and I called the IRS about it. The insolvency department of the IRS told me that they are going to file alien against me and send the relevant letter to my employer. I am working in the security field with some employers running credit reports. So, the letter which the IRS is planning to send is going to be prejudicial on my part. Can they really do that? Would it be legal for them to do that?

A piece of land was sold. The buyer then split it into two parcels and sold them again. The liens which existed since the original seller were not paid. The buyer who resold it did not pay the liens too. The city was not remiss in making special assessments. Is the city still entitled to relief?
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What is this concept called transfer price planning?

The company that my husband incorporated has not been operational since 2007. He also failed to dissolve it. The state of California has been asking for the tax returns and fines for not filing. The company does not have any asset. Its bank accounts are also closed. Can the state make him personally liable for the minimum tax as well as the fines?

Me and my friend are going to form an online business. Through it, we will sell imported clothes to distributors. To get the business running, one of us has to live in China. So, now, we are choosing between having a partnership or an LLC. What is the difference between the two when it comes to tax write write offs? Are we able to write off in either case the living and travelling expenses that will be incurred in China?

At the moment when the value of the gold goes up to something like $80,000 from $52,000 when I bought them, would I be liable for capital gains tax?

How can I make a settlement with IRS? There was an unintentional various income omission in my 2004-2006 tax filings prepared by an indenpendent tax preparer.

I am one of those who prepare their own tax returns. A notice for an audit has been set to me. How do I prepare for this kind of stuff? Do I need to be represented?

A lot of numbers on my tax return was erroneously made by my tax preparer. As a consequence, I received a letter from the IRS demanding from me back taxes, interests, and penalties. Who should be liable here for the interests and penalties, is it me or my tax preparer? What recourse can I make against my tax preparer?

Shall I pay taxes if I am going to inherit money? If so, shall it be federal or to the state only? Or to both of them?

About 4 or 5 months ago, I received a notice of audit. I immediately consulted my tax preparer on the matter and she told me that she is going to contact me as soon as the need arise. I have not heard anything from her since then and so I assumed everything was alright until I received a notice with a demand for me to pay more than $5,000. I found out that my tax preparer totally forgot about my audit letter and did not work on it. Isn’t she liable for something?

My wages were garnished by the IRS but my employer is not sending the money to them. I am now in default. Can I sue the company for the entire sum considering not all of the amount were deducted in the payroll?

My sister died and my parents sued the doctor who treated her for wrongful death. Is the settlement that was accepted taxable?

I would like to start an LLC in Nevada for a bunch of websites that I own. All these websites operate independently. I operate these websites without leaving the computer. Should I decide to leave in California, will I be legally required to register the LLC with the State and pay only the annual minimum fee? The website will be hosted in Nevada and all the money which shall be acquired shall also be received in the banks there. I will not be receiving phone calls or emails concerning the business while in California.
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We have just moved from New York to California. We are thinking of moving our incorporated business here in California but avoiding the necessity of New York tax returns. How do we do that? We already checked the website of the Secretary of the State of California but has not found anything useful.

My S Corporation here in California has gone out of business. I understand that I have to file the dissolution of the same corporation with the Secretary of State. I was informed that a dissolution cannot be filed if the corporation is suspended. The corporation was suspended last year. What should I do to make sure putting on official record that the business no longer exist?
Hello, I had a California S Corp that went out of business. I have learned that I need to file a Dissolution of the S Corp with the Secretary of State. But I have also learned that if it has been suspended, which it was last yr. then the Dissolution cannot be filed? Please advise how I can make sure that it is recorded that this business no longer exists. If it has been suspended am I still required to file Dissolution? If so, what do I need to do to make that happen?

Taxes on a college account

I have a UTMA account in my name, established by my grandparents for college.

Who is responsible for taxes on the account?

I won some money in gambling and that is the only “income” I have. Do I have to pay taxes for it? The winning did not exceed $10,000. There is also this amount, about $200,000, which I will be receiving from the trust of my mother who just passed away. Shall I be taxed on this inheritance too?
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My mother hired attorneys who are experienced in collecting claims on death by asbestos after the death of my father. For compliance with the necessary documentation requirements, a debt of about $6,000 was incurred. Some of the companies involved offered settlement. Will the money that these companies pay be considered as taxable income? If yes, can the expenses be deducted?
My sister-in-law and me agreed that I will provide child care for two of my nephews. My sister-in-law will be paying me for the task. Is the pay something which can be considered taxable?Yes. In fact, you are required to report your income for those services. Most likely, you will fall under the definition of an independent contractor who needs to file reports with the IRS quarterly. However, that would depend on how much you make.

How is tax evasion punished?They are punished with imprisonment along with pecuniary penalties.

A foreign government is paying me for my services. Am I required to pay taxes considering that it is the foreign government itself that is paying me and not its citizens?There are rules to follow depending on your situation. However, you are generally required to report and pay that foreign income to the IRS. There are exemptions and the law provides for foreign earned income exclusion. Say, when you live and work abroad, you may be permitted to exclude all or a part of your foreign income from U.S. tax. While you are a citizen of the U.S., you may claim the exemption if you become a bona fide resident of a foreign country for an uninterrupted period which includes an entire tax year. Professional fees, pay, wages, and salaries for personal services rendered in a foreign country is a foreign earned income. The test to determine whether your income is foreign earned or not does not depend who pays you but on where the service was performed.

For how long should I keep copies of my tax records?For sales and tax records that is maintained by the Board of Equalization, you should keep them for four years so that their representatives can verify the accuracy of your sales and tax returns and determine if you have correctly paid the tax due on your sales and purchases.

Can federal tax and CA tax returns be amended? If so, until when?Tax returns can be amended. One can amend a tax return until the third year to be counted from the due date of the return or from the extended filing date.
Can a taxpayer amend previous year tax return after they received an award of disability? Taxpayer has been deemed 17% permanently disabled and they are still working for the State prison system. They would like to amend both Fed. and Ca. state back tax years for the 17% workmans comp. that they believe is nontaxable to them. Thank you for your time on this.RETURNS CAN BE AMENDED UP TO 3 YEARS AFTER THE DUE DATE OF THE RETURN OR THE EXTENDED FILING DATE.ONCE THE FEDERAL IS AMENDED IT IS A SIMPLE PROCEDURE TO AMEND THE STATE RETURN

The franchise tax board claimed that I owe them taxes that were already due 12 years ago. I don’t have any proof that I did not pay nor I paid. Is it still legal for them to damand taxes from me?The tax authorities of California can still demand payment from you as there is no statute of limitation that would prevent them from doing so.

Two years ago, i made a $75,000 income. On the year that followed, I did not work and was supported only by my father. From then on, he gave me money every month. Were the money given to me by my father to be considered as income or a gift? How should that be treated? I am about to file my state and federal taxes.It is a gift unless he gave it in exchange for something or for some type of work. On the assumption that it is a gift, it is not taxable to you nor should it be reportable by you. Should the amount he gave totaled $13,000 or more in a year, then, he needs to pay gift tax.

What should be done if a mother gives a monetary gift amounting to $100,000 to her son for a home purchase considering that she earns a monthly limited income? What are the tax implications for the mother?The mother should file a git tax return as the amount given exceeded the annual gift tax exclusion of $13,000. Tax implications would arise only if the lifetime gift tax exemption would exceed the $5 million lifetime gift tax exemption.

My business was closed sometime in the middle of last year but the corporate dissolution is still ongoing up to now. Am I still required to file 2010 tax for the business?Yes. You are required to file tax returns for the business until the year the corporation is finally dissolved.

The last pay period for last year was not included by my employer on my W2’s. After I was informed on the matter, they suggested that my tax files will be amended free of charge by the new book keeper. My spouse and I agreed to have our files amended by our own tax preparer and not by the new book keeper of my employer. However, we will have to pay our tax preparer $150. My employer is now telling me that I will have to shoulder the expenses if the amendment will be done by someone other than his own book keeper. Is my employer correct? Is it not that since it is their mistake, the expenses for the amendment should be his liability?Your employer is not correct. The amendment of your W2 is his responsibility. If he refuses to perform the obligation after your demand, you can even sue him in the small claims court. But are you really willing to sue him for a $150?
Answer no.2 While everything that is correct, do you really want to sue your employer for $150? The amended return is not a re-preparation of your tax return. It merely changes the numbers of your income and any withholding, and everything else remains the same. I am guessing that if they omited the income, they also omitted the withholding, which means that you may own no tax (thus no penalties) and you may even receive an additional refund. Personally, I would let their person prepare the amendment (they are not required to see all of your tax return … just the first couple of pages). If there is an amount due, it should be minimal as would any penalties. I think you would be wasting your time, energy and goodwill with your employer to go the lawsuit route.

My tax preparer submitted my tax returns without my permission. I am now facing an enormous tax liability that I have to consult a cpa for help. What should I do?You can inform the IRS if your signature was forged by the person who submitted your tax returns.

I am doing trade through a website and an offshore account. I am not however provided with tax directions or relevant forms for tax purposes. How should the offshore account as well as the gains or losses which might be incurred from the trading activities be dealt with? 1040 forms asks for offshore accounts should there be any. I am not certain on how to deal with it.Bear in mind that filling out a tax form and signing them with untruthful statements makes a case for perjury.

Is a $50k gift from my father to be considered as income for me in my tax returns?No. Gifts are not considered as income and is not taxable to people who receive them.

I am about to be added to my parents property deed. Shall it be considered as income in my tax return this year?No. It shall be considered as a gift. If it generates rents however, the rental income, for tax purposes, will be considered as income.

I live in California… where many citizens grow marijuana. Our newspaper wrote that it is not illegal for growers to sell to a dispensary, but I’m wondering what, if anything, is in place to ensure that the income generated from these transactions are reported and taxed upon. Do the dispensaries have any legal obligations? Our citizenry is tormented by this plight. Awful skunk smells permeate our community for 5 months of the year… crime increases… etc. I believe this question touches on both tax law and criminal law, so please address both.I imagine the tax authorities will figure out a way to collect marijuana taxes. I took the Jack Daniels tour once and the pipes that carry the hot, newly distilled whiskey from the still to the barreling house are padlocked by the federal Bureau of ATF to keep Jack honest. Presumably the pot revenue officers will use aerial photos and send out tax bills.

The tax refunded was based on the community income, thus, the said refund is a community property that you are entitled to.

Should I tell the IRS about the chapter 7 bankruptcy that I filed this year when I go to file tax returns?The bankruptcy court will send the IRS a notice about your bankruptcy case, so, just proceed to file your taxes normally.

My mother died last year and so we decided to sell her home. Recently, It was bought. What will be my tax liability for the inheritance coming from the sale of the home?An unlimited exemption is provided by our present estate tax law. Since your mother passed in 2010, the estate is not subject to any estate tax.

Can the IRS seize my bank account for the tax lien that I do have?Definitely yes.

After being away for a couple of months, I went home and found myself wondering what happened to my house that was broken into and where my personal properties had gone. Later, I found out that my home was sold for back taxes. They sold it without even informing me. I did not receive any notice at all nor did they care drop a even a simple one in the post office box that I have been using for two decades. They just told me they did not know where I was. When I tried to recover my personal properties, the people who bought my house tried to make me sign a document that will serve as my waiver that will release them from liability for the items that are missing. I did not sign the documents. Now that I am insisting, they just told me to bring the matter to court. What should I do?The tax officials involved can always defend themselves by saying that a notice cannot be served with a post office box as they are required to serve you with it in person. From all the things that you wrote, it can be inferred that, for at least five years, you did not pay any taxes. And you know that, from the notices that they previously sent, they could take your house and sell it. However, make a list of the properties that are missing as well as their value. See if you can prove when the items were taken. Were they taken before or after the sale. These are some of the things you should consider before going to an attorney.

My grandmother died. Her daughter, my mother, wants to transfer the house of my grandmother to me. Is there a way to avoid taxes for that? We already created a trust.There are provisions of California law which might be of use to avoid taxes. A report for Preliminary change of ownership must be filed. This will enable you to avoid the increase on the tax as the property is passed. For you to understand better, allow yourself to have one PCOR form.

I think they are going to do the film in a territorial jurisdiction that grants subsidies to film productions. Canada is one. In the U.S., however, an investor like you could qualify for a 9% deduction on the income generated from the film and not from the 100k that you invested.

Which would be more convenient for a real estate broker like me who wants to open a franchise office, to incorporate by having a C or an S corporation? Here in my state, I cannot incorporate as an LLC. My household falls on a high tax bracket.An S-Corp is advisable for you. But imagine and evaluate a few possibilities and see if a C corp may make sense vis-a-vis your tax bracket.

Am I still under obligation to pay US income tax if I change citizenship?Changing your citizenship will make you free from the U.S. income tax obligation. But on top of that, you will have to pay first an exit tax that is usually large.

I earned a lot last year through capital gain that I now owe the IRS over $40,000. However, I have been unemployed since the last year too. I asked for a tax extension and used the capital gain for two low budget films that are not yet distributed. As of now, they are the only assets which I do have that has equity in them because my house as well as my rental property has more mortgage balance compared to their corresponding market values. So, in short, I am in the state of bankruptcy and is trying to figure out whether to offer the IRS a compromise or an installment agreement. What should I do?Before anything else, do not be late with your tax filings. The 40k could become non dischargeable in bankruptcy if the IRS makes a tax assessment based on non-filing. On the rental property that you own, a chapter 13 bankruptcy could lower your payments on the principal as well as the interests.

Your liability to the IRS will not be extinguished even if you change names. Neither will a change of your name make your would be husband liable for your IRS debt.

Send a demand letter for them to remove the lien on the record. If they don’t act on it, have an attorney to file an action to quite title.

I cannot afford to pay my tax to the IRS. I owe more than $20,000. It would take so many years to complete the payment if I offer installment payments. Do I need an attorney for this?Yes. You might want to offer the IRS a compromise agreement. Also, for taxpayers who cannot afford to pay, there is that formula where financial information will be considered. On the outcome of which, will hinge what is acceptable to the IRS to settle the obligation.

Communicate with the collection agency and send extra copies of the documents you have found as well as an elaboration of what transpired between you and them. Furnish the corporate office of the original creditor with all the correspondence sent to the collection agency. A fax machine will do the job very well because the sending of the letter and documents as well as the receipt of them by the lender will be dated and timestamped. Doing them via certified mail costs higher. If the issue is not resolved after that, consider going to the proper court to sue them. It would also help sending a letter to the regulatory institution where the lender holds a license. For further inquiries, do not hesitate to email me. tom@tomhoganlaw.com

Should I be reporting the money I earn from helping an elderly relative as income when I file for taxes? A family member is paying them to me. I would also like to know if it will have a bearing on my plan of filing bankruptcy. ThanksYou are under obligation to report that income on your tax returns. The job will not stop you from filing bankruptcy.

At 90 years old, my mother has more or less $350,000 in multiple conventional 6 month CDs. That is all that she has without including furnitures. All the money is in her living trust with me and my only brother instituted as beneficiaries. I understand that there are tax changes in 2011. If she passes, how would the tax changes affect the mentioned amount? Would it make any difference it she will just give us the beneficiaries a check amounting to exactly half of the entire amount?For 2011, the estate tax exemption is $1,000,000 and below. Thus, no estate tax will be due. Your mother may also give a gift up to that amount without being liable to pay gift taxes. A gift tax return, however, must be filed.

I am new here in California and I intend to continue working with the same Texas-based company. However, this time, I will not be working with them as a regular employee but as an independent contractor. How should I make this here in CA?Be ready with your written contract with the Texas company. The IRS or the EDD might not agree having you classified as an independent contractor. Negative implications for the Texas company might arise. I recommend that you have an attorney to assist you.

My own federal tax return was filed months ago. Until now, I have not receive the return. Is there anything I can do to speed up the process? If the taxpayers are under obligation to file at a certain date, is the IRS under the obligation to respond with taxpayers return at a definite date too?If the IRS did not send you notices concerning a problem with your return, visit the IRS website and check the status of your refund. If you have an existing federal loan, your refund must have been retained by the IRS. They must have applied it to your federal loan. However, you should have received a notice for that matter.

Liens are filed against us by the IRS. My husband inherited a sum of money just recently and wants to buy a new home. If he does, would the home be attached?It is difficult to assess because we do not know how much your liability is. The IRS, however, can sieze properties, sell them, and apply the proceeds to your tax liability. Consider paying the tax first so that the liens will be released and proceed to resolve the issue and claim a refund later if you think you are entitled.

You do not necessarily need a lawyer to set up a nonprofit organization but it is highly advisable that you retain an attorney to assist you with the process, especially if you want to operate your organiation on an international scale (you may need to retain a few lawyers to do all of what you are saying you want to do with your organization–namely a business lawyer, a tax lawyer and an international lawyer or one who is well versed in all three of those areas). To initially form a nonprofit in California you just need to submit Articles of Incorporation for a Nonprofit Organization to the Secretary of State and pay the fee. However, thereafter, you will need to prepare a number of other doucments that you may want to have a lawyer assist you with preparing. And yes, a nonprofit organization can help people in other countries but again, you may want to consult with an international lawyer to help you determine the rules for operating in another country depending on what you want to do. Also, if you want to be able to offer tax deductions for donations to your organization, you will need to qualify as a 501(c)(3) organization through the Internal Revenue Service and you might definitely need an attorney to assist you with that process

If you itemize deductions, you will be allowed to deduct from your taxable income the fair market value of the land borrowed. The deduction will come as a charitable donation.

What is the least expensive way to bring money from a real estate transaction in Chile to the US? I understand that I can gift family members $10,000 each without paying taxes, but I don’t know how to get the money here. I’ll be flying to Chile to make the transaction but think I can bring it all with me.If you are obeying the law and paying taxes on your worldwide income as U.S. nationals are required to do, you should have no difficulty repatriating your funds by cash, check, or wire transfer. If you carry $10,000 USD or more (or the foreign equivalent) in cash or bearer instruments into the U.S., you must report this to U.S. Customs when you arrive. You may, of course, also encounter Peruvian laws and Peruvian border officials. You could purchase bank checks or traveler’s checks in Chile totaling $10,000 USD, or in any amount, complete the payee line, and then bring or mail them here. Checks that are made out in an individual’s name need not be reported – only “Cash” or “Pay to Bearer” checks which would include blank travelers’ checks. The gift tax exclusion applies whether you mail them $10,000 checks from Chile or hand them $10,000 cash when you get here. If you do a cash transaction within the U.S. of $10,000 or more, for example you give $10,000 cash as a gift, you must complete and file a Currency Transaction Report.

It has been weeks since I mailed my tax returns for 2007 to the IRS. After a visit to the IRS website, I realized that I entered wrong figures. How can I correct it?Since you are late with the filing, the IRS by now has probably assessed and computed some kind of figures that you will be stuck with. The one you submitted will be ignored and your tax liability cannot be shielded with bankruptcy.

My accountant gave me a wrong advice. To whom should I go for proper advice?Find and go to an attorney who is also a CPA in your area.

Together with my sister, I inherited a real property. We did not know that at that time, the same property was subject to a step-up basis. We agreed to roll the property over through 1031 exchanges. The rolling over was done several times. The property was sold after a couple of years and we decided that our tax returns be prepared by a professional. The fact that the initial property was inherited was known to the accountant. However, he prepared a tax form which burdened us with capital gains treatment in full. Do we still have a chance to correct this?An amended return may be filed to correct the error. The amendment, however, must be done at any time before the lapse of three years to be counted from the due date of the return or from the date the return was filed.

How much money can a boyfriend give as gift to a girlfriend without any tax liability?This year, 2011, he boyfriend can give $12,000 in a year without a consequent tax ramification. He can also give $5 million during his lifetime.

If taxes were already paid on those funds, they would be seen on the disbursements you have received and from the withholding amount on the w2.

The house which was supposed to be my primary residence was foreclosed. The funds which is supposed to be used to continue building the house were also frozen. What I understand is that, under the law, the debt is forgiven. Is the interest amounting to about $90k that they charged me deductible?The interest that was actually paid can be deducted in the same year you paid it. When the property is actually sold at the foreclosure sale at a price which is more than the principal balance of the loan, you will be able to deduct that portion of the interest that was applied to the interest owed. Otherwise, there will be no deduction.

Through a family trust, I will be inheriting properties from my grandparents. Will there be a property reassessment which will result in a large increase of the property tax. How do we avoid this? The properties will be reassessed if you do not qualify for an exemption. Since it is a grandparent to grandchild transfer, you will automatically qualify for the exemption if your parents are deceased. If they are still alive, the exemption will not be automatic and filing specific applications with the county to get an exemption will be essential.

I heard that there is a law allowing disabled people to file their taxes late without being subject to penalties. I am just not sure how that works or what the law really says. My question is, if the disabled has not filed his taxes for 2009, how should he file it now?All that he has to do is file the 2009 tax returns. There will be no penalties if there is nothing that is owed. On the other hand, penalties for late filing will be assessed if he owes something. In the latter case, he can request abatement of penalties due to special circumstance. There is no guarantee however that the request will be granted. Interests are not abated. The logic is that he earned interest while holding those funds instead of paying the tax.

I used as rental the house which I inherited from my parents. I lost the same property in a foreclosure. From the time of the foreclosure up to today, I cannot contact the lender in any way and I have tried several times and means to obtain information for my tax return. I informed the IRS that my return is ready except for the information that I needed from the lender. The IRS, in turn, told me that I could contact them later but I shall pay penalties if I owe taxes. It is not fair that I will be made to pay penalties as a consequence of the negligence of the lender. I intend to fill out a form for insolvency and I do not know anymore which is which because of the entire situation. What is there that I should do?Is the foreclosure the result of your own loan? If it is not yours and the loan existed before you inherited the property, then, you are not liable for any taxes with respect to that. But there are other factors worth considering such as the value of the house at the time when it was changed to rental and the value of the house compared to the worth of the loan. It would not hurt paying a few dollars to some tax attorney today to evaluate the entire situation and apply the right remedy. If you solve it yourself, you might find yourself loosing thousands.

Through the life estate of my father, I inherited a home and a condo unit. These properties were passed to me 2 years ago. The values of these properties increased such that the condo is now worth about $120,000 and the home about $300,000. A Reassessment Exclusion for Transfer between Parent and Child was done and the two properties qualified in each county where they are located. For now, I am not receiving any income except those that comes from the S.S. which amounts to about $600 per month and a bank interest. I am thinking of selling either or both of the properties I inherited, so, I am interested to know the tax consequences. Should I be successful in selling them, what would be the tax implication considering that I have two residences and equally split a year living in each of these residences?You do not own a right to sell each of those properties if you only have a life estate. The life estate may have been made to protect your SS. After you leave the residence permanently, there would probably be another owner. And assuming that is really the case, your question as to the tax consequences after you sell those properties is irrelevant. On the assumption that your father was the only owner of those properties when he died, for tax purposes, the basis “stepped-up” to the value at the time of his death. That would mean little or no capital gains tax at all if those properties would be sold today.

There will be a short sale. That would mean I will be owing a lot of money and a 1099 c form will be on its way. There are two other properties which I own and I probably will be having a divorce this year. So, forward direction is foggy and I am not sure which direction to go. If at the time of the short sale you are insolvent, your taxable income will not include the forgiveness of indebtedness income. The same will hold true if the subject of the short sale is your principal residence. Since you will be having a divorce, there will be issues regarding ownership of properties and the overall picture will get a little complicated when intertwined with tax liabilities. So, consult a tax attorney in your area.

My parents sent me $3000 from overseas for about 4 times. Would that make me liable for taxes? I heard somewhere that there is no tax liability if the amount does not exceed $10000 in one time. Is that correct?No. Foreign gifts should be reported if it exceeds $100,000 in a tax year.

I sold some properties in my country and the money is going to be transferred to my new business bank account so I can start my new business here in CA. If I am under obligation to report this amount of money to the IRS, what form would I be needing? Am I bound to pay taxes for this?You probably need a 1040 form and report the money as capital gains. If the life property was held for more than a year, have it reported as long term capital gains. Those held for one year or less, have it as short term capital gains. There shall be an exclusion for the first $250k of profits if what was sold was your primary residence for three years since the last 5 years.

Me and my brother are going to inherit some real estate. How would that be affected with my back taxes?The IRS would probably institute a lien on the property because of your back taxes. You should settle your back taxes now. It could be a real headache if you intend to care for it at a later time.

I submitted an amended tax return for 2007 sometime in July 2010. It is now 2011 and I have not received any feedback yet from the IRS. It is unclear what awaits me and how do I solve them. Any idea?Consider these two points: 1. If an assessment of your taxes was already made by the IRS by the time your late return was filed, then, what you owe is the amount assessed as well as the interest and the penalties. Take note, they are things which cannot be blown away with bankruptcy; and 2. If you filed late but your taxes for 2007 were not yet assessed by the IRS, you still have a chance getting some relief.

I plan to give some of the money which I got from my husband’s insurance as his beneficiary. Am I required show something to the IRS after giving the money?A federal gift tax return shall be required to be filed if the money given exceeds $13,000 in a year per donee.
I was the beneficary to my husbands life insurance. I would like to give some of the money to my sons. Do I need anything in writing to show this as a gift.yes, if the gifts of cash are more than $13,000 per year per donor per donee, you will need to file a federal gift tax return (form 709). as long as your lifetime gifts to all donees (other than a US citizen spouse) are $1,000,000 or less no tax will be due, but the form 709 is still required.

I am divorced and is currently having a joint custody for our child with my ex husband. We don’t have any stipulation concerning our taxes on our divorce papers. Our daughter stays with me most of the time. I want to claim my daughter on my taxes and my husband is also claiming her. Who between us is entitled to claim, me or my husband?The facts you provided is not sufficient enough
I am divorced. My ex husband and I have joint custody of our daughter,however, she lives with me over 60 percent of the time. We did not specify anything regarding taxes on our divorce papers. I was informed that I am intitled to claim her on my taxes,however, he insits on claiming her. Who may legally claim our child?The test for claiming a child as a dependent in a shared custody situation is more complicated than the facts you provided. Keep in mind you must be able to substantiate your support (and you ex-husband will need to substantiate what support he give). Notwithstanding what you ex-husband does, you need to make sure what you do is right. Then whatever he does is his problem.

How long am I required to keep the mortgage documents showing refinancing agreements with another company?Save it for at least three years. You might find it useful if the IRS or the FTB conducts an audit that involves you.
how long do you need to save your mortgage papers if you refinanced with another company?I generally recommend that you save anything of this type for at least three years as it may be necessary (or useful) if you are audited by the IRS or FTB.

I obtained a judgment against a company. Apparently, I cannot collect from them anymore because all their bank accounts were closed and assets had been transferred. Should I indeed not be able to collect, will there be any available tax provisions which will provide me with some relief or advantage?It would be helpful if you specify the type of judgment as well as when the damage accrued before I answer your question. However, it looks like you have a ground to sue them for fraudulent transfer.

Me and my ex wife separated in December 2010. However, she only took custody of our two kids by February 2011 and the kids live with me until that date. Is she legally allowed to claim our two kids on her tax return?It depends. Generally, the parent having custody of the children has the right to claim the children as deduction on the taxes except when an agreement with the former spouse which would operate the otherwise has been reached as part of the Marital Settlement Agreement. For purposes of taxation, the IRS defines Custodial Parent. The term refers to the parent with whom the child lives most of the nights in a year. Noncustodial parents, however, may take the children as deduction but is required to file IRS Form 8332 with the tax return.

We are a software company that provides service and does business all over the U.S.. To start the service, we sell a license to customers first. Do we have to charge sales tax for that? Our office is in California.The sales and tax laws varies in each state. There are states that do not collect sales tax. Try to identify them. At this time, many states are trying to tax online sales, so, consider talking to an attorney.

I lost an investment real estate property last year. A 1099-A form was sent to me by the bank which foreclosed the property for the amount of the remaining balance. Will I have to pay taxes on that money?If you borrowed money and will not be paying for it anymore, then, it is a taxable income. If what was foreclosed was your residence, you might qualify and be shielded by a federal law from assuming further liability. However, since the property was an investment property, it might not qualify.

The person I intend to marry owes the IRS a a large amount of money. Would the IRS have a reason to take my returns, sell the house that I own, or garnish my wages after I marry her?During your marriage, the wages that you are going to earn will become part of the community property. The interest of your spouse in the community property may be levied by the IRS. Those properties which were accumulated prior to the marriage are your own sole property, except if their title was changed. Separate property assets commingled with community assets are susceptible to levy.

We incorporated our fraternal society in Alabama as a non-profit corporation. We are planning to expand our activities in California. What are required of us by the State of California to make our activities legitimate? Are dues which we shall collect by reason of those activities subject to taxes?Once your corporation is active, maintains an office, or performs functions in California, register as foreign non-profit. The State of California will recognize 501c3 as well as other tax exempt status. Consult the proper attorney to avoid tax and legal issues.

A psychologist friend of mine consults a psychotherapist for her own mental health. Can the amount which she pays to the therapist be deducted on her schedule c against her gross earnings by having the therapist as a consultant? The therapist treats her just like any other patient.The amount should properly be considered as a medical expense. It is subject to limitations under schedule A of the 1040. It is not a business deduction as it is a personal medical expense.

We do body piercings in the tattoo parlor that I own. I buy jewelries but do not sell them as I only include them with the piercing. Am I liable to pay sales taxes for those jewelries?In acquiring those jewelries, you will be considered as an end user who must pay sales tax. You must pay Use Tax if you gave the jewelry supplier your exemption certificate.

I have been spending most of my time working in Alaska since the last 5 years. Since I got divorce last January, I only come to California after every two months and spend two weeks with my two children who are aged 17 and 20. We usually spend those two weeks travelling out of the State together. My ex spouse got my home as a consequence of the divorce, so, basically, I do not have a legal home. The situation makes me contemplate of claiming Alaska as my residence. Can I legally do this for tax purposes?A residence is a place where one intends to live in the foreseeable future. Apparently, you have important ties with Alaska. Perhaps, you do possess an Alaskan Driver’s License, has a right to vote in Alaska, and others things that could make you qualify as an Alaskan resident. For that matter, it is much wiser to consult the proper tax attorney in Alaska instead of a CA attorney.

The one who told you is right. You are subject to self-employment taxes. File an amended tax return. You can request that the tax advisor pay the penalties and interests.

I am indebted for about $400,00 to the government for taxes. The amount which will be accumulated if we sell our house as well as other things that we own cannot cover the entire liability. Will bankruptcy help me with this?Tax liens cannot be discharged by bankruptcy. However, it might help you get discharge as to personal liabilities.

How do I place my own home into a living trust without loosing proposition 13 that I have had for a couple of years now?In general, a property which was placed in the owner’s revocable trust will not loose its tax basis. Consult a tax advisor for this.

My parents are going to loan me $80,000 while my parents-in-law are going to loan me $86,000. Should I set up two loans or just set up the loan up to the total amount and just another lender for taxation purposes?Since you are borrowing from different sources, the better plan is to make two promissory notes and a payment schedule to avoid misconceptions as to where the money came from. You can e-mail me or visit our firm if you need help preparing the documents.

I am in a chapter 13 bankruptcy plan since 2009. However, there is still a balance of about $28,000 and I called the IRS about it. The insolvency department of the IRS told me that they are going to file alien against me and send the relevant letter to my employer. I am working in the security field with some employers running credit reports. So, the letter which the IRS is planning to send is going to be prejudicial on my part. Can they really do that? Would it be legal for them to do that?Like any other creditor, the IRS is also subject to the automatic stay that a bankruptcy produces. Violation of the automatic stay entitles you to get a relief for damages.

A piece of land was sold. The buyer then split it into two parcels and sold them again. The liens which existed since the original seller were not paid. The buyer who resold it did not pay the liens too. The city was not remiss in making special assessments. Is the city still entitled to relief?If the buyers had notice of the lien, whether actual or constructive, they are still under obligation to pay them. Consult your own attorney immediately before any action for relief is barred.

What is this concept called transfer price planning?They usually involve manufacturing companies that has international operations. When products are sold within the same family of companies, the “transfer price” can be controlled in every level of transaction. As to how much profit they make in each jurisdiction is thus something that they can also control. With that scheme, they can minimize their tax obligations in jurisdictions having higher tax rates.

The company that my husband incorporated has not been operational since 2007. He also failed to dissolve it. The state of California has been asking for the tax returns and fines for not filing. The company does not have any asset. Its bank accounts are also closed. Can the state make him personally liable for the minimum tax as well as the fines?It is possible that they can. Although the business has not been operational, a winding up must properly be done. There are matters worth dealing with after the company became non-operational such as existence of profits or losses, sale of assets, and a lot more. It is always advisable to see a business law attorney and tax accountant when you close a business.

Me and my friend are going to form an online business. Through it, we will sell imported clothes to distributors. To get the business running, one of us has to live in China. So, now, we are choosing between having a partnership or an LLC. What is the difference between the two when it comes to tax write write offs? Are we able to write off in either case the living and travelling expenses that will be incurred in China?There has to be a full review done first regarding the business, the finances, and the foreseeable scenarios before the proper formation of a business entity. A tax advice done prior to that will not be helpful. However, generally speaking, the living expense in China can be treated as a business expense and will help you reduce the tax burden.

At the moment when the value of the gold goes up to something like $80,000 from $52,000 when I bought them, would I be liable for capital gains tax?Your liability to pay capital gains tax arises when you realize the gain by selling it or in any other manner.

How can I make a settlement with IRS? There was an unintentional various income omission in my 2004-2006 tax filings prepared by an indenpendent tax preparer.This is very serious. Any omission of income can be a crime under the tax law. The IRS has a voluntary disclosure program. You need to contact a tax lawyer immediately and have them approach the IRS to resolve this problem.

I am one of those who prepare their own tax returns. A notice for an audit has been set to me. How do I prepare for this kind of stuff? Do I need to be represented?In cases of audit, taxpayers benefit when represented by people who are professional in the field. You definitely need to have someone to protect your legal interests if a huge amount of tax liability is involved. As to how to prepare for an audit, that would be dependent on the type of business which you are engaged in.

A lot of numbers on my tax return was erroneously made by my tax preparer. As a consequence, I received a letter from the IRS demanding from me back taxes, interests, and penalties. Who should be liable here for the interests and penalties, is it me or my tax preparer? What recourse can I make against my tax preparer?The answer to the question of who is liable would depend on answers of so many questions like: 1. What information have you given to the tax preparer at the time when he was preparing the return? If the necessary information was not available to him, he might or will not be held responsible; 2. With what form of communication have you had with the tax preparer?; 3. What were the documents you showed him or what documents were delivered to him?; and a lot more. In short, the issue can be resolved after what has been alleged and proven. What you need to immediately address right now are things that would make the IRS waive interest and penalties before making any claims against the tax preparer.

Shall I pay taxes if I am going to inherit money? If so, shall it be federal or to the state only? Or to both of them?The estate will pay the taxes, not you. If someone tells you to pay in advance so you can get the inheritance, that is a scam.

About 4 or 5 months ago, I received a notice of audit. I immediately consulted my tax preparer on the matter and she told me that she is going to contact me as soon as the need arise. I have not heard anything from her since then and so I assumed everything was alright until I received a notice with a demand for me to pay more than $5,000. I found out that my tax preparer totally forgot about my audit letter and did not work on it. Isn’t she liable for something?If it could be shown that were it not for her mistake, you would have prevailed in your IRS issue, she may be held for professional malpractice.

My wages were garnished by the IRS but my employer is not sending the money to them. I am now in default. Can I sue the company for the entire sum considering not all of the amount were deducted in the payroll?You can sue them for the money that was not sent as well as for the resulting cost and damages that you suffered because of their omissions.

My sister died and my parents sued the doctor who treated her for wrongful death. Is the settlement that was accepted taxable?A money that is received based on the emotional damage to the heirs for their loss of the decedent is taxable. However, the so-called “survival cause of action” or that part of the award which is based on the injuries suffered during the lifetime of the decedent is not taxable.

I would like to start an LLC in Nevada for a bunch of websites that I own. All these websites operate independently. I operate these websites without leaving the computer. Should I decide to leave in California, will I be legally required to register the LLC with the State and pay only the annual minimum fee? The website will be hosted in Nevada and all the money which shall be acquired shall also be received in the banks there. I will not be receiving phone calls or emails concerning the business while in California.When you try to open a business, it is much more beneficial to retain a qualified tax/corporate attorney to help you make a full assessment of tax consequences and to help you prepare formation of documents.

We have just moved from New York to California. We are thinking of moving our incorporated business here in California but avoiding the necessity of New York tax returns. How do we do that? We already checked the website of the Secretary of the State of California but has not found anything useful.Should you be operating the business in California by now, you would have file and qualify for a foreign entity doing business in California. It is a long and complicated process. Thus, it is more practical to just incorporate in California instead. We usually advise clients to form a subsidiary corporation but you are more inclined on simplifying the tax aspects. Your options are varied and will depend on the form of business that you have in New York. One option for instance is a dissolution of the New York corporation. But again, that would require more information before being able to provide you with a wiser set of options.

My S Corporation here in California has gone out of business. I understand that I have to file the dissolution of the same corporation with the Secretary of State. I was informed that a dissolution cannot be filed if the corporation is suspended. The corporation was suspended last year. What should I do to make sure putting on official record that the business no longer exist?You have to pay all outstanding tax balances before you are able to dissolve the corporation.
Hello, I had a California S Corp that went out of business. I have learned that I need to file a Dissolution of the S Corp with the Secretary of State. But I have also learned that if it has been suspended, which it was last yr. then the Dissolution cannot be filed? Please advise how I can make sure that it is recorded that this business no longer exists. If it has been suspended am I still required to file Dissolution? If so, what do I need to do to make that happen?Thanks for your question. Before you are able to dissolve the cooperation, you will need to pay all outstanding tax balances and/or delinquent returns. Then you have to file a Application for Certificate of Reviver with the State FTB. If you would like assistance with this process, feel free to contact my office. If cost is an issue,we handle business advisory matters on an up-front fixed fee basis.

Taxes on a college accountThe income from a custodial account such as a UTMA account must be reported on the child’s (grandchild’s) tax return and is taxed at the child’s rate. While a minor, the parent is responsible for filing an income tax return on behalf of the child. Children aged 14 and older must sign their own tax returns.

I have a UTMA account in my name, established by my grandparents for college.

Who is responsible for taxes on the account?

I won some money in gambling and that is the only “income” I have. Do I have to pay taxes for it? The winning did not exceed $10,000. There is also this amount, about $200,000, which I will be receiving from the trust of my mother who just passed away. Shall I be taxed on this inheritance too?The tax from the inheritance will be paid by the estate. Winnings from gambling are taxable. However, if you keep detailed records, you may even deduct gambling losses.

My mother hired attorneys who are experienced in collecting claims on death by asbestos after the death of my father. For compliance with the necessary documentation requirements, a debt of about $6,000 was incurred. Some of the companies involved offered settlement. Will the money that these companies pay be considered as taxable income? If yes, can the expenses be deducted?Generally, settlements from injury claims are not taxable unlike settlements from purely death claims. Expenses, in general also, are deductible from taxable income.

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