How JustAnswer Works:

  • Ask an Expert
    Experts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional Answer
    Via email, text message, or notification as you wait on our site.
    Ask follow up questions if you need to.
  • 100% Satisfaction Guarantee
    Rate the answer you receive.

Ask Ed Johnson Your Own Question

Ed Johnson
Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10760
Experience:  GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
586644
Type Your Tax Question Here...
Ed Johnson is online now
A new question is answered every 9 seconds

I have recieved a tax assesment from california franchise tax

Resolved Question:

I have recieved a tax assesment from california franchise tax for the years 2005 and 2006 . I know I don't owe any taxes .
Submitted: 6 years ago.
Category: Tax
Expert:  Ed Johnson replied 6 years ago.

DearCustomer

 

Thank you for your question.

 

Was this an assessment for corporate or business taxes?

 

If so what form is your business? LLC, S-corp, etc

 

Or is this for personal icome taxes?

Customer: replied 6 years ago.

it is a personal income tax issue..............I have lots of capital gain losses carried forward( that is why I was taking easy).clearly the assesor did not take that into consideration. They have assess way above what is reasonable ?????

what do I need to do to first get a delay to file a protest or a tax return ..and second, all my taxes are either capital gain or loss ..I have alomost no regular income as I'm retired. and it is kinda complicated to file .......do you know of any one who can help in my area

Expert:  Ed Johnson replied 6 years ago.

DearCustomer

 

What causes me concern here is that you say you have ALMOST no other income, but in order to be more accurate, I would need to assess your situation in the same light as the Franchise tax board.

 

So i need more information.

 

1. You state you have capital gains and losses: is this from stocks, bonds, realestate,etc?

 

2. What specifically are your othere classes of income retired or otherwise.

 

3. What was your adjusted gross income on the federal 1040?

 

4. Did you file taxes for those years in question?

 

 

Customer: replied 6 years ago.

1. You state you have capital gains and losses: is this from stocks, bonds, realestate,etc?

 

answer : it was in the form of stock but mostly options .

 

2. What specifically are your othere classes of income retired or otherwise.

answer : bank interst

 

3. What was your adjusted gross income on the federal 1040?

answer ; $119,000.

 

4. Did you file taxes for those years in question?

I did file for the year 2005 federal but not state

 

I have over $900,000. of tax losses carried fowards from prior years..all from stocks and options

 

Customer: replied 6 years ago.

I also would like to thank you for your kind attention

 

Expert:  Ed Johnson replied 6 years ago.

DearCustomer

 

thank you for your question.

 

OK so here is the deal.

 

I see where the Franchise board is coming from.

 

In the U.S. you can not avoid fling the state tax returns (or federal) even if you have suffieint capital losses to avoid tax. In order to take advantage of those losses you have to go thruogh the process of filing the state returns.

 

You are also limited in how much losses you can take in carry forward.

 

during the tax years in question, california only allowed capital losses to be taken against capital gains. so you would still be able to end up with some taxable income related to the interest.

 

Another potential element that California may be looking at is the kind of stock options you had and your timing in the exercise of them. it is possible to encur taxable income for stock options that are issued as compensation. It is not necessary to explore your kinds of options and the treatment of them, because that would be to complicated here. If they were new optiosn this year, I could do it. THE Franchise tax board has the information and you would have to deal with that. You would have to find out why they think you owe that much money. BUT I see possibilities.

 

california capital gains and capital loss carry over rules are found in this document: http://www.ftb.ca.gov/forms/06_forms/06_540dins.pdf

 

to fix this, you need to pull a copy of your Federal 2005 return, and file a state return to figure the actual tax. If it is different, then you would appeal it. (you have to do the math). You can fist appeal with a letter, addressing each years tax.

 

(yor 2005 california return will affect your 2006 return, so if you filed a state return for 2006, you would now have to file an amended return.)

 

File an appeal and include the 2005 reutrn and the amended 2006 return. Ask them to please refigure the tax based on the enclosed returns.

 

Alternatively you can ask for an audit. (not recommended, if you never filed the 2005 return).

 

California, generally, only allows a capital loss carryover of 3,000 dollars per year. So you may still owe taxes, even though you have hugh losses.

 

You can find a copy of your California rights and appeal process here: http://www.ftb.ca.gov/aboutftb/taxpayer_advocate/index.shtml

 

 

 

Ed Johnson, Tax Preparer
Category: Tax
Satisfied Customers: 10760
Experience: GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee
Ed Johnson and other Tax Specialists are ready to help you

JustAnswer in the News:

 
 
 
Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.
 
 
 

What Customers are Saying:

 
 
 
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
< Last | Next >
  • I really was impressed with the prompt response. Your expert was not only a tax expert, but a people expert!!! Her genuine and caring attitude came across in her response... T.G.W Matteson, IL
  • I WON!!! I just wanted you to know that your original answer gave me the courage and confidence to go into yesterday's audit ready to fight. Bonnie Chesnee, SC
  • Great service. Answered my complex tax question in detail and provided a lot of additional useful information for my specific situation. John Minneapolis, MN
  • Excellent information, very quick reply. The experts really take the time to address your questions, it is well worth the fee, for the peace of mind they can provide you with. Orville Hesperia, California
  • Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help. Mary C. Freshfield, Liverpool, UK
  • This expert is wonderful. They truly know what they are talking about, and they actually care about you. They really helped put my nerves at ease. Thank you so much!!!! Alex Los Angeles, CA
  • Thank you for all your help. It is nice to know that this service is here for people like myself, who need answers fast and are not sure who to consult. GP Hesperia, CA
 
 
 

Meet The Experts:

 
 
 
  • Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
< Last | Next >
  • http://ww2.justanswer.com/uploads/KU/KUMI95/2013-9-30_195031_kumar.64x64.jpg Wallstreet Esq.'s Avatar

    Wallstreet Esq.

    Tax Attorney

    Satisfied Customers:

    570
    10 years experience
  • http://ww2.justanswer.com/uploads/CU/Cuttinggirl/2011-10-29_03719_wcrop2.64x64.jpg Wendy Reed's Avatar

    Wendy Reed

    Enrolled Agent

    Satisfied Customers:

    3052
    15+ years tax preparation and tax advice.
  • http://ww2.justanswer.com/uploads/CATax/2009-08-04_204548_Mark.jpg Mark D's Avatar

    Mark D

    Enrolled Agent

    Satisfied Customers:

    985
    MBA, EA, Specializing in Business and Individual Tax Returns and Issues
  • http://ww2.justanswer.com/uploads/IN/insearchoftheanswer/2013-8-16_0233_attorney.64x64.jpg Richard's Avatar

    Richard

    Tax Attorney

    Satisfied Customers:

    3229
    29 years of experience as a tax, real estate, and business attorney.
  • http://ww2.justanswer.com/uploads/MY/MyVirtualCPA/2012-7-5_44024_cookmegan1.64x64.jpg Megan C's Avatar

    Megan C

    Certified Public Accountant (CPA)

    Satisfied Customers:

    6121
    Licensed CPA, CFE, CMA who teaches accounting courses at Master's Level
  • http://ww2.justanswer.com/uploads/JG/jgordosea/2012-6-7_43138_GordosVeritas.64x64.jpg jgordosea's Avatar

    jgordosea

    Enrolled Agent

    Satisfied Customers:

    2783
    I've prepared all types of taxes since 1987.
  • http://ww2.justanswer.com/uploads/OZ/ozaukeecpa/2012-6-7_193219_Picture1croppedandshrunk.64x64.jpg MequonCPA's Avatar

    MequonCPA

    Certified Public Accountant (CPA)

    Satisfied Customers:

    2231
    CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
 
 
 
Chat Now With A Tax Professional
Ed Johnson
Ed Johnson
5142 Satisfied Customers
GPHR Cert; U.S. Treasury Tax Advocacy Panel appointee