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MequonCPA, Certified Public Accountant (CPA)
Category: Tax
Satisfied Customers: 2342
Experience:  CPA, Over 30 yrs experience w/individuals and small businesses. Masters in Tax.
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i am a shareholder in a texas s corporation operating in calif.

Resolved Question:

i am a shareholder in a texas s corporation operating in calif. selling to a delaware corp assets only can calif. get a judgement on my proceeds for state income tax in calif. and enforce this judgement in texas? i have no assets in calif.
Submitted: 5 years ago.
Category: Tax
Expert:  MequonCPA replied 5 years ago.

Hi and welcome to JustAnswer:


The California Franchise Tax Board can obtain a judgement to be inforced either within the corportion on your interest or against you personally. They are no different than any other creditor and can seek restitution across state borders.

Customer: replied 5 years ago.

I am not/never been a calif resident why can calif impose a state income tax on me personally? If so,does it include full tax on the full amount paid for goodwill and the covenant not to compete worldwide, or would it be a percentage of the amount applicable to California vs. worldwide?

Expert:  MequonCPA replied 5 years ago.

Whether or not you are a resident has no effect on your potential tax liability to the state. If you were an S Corporation shareholder of a corporation doing business in California you are subject to California tax laws. You should have been filing California returns for the CA apportioned amount of income that was allocated to you.

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