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Recent Double Taxation questions

My income in the U.S. is a federal pension. If I move to

My income in the U.S. is a federal pension. If I move to Spain as a non-working resident how will I be taxed? By the U.S. or by Spain or buy both?JA: The Accountant will know how to help. Please tell me more, so we can help you best.Customer: What do you need to know?JA: Is there anything else the Accountant should be aware of?Customer: It will be myself, my wife, and my two sons. My oldest is disabled because of autism. we do not plan on working n Spain.

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

21,922 satisfied customers
Can you help me in this area. Facts: 1. UK parent company

Hi, can you help me in this area. Facts:1. UK parent company owns 100% of US subsidiary 2.UK Parent is owned by one individual 3.The individual now holds E2 VisaThe question is, can the US company elect to be treated as an Scorp under the Owner name (E2)? WHat is the best tax saving strategy for this scenario? Should the owner be treated as a resident or non-resident for tax purposes on his 1040? and more related questions. Let me know

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Matthew Breecher

President

MBA (Graduate Legal Studies)

328 satisfied customers
I am preparing a tax return for someone who just became a

I am preparing a tax return for someone who just became a citizen of the U.S. He withdrew $200,00 AUD from the fund on June 29, 2016 in a lump sum payment. Since he wasn't a citizen prior to 2016, he never reported any of the income from the fund in the U.S. He needed the $200,000 to payoff his mortgage in Australia. I wanted to know if the full $200,000 is taxable pension income for U.S. Tax purposes? What about the non-lump sum w/D he made of about 35,000?JA: The Accountant will know how to help. Is there anything else important you think the Accountant should know?Customer: The Superannunation w/D's were taxed by Australia on his Australian tax return for the fiscal year ended 6/30/16. These W/d's were considered an "untaxed element" on lines 7 and 8 of the Australian individual T/R.

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emc011075

Tax advisor and Enrolled Agent

Bachelor's Degree

5,736 satisfied customers
My husband and I own a tax preparation business. Only work

My husband and I own a tax preparation business. Only work part time at it and most tax seasons make about 10K. We originally started the business as a C-Corp. I was wondering if it would be better to become a S-Corp. We do pay ourselves a meager salary since we don't make a lot and I pay taxes on our income and issue W2s for us at the end of each tax year. We don't have any stock. We just keep the left over profits after wages and expenses in the bank.What would be the advantages/disadvantages if we did switch to being a S-Corp?

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

21,922 satisfied customers
I have a somewhat complex question regarding capital gains

I have a somewhat complex question regarding capital gains and a 1031 exchange on real estate.JA: The Accountant will know how to help. Please tell me more, so we can help you best.Customer: Great. I have a lot which I bought as an investment in 2000. I am not a professional builder. I would like to have a house built on this lot, and then sell it. The lot has a basis of about $6000, and I would value it at about $100,000 now. Is there a strategy to be able to roll over the long term capital gains on the lot? Perhaps by the lot being held by a separate tax entity from the tax entity selling the house and lot?JA: Is there anything else the Accountant should be aware of?Customer: We expect we would sell the house shortly after it was built. Alternatively, we could rent it out for a period of time if that improved the tax situation.

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

21,922 satisfied customers
I have an LLC. At the end of the year I have to claim money

I have an LLC. At the end of the year I have to claim money made through the LLC as personal income.JA: Can you tell me what state the LLC is registered in?Customer: MichiganJA: Has anything been filed or reported?Customer: In the past. Not this year. Will an S corporation separate my income from my companies?JA: Anything else you want the lawyer to know before I connect you?Customer: Yes. I'm looking to separate my income from my company somy income is small.

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Robin D.

Vocational, Technical or Trade School

25,324 satisfied customers
Trying Again - New York based C Corp - Fringe Benefit for 5%

Trying Again - New York based C Corp - Fringe Benefit for 5% ownersBackground:BestWeb tracks the use of all company vehicles and whether the mileage is for business or personal use. The business use mileage of the vehicles is clearly "qualified business use" for the purposes of the "business use percentage" as it relates to depreciating the vehicle as listed property per Publication 946. The personal use mileage was also all considered as "qualified business use" as per 26 U.S. Code § 280F(6)(C)(i)(III), as explained in Publication 946. BestWeb met the conditions of this clause through valuing the personal use mileage according to 26 CFR 1.61-21, as explained in Publication 15-B, and reporting it as a fringe benefit. Specifically, the proportionate fringe benefit value is included in each employee's gross income and income tax is withheld.This resulted in BestWeb reporting that 100% of all company vehicles' use was "qualified business use" and so the "business use percentage" on Form 4562, Part V, was entered as 100%. This was accurate and resulted in fair taxation when all company vehicles were used by employees that were not "more than 5% owner." BestWeb depreciated the value of the vehicles and was able to claim the depreciation as a deduction while the correlating fringe benefit value to the employee was reported as part of income and had all applicable taxes withheld/remitted.However, this does not appear to result in fair taxation when one of the employees is a "more than 5% owner." Under this circumstance, 26 U.S. Code § 280F(6)(C)(i)(II), as explained in Publication 946, states that "the use of property as pay for the services of a 5% owner or related person" is not included as a "qualified business use." This means that, irrespective of whether or not the value of the personal use of the vehicle is reported as part of the 5% owner's gross income, with income taxes withheld, BestWeb is not able to claim that percentage as a "qualified business use." The resulting impact is that the "business use percentage" for the vehicle used by the 5% owner will be less than 100% when reported on Form 4562, Part V. Because of this, BestWeb will be able to depreciate a smaller amount for the respective year, and so claim a smaller deduction from taxes. At the same time the 5% owner will be paying all wage related taxes on the value of the fringe benefit as the value is still reported as part of gross income for the 5% owner. Essentially, BestWeb will be paying income tax and the employee will be paying income tax on the same monies.This results in the following question:Is BestWeb's above understanding accurate and how should this be best handled so as to result in fair taxation for both BestWeb and the 5% owner?It is our hope that it is as simple as overlooking a clause in the IRC whereas BestWeb does not need to report the value of the personal use of the vehicle as part of the 5% owner's gross income. Alternately, maybe there is a clause or other case law overlooked allowing the use of property as pay for the services of a 5% owner when the total gross income for that owner is less than a certain dollar amount.

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Matthew Breecher

President

MBA (Graduate Legal Studies)

328 satisfied customers
I have a specific question relating to my ability to take a

Hi. I have a specific question relating to my ability to take a C-Corp election using an existing LLC I have in place. Do you have an attorney I could work with with expertise in LLC law, the LLC is registered in Delaware. ThanksJA: Can you tell me what state the LLC is registered in?Customer: DelawareJA: Has anything been filed or reported?Customer: LLC was registered 12/28/2017. EIN number was assigned by IRS on 1/31/2017. However, LLC was not fully formalized or capitalized until 2/26/207. Bank accounts were first opened on that date and a passive investor accounts for 10% of capitalization.JA: Anything else you want the lawyer to know before I connect you?Customer: My goal is to: ***** ***** may elect to be taxed as a Corporation (a.k.a. “C” Corporation) by applying for an EIN, and then filing a Form 8832 within 75 days after the date of formation or beginning of a tax year. The issue is the 75 day rule has passed so the question is can I mark it from the 2/26 capitalization date?

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

21,922 satisfied customers
I'm considering creating an LLC, S Corp, or Limited

I'm considering creating an LLC, S Corp, or Limited Partnership to trade stocks in. I currently have a full time job and continue to reinvent all Gains back into the brokerage account. Eventually I would like this to be my primary source of income. Would there be a significant tax advantage to doing this?

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

21,922 satisfied customers
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