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Recent Personal Tax questions

Who will answer my question, Pearl or Barbara?? Received a

who will answer my question, Pearl or Barbara??JA: The Accountant will know how to help. Please tell me more, so we can help you best.Customer: Received a tax letter from the IRS, trying to figure the best way to handle this, is this your area of expertise?JA: Is there anything else the Accountant should be aware of?Customer: was for personal 2014 personal taxes.

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Barbara

Enrolled Agent, Paralegal

5,690 satisfied customers
My husband just passed away on Nov 7. He had filed for a

My husband just passed away on Nov 7. He had filed for a delay in paying his 2015 return. Now that he is gone, I am having trouble understanding how far he came to completing the 2015 returns. Do you know of a way to find out if he ever filed? I don't think he did.

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Stephen G.

Sr Financial & Tax Consultant

Bachelor's Degree

9,284 satisfied customers
My great uncle recently died and left his home to my mother

Hello! My great uncle recently died and left his home to my mother and her sister (they are specifically named in his will as the inheritors of the house). They would like to sell the house through the estate (i.e., list the executor as the Seller of the house rather than themselves and have the proceeds paid directly to the estate's account) so that they don't have to mess with reporting the proceeds on their personal tax returns. Is this an acceptable way to handle the sale, and will they be okay with the IRS if the taxes (from a capital gain or loss) are handled in the settling of the estate? Thank you!JA: The Accountant will know how to help. Is there anything else important you think the Accountant should know?Customer: No, I think that covers everything I know to ask.

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

19,022 satisfied customers
I've recently started a new small business in South

Hi,I've recently started a new small business in South Carolina. Our company is a small, (as in me being the only person working) residential painting company. So far all is well but am at the point to where I need to be thinking about the taxes involved in the business. I've been in business now for a couple of months and have grossed about $10,000.00. I have been saving all my material, gas and equipment invoices that I've purchased for the business. Other small business owners that I know say I should do quarterly estimated taxing. I was also told that because I'm work for myself that I should be able to fill out a 1099MISC for myself with my tax ID number. This makes sense to me but unfortunately I've started my business in the last quarter so I'm sure I'll be expected to have everything to do my taxes. I've been painting all my life but am new to the business end of it. This is all very confusing to me. I seem to be getting the ball rolling okay as far as getting work and don't want taxes to be my cause to fail. I need to get this figured out. Any advice would be greatly appreciated. Thank you.

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PDtax

Owner

Master's Degree

7,248 satisfied customers
I have a potential client who thinks he should have taken a

I have a potential client who thinks he should have taken a Net Operating Loss in 2013, 14, and 15. It is now after Oct 15 of 2016. He thinks his accountant erred in not working out NOL for his company. His Acct. simply zeroed out the income and left it at that. The client thinks he should have had NOL over 100gs. Client has LLC. Is there any way to take NOL by amending returns, or are we simply too late???

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Stephen G.

Sr Financial & Tax Consultant

Bachelor's Degree

9,284 satisfied customers
Can I be penalized for filing business taxes late?

I received a penalty notice of $2,730 for our family S Corp for filing taxes for 2015 late. After two extensions, they were filed on 10/13/16 along with our family taxes. The income of the S Corp was $10,161 for the year. That was included as income on our personal tax return which resulted in a $831.00 overpayment of taxes. We have a history of paying our S Corp and personal taxes in this manner and that we have already received the $831 refund.

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Lane

JD, MBA, CFP, CRPS

Doctoral Degree

19,022 satisfied customers
My wife and I are contemplating either making a $20K

Good morning!My wife and I are contemplating either making a $20K donation or loan to a nonprofit organization and wanted your advice as to tax consequences.First a little background....I started this nonprofit almost nine years ago. It is a 501c3 organization. Approximately 85% of the organization's funding is derived from government grants. The key is that these grants are reimbursement grants, meaning that the nonprofit must first spend down the monies and then is entitled to reimbursement from the government for those allowable costs.For example, if I receive a federal grant for $100,000 and $50,000 of that is allotted for staff, then I must first spend down the $50,000 before the government reimburses the nonprofit the $50,000.You can quickly see that inherently tied to this funding scheme is the problem of cash flow because the nonprofit must first pay a period (usually a month-worth) of expenses before we are eligible for reimbursement. And this is where the problem has arisen.Usually, the turnaround time for reimbursement is 15 days. That is, 15 days from the date I submit the invoice to the government, the nonprofit receives the deposits. Between August and now, that timeframe has more than doubled, averaging 35 - 40 days between invoicing and deposits.The result is that the nonprofit spends two-plus months of expenses before it is reimbursed for the one month. For example, it was mid October before we received reimbursement for August expenses.While the nonprofit board and I recognize the inherent problems with this funding portfolio, we are working on fundraising to build up our cash reserves, the fact is that we won't be able to raise enough in the next month or two to build us a buffer for the lengthy reimbursement rate. I, also, have been taking meetings with the government entities responsible for the reimbursements, but you can imagine the bureaucratic mountain before me.That being said, my wife and I are contemplating making a $20,000 contribution, either as a loan or as a donation to the nonprofit to buffer the revenues enough that we can tolerate the 35+ day turnaround time until I have a chance to sort this out.The money for the contribution would come from my wife's 401K. Notwithstanding the generosity and kindness of my wife, the question for you is, what is our tax consequences to each model of contribution?Model 1:We take the loan from my wife's 401K for $20K. The loan is repaid at a rate of $268/month, automatically deducted from my wife's paycheck each month. The $20K is paid to the nonprofit as a loan. The nonprofit board approves the loan and becomes liable for the loan and promises to pay my wife and me $268 every two weeks or approximately $536 each month.What would our household tax liability be? Our thought is that the $20K taken from Meghan's 401K would be treated as income and that would put a significant dent in our tax liability. But do you have a sense of the magnitude of that liability?Model 2:We take the loan from my wife's 401K for $20K. The loan is repaid at a rate of $268/month, automatically deducted from her paycheck each month. The $20K is paid to the nonprofit as a donation. The nonprofit does not pay us back and we receive the tax deduction.In this case, by how much would the $20K donation offset our tax liability?Essentially, what would your recommendation be, treat it as a loan to CVHR or as a donation from a tax liability perspective?Incidentally, our joint household income (gross) is $150K.Any input on our personal tax liability would be greatly appreciated!

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Mark Taylor

Certified Public Accountant

Masters

1,980 satisfied customers
Jonathan Tierney" Looking over tax form 1041 and have

Jonathan Tierney" Looking over tax form 1041 and have several questions. This is for a revocable trust. According to the Attorney, the Trust was closed immediately after all distribution according to the trust. The Daughter of the decedents of the trust (both parents died together) appointed the Daughter as the Successor Co-Trustee and the beneficiary of all remaining assets. The final joint 1040 was filed for the decedents. There was two month left in the year, 2015. The decedents after death received a 1099-Int, principal payments and interest on an installment agreement of sale of a property prior to death. The amounts received was over $600. The Attorney states the trust was closed in 2015 but estate remains open until a settlement is reached for wrongful death. Trust files the 1041 and names the Successor Co-Trustee as the Beneficiary who should receive a K-1 for personal taxes? Correct?

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Mark Taylor

Certified Public Accountant

Masters

1,980 satisfied customers
I am selling my audiology business, an S-corporation. The

Hi Pearl,JA: The Accountant will know how to help. Please tell me more, so we can help you best.Customer: I am selling my audiology business, an S-corporation. The buyer assumed I would be including all the cash I have in the business accounts, including a CD I set up in 2008. I have not taken the cash out of the business at the end of the years, but I did pay taxes on it as personal income, so I reason I would be having to pay capital gains tax on it again if they "purchase the cash". I also reason the money in the accounts should not be included in the purchase price. It looks like double taxation would occur.JA: Is there anything else important you think the Accountant should know?Customer: I wonder haw to get a fair valuation of an audiology practice that is an S-Corporation.

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Mark Taylor

Certified Public Accountant

Masters

1,980 satisfied customers
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