I need advice on something my father proposed, My father is
I need advice on something my father proposedJA: The Accountant will know how to help. Please tell me more, so we can help you best.Customer: My father is a truck driver (owner/operator) who has failed to do his taxes for a few years now and currently has a tax lien on him for roughly $12,000. I am a full time student with a lack of income. Addressing his tax situation is my fathers #1 priority but he wants to lower his taxable income regardless. He plans to retire to his ranch in Mexico in the next 3 to 5 years, but wants to leave my younger brother and I some money before he goes. So he proposed a plan: He claims that if we simply transfer the ownership of his semi truck and trailer to my name and he files some paperwork with the company he works under currently, his paychecks will be made out to me instead. I would then open a business bank account for those paychecks and pay my father as a 1099 employee $2000 a month. He currently grosses about $10,000 a month before expenses and nets about 4 to 5 thousand after fuel, truck maintenance, repairs, etc. This proposition would provide my brother and I with a good amount of money in the bank over time and, more importantly, an income on paper that would allow us to get approved for a better rental property, improve our credit, or even one day be able to buy a home of our own. My concern is that my father is oversimplifying this process or maybe he might be misinformed and its not even possible at all. If it is possible I need to know how it would effect me and what I would need to do to make it happen. How would I go about doing my own taxes? Are there any negative consequences that can arise from doing this? Any advice, insight, or opinions will be greatly appreciated. Thanks!JA: Is there anything else the Accountant should be aware of?Customer: I think thats everything
JD, MBA, CFP, CRPS
I need to know if I am properly accounting for a recurring
I need to know if I am properly accounting for a recurring set of transactions in Quick Books. I am a member of an Internet Service (IS) to obtain projects for my woodworking business and I receive payments via ACH transactions direct to my bank account that are net of the IS commissions and fees. I have been preparing an Invoice in QB that shows the cost for the product which posts as an invoice in my Accounts Receivable as a debit for the full amount of the transaction including the sales tax and then the product amount posts to a Sales account as a credit and the state sales tax posts as a credit to the sales tax payable account. Once received the net payment posts to my bank account as a debit and to my receivables account as a credit. At that point I have a difference between the total invoice amount and the payment which represents the commissions and fees that are withheld by the IS. To account for that I have been preparing a credit memo for that amount which posts to the receivables as a credit and to the cost of goods sold Merchant account fees account as a debit. My concern is if this is a proper way to account for the expense of the commissions and fees. I have this type of situation for every project that I complete and in the past because the ACH payment went direct to the bank account I forgot to make the other entries and now at the end of the year I need to go back and correct the situation in the manner I described above but do not want to do so if the procedure is not correct or does not reflect accurate accounting for the commissions and fees which I am charged to be a member of the Service. Thank you for your help.For example, here are the figures for one of my projects:Item Acct Debit CreditPlaque Sales 225.00Tax 11.93Receivables 236.93Payment Bank 207.74Receivables 207.74Crd Memo CGS 29.19Receivables 29.19
Suppose a US individual and a non-US individual are
Suppose a US individual and a non-US individual are shareholders of a c-corp, do they own tax when they withdraw assets (could be either real property/capital contribution/intangible asset) from their outside basis in the c-corp to their personal accounts? Thanks.
I have a land contract on the house I bought. The person I
I have a land contract on the house I bought. The person I bought it from will not give me her SSN so I can file my taxes. I want to know what my options are.JA: The Accountant will know how to help. Is there anything else the Accountant should be aware of?Customer: no
For USA Tax purposes, when do I need to provide 1099's to a
For USA Tax purposes, when do I need to provide 1099's to a contractor and/or supplier? My company is a C-Corp in Delaware if that is important to know. If I don't provide 1099's what can the IRS do to my company (fees, legal action...). Thanks.
Vocational, Technical or Trade School
I'm lying a seller 23,800 a month for 84 months in a
I'm lying a seller 23,800 a month for 84 months in a business transaction.JA: The Accountant will know how to help. Please tell me more, so we can help you best.Customer: what is the present value at current commercial ratesJA: Is there anything else the Accountant should be aware of?Customer: I misstated paying
Aloha. This in Hawaii. I have another question for you. If
Aloha Mark. This Chris in Hawaii. I have another question for you. If my dad uses 100000 cash from his refi to buy another house and then sell his old house for 100000 more than he bought it for what is the cost basis for the old house when he sells it? will he still have to pay capital gains tax on the old house when he sells it?