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Pearl JA: The Accountant will know how to help. Please

Customer Question
Hello Pearl JA: The Accountant will...
Hello Pearl
JA: The Accountant will know how to help. Please tell me more, so we can help you best.
Customer: I have moved to Puerto Rico, but own 80% of an S Corporation in California. I was thinking the best way to handle this was to dissolve the S Corp in California then start a new company in Puerto Rico. What do you think?
JA: Is there anything else the Accountant should be aware of?
Customer: My 20% partner will be staying in California.
JA: OK. Got it. I'm sending you to a secure page on JustAnswer so you can place the $5 fully-refundable deposit now. While you're filling out that form, I'll tell the Accountant about your situation and then connect you two.
Submitted: 1 year ago.Category: Tax
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Customer reply replied 1 year ago
We are a software company that gives our software away for free but charges a monthly subscription fee for customer support. Our customers are month to month with no obligation to continue with support each month. My partner wants to continue to do support in California and I want to handle the subscriptions and development in Puerto Rico. We are wanting to try and do this with the least amount of tax consequences if any.
Answered in 4 hours by:
4/30/2016
Tax Professional: Angie, Tax Preparer replied 1 year ago
Angie
Angie, Tax Preparer
Category: Tax
Satisfied Customers: 226
Experience: Bookkeeping, Profit and Loss, Balance SheetsAll types of US Taxes, Tennessee taxes, Personal, business, payroll, sales tax etc.
Verified
This is an extremely good idea in my opinion. Puerto Rico is a business owners dream. There are many tax advantages for doing business there rather than in the US. You will need to dissolve the S Corp in Ca, open a new business in PR, and start a fresh set of books. I am attaching a pdf document about doing business in Puerto Rico. If you are already there, find a local accountant and schedule an appointment so they can get you on the right track .
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Customer reply replied 1 year ago
Hello Angie,
I can't rate you yet because your answer simply repeated what I said in my explanation. I have already spent tens of thousands of dollars, uprooted my family, talked to numerous people, read everything there is to read on the subject and moved my family to Puerto Rico. My question was not about should I do it or not, I already have!!! As I said in my explanation, the plan was to dissolve the S-Corporation and start a new company in Puerto Rico. That part I knew. What I was looking for from you was the best way to handle the moving of the assets of the company to Puerto Rico without triggering tax consequences with California or the IRS. I understand this is a difficult question and probably requires someone with experience in IP valuation and all the intricacies of Transfer Pricing. If you feel you can answer it confidently or have experience with this type of thing, then please do. If not and it is outside your expertise, I will respect that also. Thanks, Mark
Tax Professional: Angie, Tax Preparer replied 1 year ago
Your original question, as I received it was ". I was thinking the best way to handle this was to dissolve the S Corp in California then start a new company in Puerto Rico. What do you think?" I will opt out so someone else can field your question.
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Customer reply replied 1 year ago
Angie, The last sentences in my explanation were "My partner wants to continue to do support in California and I want to handle the subscriptions and development in Puerto Rico. We are wanting to try and do this with the least amount of tax consequences if any." Those were the crucial portions of the question. I apologize for not making that more clear. Trust me, I understand the complexities of what I am asking and I'm sure it will take someone who has done this numerous times to have the best answer. I have gotten a lot of advice, all of it different with nobody really coming up with a clear path forward. I have talked to Tax Accountants, M&A attorneys, ex IRS Auditors and even the former US Attorney for the Caribbean district who adjudicated these types of cases for the IRS in St. Thomas years ago. I thought I would try your service to see if by luck I would find a better answer. I just need to get it right so I don't throw up any red flags and leave myself open for unpaid taxes and penalties if done wrong. Please don't take what I said negatively, I would have been surprised if you had experience in this type of situation. Most people wouldn't. Thanks again.
Tax Professional: Angie, Tax Preparer replied 1 year ago
I didn't take it negatively, I apologize if it came across that way. Opting out opens the question to other experts who may be able to assist you better than I.
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Angie
Angie
Angie, Tax Preparer
Category: Tax
Satisfied Customers: 226
226 Satisfied Customers
Experience: Bookkeeping, Profit and Loss, Balance SheetsAll types of US Taxes, Tennessee taxes, Personal, business, payroll, sales tax etc.

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