Unanswered Tax Questions
Questions Asked by Users That Have Not Recieved a CPA Response.
View All Tax QuestionsReversing cash flow from mortgage deductions
Asked onFriday, December 15, 2023 by CavHi. I’d like to figure out how to get the cash in hand result from a deduction for year 1 of ownership of a property. I realize the real-life scenario is more complicated than this; but would love to understand a simplified method first. Simple scenario: 1MM property. 20% down. 800k loan. Let’s say 7% interest for sake of argument. 30% tax bracket. I think you’re supposed to figure out the ratio of 750k of 800k because of the cap. So that’s 0.9375. Just to keep the math easy, let’s say that the interest total is 55k a year. How do I figure out what that represents as cash in my pocket? I thought you should take the 55k * 0.9375 to get the max deduction of ~$51,500. Then you multiply that by tax bracket. .3 * $51.5k = ~$15.4k So the cash in hand result after the deduction is about ~15.4k? Any help is appreciated.
Why did my accountant opt for accrual method?
Asked onFriday, December 15, 2023 by JI am a one-person LLC (C-corp) providing services, with average revenues $150-$200K per year. Have few vendors paid on an account basis; no inventory at all. Why would was I set up on accrual accounting method if I fall under the gross-receipts threshold and qualify for cash method in all other ways. Isn't cash method simpler?
Forming a Non-Profit
Asked onThursday, December 14, 2023 by PaulaOne of my clients has large profits this year and has decided to follow her dream of having a non profit organization providing the same services as the for profit organization. The for-profit will provide the supporting funds. What are my steps, Can we put this money in an account today towards the business even though we have not formed it/ registered it yet and it wont be completed before year end?
Two EV tax credits in one year for two vehicles
Asked onWednesday, December 13, 2023 by ChristopherWe just bought a Tesla and are thinking about buying a second, if we will get the $7500 tax credit for the second vehicle as well. Can you get more than one EV tax credit if you buy a second car?
Can I transfer Sole Prop. earnings into my LLC?
Asked onWednesday, December 13, 2023 by NickHi, I have an LLC but do not use it. I work with a partner at our clients pay him and he then gives me my percentage of the earnings. I file my taxes as a sole prop. that said, I'd like to open a solo 401K and to do so with a brokerage like Vanguard or Schwab, they require an EIN. I was wondering two things: 1. can I just use my LLC EIN even though I have no earnings through it specifically and 2. if I need to have earnings, can I simply transfer that into the LLC?
Sell of home before or after divorce is final?
Asked onTuesday, December 12, 2023 by EdGetting a divorce and have positive equity in our home. One partner says to wait to sell home prior to finalizing divorce for capital gains reasons. I'm not sure about that. Is there any downside to finalizing divorce THEN selling the house? Thanks.
CA Settlement Distribution
Asked onMonday, December 11, 2023 by EricaI’ve been awarded a settlement after being sexually assaulted at work in CA. A portion of it is lost wages (taxable). What is the best way to distribute the remainder funds to save on taxes?
An amazing tax opportunity? Am I correct?
Asked onSunday, December 10, 2023 by FrankMy son will have no taxable income this year after the standard deduction is applied. He has considerable capital gains from a stock portfolio I created for him 8 years ago (approx. $450,000). Is it true that he will not owe ANY capital gains taxes if I sell all the stocks in his portfolio, providing I don't buy them back within 31 days?
Best entity for tax benifits as a single person with low business income
Asked onSunday, December 10, 2023 by AjayHi, I would like to form US business entity from India. I already had a discussions with companies like doola and incfile for this. But I'm unable decide the best entity type for me. Here is my situation: I need US business entity and business bank account for the purpose of Google AdSense and also for Affiliate marketing payments. I will be the sole owner of the business. Infact I do not even take any amount as salary because the income from this business would be very low initially and it the income will not be a constant income. I might get $500 in one month $100 in another month or it could be $5000 in another month. So it is extremely fluctuate from time to time. So I do not take any salary from this and I do not employ anyone. i will handle all the things and take the profit at the end of the year. But every month I will take some amount as a freelancer. So whatever amount is left at the end of the month after all other business expenses, I will take that as the freelancer amount and I will show this as a business expense at the end of the year for tax filling. So, basically, there would not be any amount left to distribute to me as a profit. Because I'm taking all the remaining amount after deducting business expenses as a freelancer amount. so there won't be any amount left to distribute. So, I'm thinking S-corp for this. But my question is that there is a "reasonable salary" condition in this entity. Does this apply to my situation? Thank you,
Beneficiary ROTH
Asked onFriday, December 08, 2023 by TerryCan I move money from a Beneficiary ROTH (10 year rule) to a regular Roth (owner is 62) If so is there a special way to do it?