Unanswered Tax Questions
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Closing an LLC and selling assets to one partner - what are the IRS tax implications?
How do I close an LLC that has never generated a profit and sell the primary asset to me as an individual? What are the IRS tax implications? A partner and I created an LLC to purchase and flip houses during COVID-19. We registered as an LLC in another state (with an S-corp election with the IRS) and bought our first fixer-upper house in 2021, intending to flip it. We made some material improvements and had some ongoing expenses which were capitalized and deducted from our tax returns using an 1120S, resulting in a loss each year for that LLC. This loss was passed to us on a K1, reducing each partner's taxes proportionately. To use round numbers, we purchased the house for $150k; we had expenses of $15k, $12k, and $10k in 2021-23. It was never put into service, so there is no depreciation. We will also not consider that the house improved in market value since this increase is minor. We will shut down the LLC after this one asset is sold or transferred to one of us. The IRS certainly has some rules about these asset transfers to avoid abuse, but it is unclear where to look. Could I sell the house to me from the LLC at the original price ($150k)? Or at the price of the house ($150k) plus the material improvements (let's say these are $20k) = $170k? Or for $1? Or another value that makes sense? What are the steps necessary?
Asked Thursday, December 12, 2024 by Christopher H.Sign in to Answer
Foreign Contractor Advice
Hello, I have worked with a foreign contractor on smaller projects under the $600 requirements for 1099-NEC. But recently I have been getting more work and want to bring this contractor on board with a more formal agreement and more long term projects. My questions involve what the tax ramifications are and if there's anything I need to fill out in regards to foreign contractors. Additional information: Resident State: Michigan Contractors country: Russia Industry: Vtuber Rigging (Highly specialized, and theres not many people in the USA or even the world that do this) Im open to hiring a CPA to help with this if this is more complex than what can be answered here.
Asked Wednesday, December 04, 2024 by Jason W.Sign in to Answer
Mom is my dependent
My mother moved in, in June and is my dependent. Should I update my W4 now? Can I claim her through June when I file early next year?
Asked Saturday, November 23, 2024 by Justin D.Sign in to Answer
Profit & Loss Statement
Cost of Goods, Business Loss Due to Crime Civi Suit
Asked Saturday, November 23, 2024 by PATRICIA J.Sign in to Answer
I am renting my property to a family member. I am renting this property below market value. Do I have to declare this as income?
I am renting my property to a family member. I am renting this property below market value. Do I have to declare this as income?
Asked Friday, November 22, 2024 by Paul Y.Sign in to Answer
Sale of business, owner financed, pay all tax upfront??
We are selling our business as a Membership Interest Sale (according to the attorney). We are seller financing - collecting a 20% down payment on Jan 1 2025 and will collect monthly payments for the following 6 years, amortized over 9.5 with a balloon payment due at the end. Our local CPA tells us that we will owe taxes in 2025 on the full sale price amount, even though we won't collect that money in 2025. Is this correct and/or is there a way to not have to pay so much up front? Sale price is 300k, down payment is 60k and he is telling us that the majority of that down payment will go straight to taxes. If it's helpful, we have structured it as 50k assets, 250k goodwill, but can change that in the documents that have yet to be signed..
Asked Friday, November 08, 2024 by Melissa C.Sign in to Answer
EIN update with IRS
Hello, I have formed single member LLC in Wyoming now i need to change it to multi member LLC. Please advise how to update EIN with IRS.
Asked Wednesday, November 06, 2024 by Aziz A.Sign in to Answer
Taxes return
I have a business license, I run my own business through Amazon.com as a seller, and this year I have been breaking even on my sales and advertising cost most of the year. Would I be able to to deduct that advertising cost for a return?
Asked Tuesday, October 29, 2024 by Jonas Q.Sign in to Answer
Closing C-Corp with IRS
Hello, Need Help Closing a C-Corporation with the IRS. Tax Details: • Formation: 2012 • Filed Tax Returns & Paid Taxes: 2012, 2013 • No Tax Returns Filed: 2014 to 2023 • Business Activity: No transactions from 2014 to 2023 • State Status: o Administrative Dissolution: 2017 o Formal Dissolution Planned: 2024 How to properly close your C-Corporation with the IRS by fulfilling all federal tax obligations, including filing all required tax returns and forms, and addressing any potential penalties?
Asked Wednesday, October 23, 2024 by DEVENDRA S.Sign in to Answer