Unanswered Tax Questions
Questions Asked by Users That Have Not Recieved a CPA Response.
View All Tax QuestionsBusiness Tax issue for non-us residents
Asked onMonday, August 19, 2024 by YIXIANGHi Team, I hope this email finds you well. I am writing to inquire about your free tax consultation and your tax service for setting up an international office for Beijing Drama and Film Culture in the USA. We are a leading distribution company specialising in copyright and original IP operation, with an international arm for animations and films. We offer comprehensive business solutions for producers and IP parties in China and worldwide, including project investment, programme production and distribution, licensing and merchanting. We plan to operate the international business line and to start distributing children’s content via YouTube and ott/iptv/vod platforms through a USA company ( the LLC, or a better business structure). We are thinking about registering the company in CA or WA state and operating it in LA. In the early stages, we are concerned about the general company set-up advice in the US for non-US residents to help us determine the right type of company, the best taxation options for the company owned by non-US residents, business structure, registration and operation location. Later, it might be expanded to general business tax services for our new US company. I normally work from 10:00-19:00 BJT(GMT+8), but I could accommodate your time to talk from 20:30 to 22:30 BJT. Looking forward to talking to you to learn how you could help us. Best, Yixiang Shirley Lin Assistant to CEO, International Distribution Assistant
Cybertruck qualification for IRS Residential Clean Energy Credit / Inflation Reduction Act Credit
Asked onSaturday, August 10, 2024 by NickI have a question regarding the IRS Residential Clean Energy Credit which allows for 30% of the costs of new, qualified clean energy property for your home installed anytime from 2022 through 2032. Specifically around "Battery storage technology". I'm not sure if you're familiar with the new Tesla Cybertruck but it has the ability to act as a battery backup for your entire home with the installation of another device called a Powershare. There's an interesting discussion on Reddit here (https://www.reddit.com/r/cybertruck/comments/18uboyv/using_a_cybertruck_for_an_irs_battery_backup_tax/) where people are arguing that due to this, you should be able to deduct 30% of the cost of the Cybertruck under this rule. Some are saying that the line “…other than property primarily used in the transportation of goods or individuals…” might disqualify it, but then others argue because it would be parked and plugged into the house more than it's driven on the road, that this doesn't disqualify it. There was another thread here (https://www.reddit.com/r/cybertruck/comments/1eoc7zi/cpa_agreed_that_cybertruck_is_eligible_for/) today where a few people said their CPA said that it does qualify. Currently the language is vague and I'd like to be able to take advantage of this credit before it's taken advantage of and changed.
Interest Expense for Oil Investment
Asked onTuesday, August 06, 2024 by VishalBased on my reading, for debt-financed acquisition of an LLC or S-Corp, the interest paid on that debt is deductible to offset any passive income. Link: http://archives.cpajournal.com/2000/0400/Departments/d45500a.htm#:~:text=Passive%20int I’m curious to know if I acquire debt to invest in an oil investment, where I will receive a Schedule K, will I be able to deduct that interest? If so, where would I be able to. Secondly, if I am not a general partner, I’m told that I can’t not take 75% of the investment as intangible drilling costs in Year 1 then it would be distributed through 5 years. I’m trying to find the literature for that. As well as, would that deduction go against active income?
Capital improvements/expenses
Asked onFriday, July 26, 2024 by SloanHi, just sold a house in California and am wondering if the items below are considered capital improvements that can be added to the basis, or capital expenses that can be deducted from the gain. If so, should that be done prior to calculating capital gains tax and other affected taxes? As well, is landscaping - perennials, shrubs, trees, irrigation systems - considered a capital improvement? Thank you. Master Bathroom Tiling Roof vents - Pest Control Carpet install - bdrm and media room Door build and install - main bath Door install/hardware Electrical work - interior Electrical work - exterior Electrical work/parts - interior Stair repair Garage door keyless entry install City permit costs Plaster wall repair Misc. Plumbing Misc construction int/ext Lower deck and pergola design Architectural services Media room remodel Architectural services Lower deck and pergola construction
1099
Asked onWednesday, July 17, 2024 by LindsayI am going to be moving to Canada in the next couple of months and in order to continue working with my current US employer, I will likely be moving to a 1099. I am trying to map out and understand how this affects my take home pay/how I need to pay taxes. Can you take a look at this https://we.tl/t-zZtLehkvwN and let me know if you think it is accurate? Any other insights would be greatly appreciated.
Exchange Real Estate for Company Shares
Asked onThursday, July 11, 2024 by GregMy 501(c)7 (a "hunting and fishing club") sales shares in the club to raise money to purchase properties for use by the share holders. There are a couple of shareholders or potential shareholders who would like to turn over their real estate holdings to the club in exchange for shares in the club. After such an exchange, the two would control more than 80% of the club. Is such an exchange allowed (perhaps under Section 351?) without tax consequences? If so, Is there a "holding period" during which the two shareholders may *not* sale their shares in whole or in part? In other restrictions or reporting requirements following such an exchange?
Concerning passing ownership small business to son and then son directly selling the business
Asked onSunday, June 30, 2024 by ThomSo my Father is retiring and is selling his business (a mom and pop Dry Cleaners in California), but he asked me that he wants to pass ownership to me before he sells the business to the buyer. Therefore, I would be the recipient of the money The reason why he wants to do this is because he does not want to lose his and my mothers medicaid as they have a variety of health issues and have heavily relied on it to live. If he sells the business as the owner he believes he would lose their medicaid coverage. Also, they have been ebt (or food stamps). My question is would this considered be legal first of all and if so how much tax would I be looking at. The total amount coming in from selling the business is $100k in total, with the incoming payments being split into 5 years with the first down payment for $20k, and installments of $1,500 every month after that. Plus, I as an individual make about $45k annually from my job. Thank you so much.
Minimizing Tax in Gift/Transfer and Sale of a Gifted Home
Asked onFriday, June 28, 2024 by BryleyMy great aunt sold my mom a home for $1 in the early 2010s, so my mom owns the home outright with no mortgage. It is now valued at $460,000. As part of her estate plan, she wanted to leave me the house. However, she decided that she wants to enjoy the proceeds with me while living, so she wants to either: - [ ] Somehow sell the home and - [ ] Gift me $200,000 of the proceeds to use to pay off debt, and - [ ] Gift me the remainder to use to buy a new, larger home in which both she and I live, and on which I pay the mortgage (so I can help take care of her after Dad passed away a few years back). Or: - [ ] Gift me or a trust the home directly to then sell to accomplish the same as the above. How can the above happen with the least tax consequences? Ideally, we wanted to put the house or funds in a trust of some sort to protect her (I.e., ensure she has partial ownership but the remaining equity transfers to me when she passes, ensure I’m required to use the first $200,000 to pay off debt, etc.), but if some sort of sale by her, gift to me, 1031 exchange, etc. is more tax-efficient, we’d prefer to go that route and accomplish the “protection” by other means or contracts.
square taxes paid to gig employees
Asked onWednesday, June 19, 2024 by JeannetteI had gig employees that were paid through square and taxes were held out for them as well. Do I enter this on my LLC or personal tax forms someplace? As I am the owner of the business who set up the square payments for coffee delivery services
IRA tax
Asked onWednesday, May 29, 2024 by PeterI deposited $7,000 into my traditional IRA account this year. I invested the $7,000 in stocks and earned $1,000. I now want to transfer my $7,000 contribution plus $1000 earning from the traditional IRA to a Roth IRA account. However, I don't know how the tax will be calculated when I file my tax return this year? Do I only need to pay tax on the $7,000 contribution, or do I need to pay tax on the $8,000 ($7,000 contribution plus $1,000 earning)? I heard that people only need to pay tax on the amount contributed into the Roth IRA, but not on the earnings generated by the contributed amount, is this correct?