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Unanswered Tax Questions Bookkeeping and Write Up Business Formation Credits Deductions and Writeoffs Education Family Issues Frequently Asked Questions Health Care Home Ownership Investment and Finance Miscellaneous Non Resident Tax Issues Payments and Penalties Personal Taxes Retirement Self Directed IRA Small Business Tax Forms Tax Law Changes Tax Tips Terminology All Questions Ask a New Question

Nonresident Tax Issues

Applying for ITIN

Asked Wednesday, January 21, 2026 by Haider

Hello, I am reaching out to seek information about ITIN registration. We have an LLC registered in Wyoming and want to apply for ITIN. Can you please share the details about the process, timeline and costs associated with this. Thanks

Quick Answer:

An Individual Taxpayer Identification Number (ITIN) is issued by the IRS to individuals who need a U.S. taxpayer identification number but do not have, and are not eligible to obtain, a Social Securit...
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Personal Taxes

Tax Management and Options for Financial Hardship

Asked Friday, January 16, 2026 by Monserrat

I would like advice on strategies for managing federal tax payments and ensuring compliance while on an installment plan with the IRS. Additionally, what options are available for individuals facing financial hardship regarding their tax obligations?

Quick Answer:

For managing an IRS installment plan, critical strategies include making every payment on time to avoid default. It's also essential to file all future tax returns on schedule and pay any new tax liab...
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Family Issues

Sold my moms house in 2025

Asked Friday, January 09, 2026 by Scott

My mother moved into a Memory Care facility January 2025. In order to afford the cost we sold her primary residence in October 2025. The house was held in our Family Living Trust, of which I am co-trustee and now have POA for her, since 2 doctors verified she is unable to handle her affairs. Need advice on preparing a 2025 tax return for her or the Trust. Also need advice on limiting the tax liability for the gain etc…Thank you.

CPA Answer:

Scott, in most cases this sale is reported on your mother’s 2025 personal tax return, not on a trust return, as long as the Family Living Trust is a revocable grantor trust. The IRS still treats the home as owned by her for tax purposes. Your Power of Attorney and role as co-trustee do not change that.

The main tax issue is the capital gain.

If this was her primary residence, she may qualify for the $250,000 home sale exclusion. To qualify, she must have owned and lived in the home for at least 2 of the 5 years before the sale. Time spent in a memory care facility due to medical reasons does not automatically disqualify her. The IRS allows a taxpayer who becomes physically or mentally unable to care for themselves to still be treated as using the home, as long as the 2-out-of-5-year rule is met.

The gain is calculated as:

  • Sale price
  • Minus original purchase price
  • Minus capital improvements
  • Minus selling costs (commissions, closing fees)

If the gain is under $250,000, there may be no federal capital gains tax. If it is higher, only the excess is taxable.

What you should confirm now:

  • Whether the trust was revocable at the time of sale.
  • How long your mother lived in the home before entering memory care.
  • The original purchase price and improvement records.
  • The closing statement from the sale.

A separate trust return is only needed if the trust became irrevocable or had its own taxable income.

Handled correctly, many families owe little or no tax on this type of sale.

Answer Provided by: Melissa De Bedout Melissa De Bedout
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Personal Taxes

Retirement accounts

Asked Thursday, January 08, 2026 by Rick

Hi I have questions regarding distributions from an investment account. If I move to another financial institution what are the taxes? If any? Thanks

Quick Answer:

Moving an investment account to another financial institution generally does not trigger taxes, provided it's a direct transfer of assets (in-kind) between custodians. In this scenario, you aren't sel...
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Deductions and Write-Offs

Tax liability

Asked Friday, January 02, 2026 by JOSEPH

Hello, I Own a llc. In Connecticut and do Excavating. I purchased .property in 2025 for 200k to ise for business operations. Im trying to figure out how much my tax liability will be come tax season.

Quick Answer:

The purchase of property for business operations in 2025 is a significant event. However, the $200,000 cost itself does not directly reduce your tax liability dollar-for-dollar in the year of purchase...
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Small Business

LLC Disregarded Entity

Asked Monday, December 29, 2025 by Ron

Filing business income (1099) and personal income(W2) When I contract work as a 1099, the payments will be routed to my business bank account and report tax as business income. However, I work one client as a W-2 employee. Paycheck will go to a personal bank account and file as personal income. Please let me know if this is appropriate for tax filing. Should I use my physical business address or mailing address for Tax filing?

Quick Answer:

Your approach to separating 1099 contract income and W-2 employee income for tax purposes is appropriate. Payments for 1099 work, routed to a business account and reported as
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Personal Taxes

mortgage interest deduction

Asked Monday, December 29, 2025 by Frederick

I have recently paid off a large portion of my reverse mortgage which included a significant amount of interest charges. Are the interest charges deductible and if so can the amount be carried over from one year to the next?

Quick Answer:

Interest paid on a reverse mortgage is generally not deductible until the loan is fully repaid. This means that even if you've paid off a significant portion, including accrued interest, the interest...
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Personal Taxes

Interest deductions

Asked Friday, December 26, 2025 by Frederick

I have paid off a portion of my reverse mortgage which includes a large amount of interest. Is that interest deductible and can I carry over any of it into the following year?

Quick Answer:

Interest paid on a reverse mortgage is generally not deductible. For mortgage interest to qualify as a deduction, the loan proceeds must have been used to buy, build, or substantially improve your hom...
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Nonresident Tax Issues

Gift taxation foreign person

Asked Thursday, December 18, 2025 by Sandra

Non-US citizen and non-US resident (nonresident alien) with a US bank account want to gift a total of up to $100,000 in cash this year to 2 children who are US citizens and US residents. The gifts will be wire transfers or checks from their US bank account. Questions: Is this gift subject to US gift tax for me (the donor)? Is the gift considered taxable income to my children (the recipients)? Is it up to 100k per year with no reporting filing 3520?

Quick Answer:

As a nonresident alien, your gift of cash, whether from a U.S. bank account or wired, is generally not subject to U.S. gift tax. Cash is considered intangible property and is
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Small Business

I have less than 10,000 in revenue annually. How do I file my taxes?

Asked Tuesday, December 16, 2025 by J

I have less than $10,000 in business revenue annually. What do I need to consider regarding tax preparation?

Quick Answer:

For businesses with less than $10,000 in annual revenue, tax preparation primarily involves reporting your business income and deductible expenses. If operating as a sole proprietorship, this is typic...
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