Questions Answered by D. Mathew Blackburn

Q: ISO: business/tax lawyer

1 Answer | Asked in Tax Law, Business Formation and Business Law for Colorado on
Answered on Oct 20, 2018
D. Mathew Blackburn's answer
Tax is not restricted to only attorneys that are licensed in the state. I have cases in about 10-11 different states. I'd have to go count them to be sure.

A Colorado attorney can help you with this issue.

Q: Do International Business's pay state taxes in colorado if the vendor supplied to an international company not located

1 Answer | Asked in Tax Law for Colorado on
Answered on Oct 5, 2018
D. Mathew Blackburn's answer
It's going to depend on the goods and services provided. Is the company paying for a service or a good? Services are not subject to sales tax, goods are. If I have my brakes changed am I buying brakes, the installation service, or both? The first step would be an analysis of what was purchased and how does CO treat that purchase for sales tax.

For income tax purposes if the international company is buying from you and selling to a 3d party that you then deliver the stuff to, it...

Q: Colorado is claiming that I own them back taxes for a year that I didn't live there or earn any income there.

1 Answer | Asked in Tax Law for Colorado on
Answered on Sep 20, 2018
D. Mathew Blackburn's answer
Colorado is incredibly aggressive regarding residency for income tax purposes. You're going to have to provide evidence that you were not physically in Colorado and that you had changed your residency to Utah. Here's a CO Dept. of Revenue ("CDOR") FYI publication explaining resident/non-resident status. https://www.colorado.gov/pacific/sites/default/files/Income6.pdf

I would start with sending in the applicable documents to establish residency in Utah. If CDOR rejects those I would...

Q: I'd like to give stock in my will -- how would that get taxed?

1 Answer | Asked in Tax Law for Colorado on
Answered on Sep 14, 2018
D. Mathew Blackburn's answer
When an individual passes their property receives a step-up in basis to the current Fair Market Value either on the date of death or what's call the alternative valuation date. There are reasons to pick either I won't go into that right now.

What is basis? It's what you paid for the stock. So you buy 1 share of Acme at $40. If you sell it at $90 you pay tax on the gross revenue less basis 90 - 40 = $50

If you own the stock at death the basis "steps up" from $40 to $90 (FMV on...

Q: Purchased a Tv from Best buy for 3500 they delivered and installed a Tv to my wall that cost 5000. Do I have to give bk

1 Answer | Asked in Business Law for Colorado on
Answered on Aug 31, 2018
D. Mathew Blackburn's answer
Can you resubmit the question it doesn't really make any sense and I can't understand what you're asking. Thanks.

Q: What kind of deduction can I take on rental property improvements?

2 Answers | Asked in Tax Law for Colorado on
Answered on Aug 23, 2018
D. Mathew Blackburn's answer
If it's a repair you deduct it in the year it's incurred. If it's an improvement you adjust basis and depreciation.

Any expense that is incurred under the ordinary and normal course of a trade or business is deductible. 26 USC 162.

Q: A local bookkeeper prepared our taxes this year. She made mistakes and we want to know what legal actions we can take.

1 Answer | Asked in Tax Law for Colorado on
Answered on Aug 3, 2018
D. Mathew Blackburn's answer
The costs of pursuing legal action for negligence, fraud, etc... are rarely worth the time and costs. You would have to file in the county where you signed the service agreement, or where the BK's place of business is. Filing fee will probably be more than you paid for the return.

If you paid by credit card you can request a chargeback.

I would move on and hire a competent preparer next year.

Let everyone know this person doesn't know how to do returns, just don't...

Q: Question on Retail Lease

3 Answers | Asked in Business Law, Contracts, Real Estate Law and Landlord - Tenant for Colorado on
Answered on Jul 14, 2018
D. Mathew Blackburn's answer
File a lawsuit. If you have a contract and the other party refuses to honor the contract you take them to court and ask a judge to either make them do what they said they would do or to give you damages.

Q: Are life insurance and jointly-held property considered part of the deceased's estate, and thus subject to taxes?

1 Answer | Asked in Tax Law for Colorado on
Answered on Jul 5, 2018
D. Mathew Blackburn's answer
Usually not, but can't be sure until I've seen the docs.

Q: Are there any Colorado penalties for withdrawing from a 401a account early and when does the IRS assess it's 10% penalty

1 Answer | Asked in Tax Law for Colorado on
Answered on Jul 3, 2018
D. Mathew Blackburn's answer
There's no state level penalty, but you can generally exclude income as taxable to CO if you wait. Colorado FYI Publication 25 https://www.colorado.gov/pacific/sites/default/files/Income25.pdf

The federal penalty is imposed on your F1040 so you'll incur it when you file your return.

Exceptions to the additional 10% tax apply for early distributions that are:

Made to a beneficiary or estate on account of the IRA owner's death

Made because you're totally and...

Q: Today I received a Letter from the city of Lansing, Income tax ordinance, section 99,

1 Answer | Asked in Tax Law for Colorado on
Answered on Jun 16, 2018
D. Mathew Blackburn's answer
If you believe the notices are in error you would need to respond and provide evidence that the assessment is incorrect.

Q: What should I do if I made an honest mistake on my income tax return?

1 Answer | Asked in Tax Law for Colorado on
Answered on May 18, 2018
D. Mathew Blackburn's answer
The return should be amended using Form 1040X.

Once the return is filed the additional tax owed should be paid and you'll receive a notice for failure to pay penalties. At that point you can either pay the penalty or request an abatement on Form 843 requesting either "first time abatement" or "reasonable cause".

I would suggest contacting a professional so you can have a conversation about whether the "mistake" creates a situation where you need to amend and how to proceed.

Q: trustee kept my distribution (stole) but sent me a k-1 do I have to pay tax

1 Answer | Asked in Tax Law for Colorado on
Answered on Apr 28, 2018
D. Mathew Blackburn's answer
Assuming that the k-1 is correct you are required to report and pay any tax owed. Recovering any money owed to you is a seperate issue.

Q: I'm a designer. I hired a contractor. He built kitchen cabinets and hired a finisher to finish them.

1 Answer | Asked in Business Law for Colorado on
Answered on Apr 28, 2018
D. Mathew Blackburn's answer
It would a county court case which has jurisdictional authority on cases between $7,500 and $15,000. You would have to determine venue (Which county to file in) under the court rules. Generally you would sue everyone that did not fulfill their obligations under the contract. In this situation it may be the finisher only or the finisher and the contractor.

You should look for an attorney, county court is complex.

Q: Purchasing an existing company, trying to figure out where to incorporate for best tax advantages.

1 Answer | Asked in Business Law and Tax Law for Colorado on
Answered on Mar 24, 2018
D. Mathew Blackburn's answer
Generally the best approach is to register in the state of operation. Also be aware you will pay income taxes to CO regardless of where you set up the LLC because an LLC is a passthrough entity and you are a CO resident.

You need to retain a business/tax attorney that can advise you on the legal and tax ramifications of not only where to set up the LLC but also state sales and income tax nexus.

Q: We are a 22 year old software company that recently received a judgment from a customer for a large amount.

1 Answer | Asked in Business Law for Colorado on
Answered on Mar 14, 2018
D. Mathew Blackburn's answer
The developer, even though he wrote the software, would not be able to sell it without a license. This assumes the S-Corp owns the software either as a contributed asset or as work for hire. The judgement holder would likely seek a writ of garnishment to seize the rights to the software then sue the developer for infringement. If the developer want the software he would need to buy it from the S-corp at fair market value. If it's distributed to him or sold for less than FMV it would be...

Q: What forms do I need to send the IRS for my one and only part-time employee?

1 Answer | Asked in Tax Law for Colorado on
Answered on Jan 27, 2018
D. Mathew Blackburn's answer
You will need to file and remit tax for the 944 for withholding and SS, 940 for futa, uitr-1 for CO unemployment tax, and the CO withholding forms. Along with the w-2. You also have to file a notice of hiring with the CO department of labor.

Q: In Colorado, can you legally write up your own contract for your business, or must a lawyer provide said contract?

1 Answer | Asked in Business Law for Colorado on
Answered on Jan 22, 2018
D. Mathew Blackburn's answer
You can absolutely draft your own contracts for your business without an attorney. It's not a good idea but you can do it. What is illegal, unauthorized practice of law, is to advise others on the legalities of contracts.

Regarding enforceability of the contracts you write is an entirely different issue. You're going to do the best you can and you're taking your chances that you're just as good as or better than someone who studied law for three years, passed the bar exam, and then...

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