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Questions Answered by Eric Steven Day
1 Answer | Asked in Tax Law for Utah on
Q: Will I have to pay taxes on the sale of my house?

I have lived in my house for the last 20 years. For the last year, I have lived with my daughter and her husband at their house in the same town. The reason I have not lived in my house is that I allowed my son and his family to live there for a short period while he transitions from Texas to Idaho... Read more »

Eric Steven Day
Eric Steven Day answered on Jul 20, 2018

You will not have to pay taxes on the income of the sale of a personal residence for up to $250,000 (single taxpayer)/$500,000 (married filing joint taxpayer) of income. However, you must meet the ownership and use test:

During the 5-year period prior to the sale of the home, you must...
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1 Answer | Asked in Tax Law for Arkansas on
Q: My brother had a irrevocable trust before his death in 4/18. He had already paid taxes on everyhing for 2017.

He lived in Missouri. Do I pay taxes on this in Arkansas?

Eric Steven Day
Eric Steven Day answered on Jul 19, 2018

If you are the beneficiary of the trust and the trust document calls for you to receive the income from the trust than you will likely have to pay taxes on any amount of income generated in other states to their taxing agency as well as to yours in Arkansas. However, a lot of the determination on... Read more »

1 Answer | Asked in Tax Law for North Carolina on
Q: In March I filed my taxes via sprintax and paid what I owed. But I forgot to mail the tax documents. Am I in trouble???

I am an international student and this was my very first time filing taxes, so I was completely confused on a lot of things. I filed using Sprintax and paid the $92 I owe the state of North Carolina online as well. But the problem is, I didn’t know that the next step was to mail the signed... Read more »

Eric Steven Day
Eric Steven Day answered on Jul 19, 2018

Assuming that you paid the full amount due on the tax return in a timely manner you shouldn't have anything to worry about. Most states as well as the federal government base any penalties related to the late filing of a tax return on whether or not their is still a liability when the return is... Read more »

1 Answer | Asked in Tax Law for Virginia on
Q: All of my Mutual Funds ans stock accounts are held jointly with my wife. If a die, what are the tax consequences?
Eric Steven Day
Eric Steven Day answered on Jul 18, 2018

If your wife takes over the account at your death, there will be no tax consequences other than the annual tax consequences of the trading activity within the account. You can pass your estate to your wife tax free.

1 Answer | Asked in Tax Law for Florida on
Q: I just Got a collection notice that said I owe $1500 in taxes to South Carolina from 2006

Im sure I filed but there must have been an error I don’t remember ever getting a large refund from state taxes.I think it’s past the statute of limitations it’s 12 years old

Eric Steven Day
Eric Steven Day answered on Jul 17, 2018

Federally, the statute of limitations never starts to run until you actually file a return. Many states have his same policy. Sometimes they will look at your income and generate an amount due based on a single filed, but this does not start the statute, you will still need to file your own... Read more »

1 Answer | Asked in Tax Law for Washington on
Q: I quit my NC Job & moved to WA late 2017; got a bonus from NC job in 2018. No work/resident in NC 2018. NC Tax on bonus?

I left my Raleigh NC job at the very end of 2017. In 2018 I didn't work any hours for my NC job nor was I a resident. I moved to WA state where there is no state income tax and I work at a full time job in Richland WA. If I didn't live in NC or work in NC....and a NC company sent me a bonus check... Read more »

Eric Steven Day
Eric Steven Day answered on Jul 17, 2018

The bonus that you received was in relation to work that was performed in NC, therefore, NC can tax you in relation to that income. If the income was produced or "earned" in that state's jurisdiction, that state has the right to tax that income. The other way that a state would be allowed to tax... Read more »

3 Answers | Asked in Consumer Law, Tax Law and Education Law for California on
Q: My name is Sam and i have accumulated over $70,000 in student loan debt over the last 25 years.

During that time i finally graduated Chico State University. I don't have to pay this debt because i have qualified for Total and Permanent Disability through a student loan company called Nelnet. There is a catch during the last 3 years

from May of 2015 through May of 2018 i had to be... Read more »

Eric Steven Day
Eric Steven Day answered on Jul 14, 2018

Any time you have a debt that is forgiven, you will owe taxes on what is considered forgiveness of debt income. How much you will owe depends on the state where you live as well as what type of income you have on top of the cancellation of debt income.

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1 Answer | Asked in Tax Law for Florida on
Q: Do I need to claim a min $ expense for the child to add child as an additional qual child on child care tax credit form?

Have 2 qualifying children. One has daycare expenss the other I've claimed $0 in expenses. TurboTax, IRS form, IRS website, and IRS calculator says she can be added to the form as a qualifying child but the IRS rep from audit feels otherwise. Can anyone clarify? The question is, Can I add her... Read more »

Eric Steven Day
Eric Steven Day answered on Jul 10, 2018

One of the main requirements for the taxpayer to take the credit is that you have qualifying dependent care expenses. Therefore, you cannot deduct what you didn’t spend money on.

1 Answer | Asked in Tax Law for Missouri on
Q: Required Minimum Distribution (RMD) of IRA?

I took my required minimum distribution (RMD)from my qualified retirement account (simple IRA) early in April the year before the RMD was required. The next year (year it is required to start withdrawing) can I wait until December 31st?

Eric Steven Day
Eric Steven Day answered on Jul 8, 2018

Your required minimum distributions are determined on an annual basis. Therefore, if you took the distribution last year and are trying to include that distribution as part of your required minimum distribution for the following year, it won’t work. There is a different equation that is used... Read more »

1 Answer | Asked in Tax Law for Florida on
Q: I am registering a LLC in Florida. I want to avoid maximum taxes. While registering for my EIN, which should I choose?

Since the LLC will be a single member should I choose to be disregarded as an individual entity or register my LLC as a corp or S-corp? My main goal is to pay the absolute minimum taxes and to have the maximum deductions.

Eric Steven Day
Eric Steven Day answered on Jul 5, 2018

It somewhat depends. If you create an LLC that is a disregarded LLC with you as the single member, then you will have created a sole proprietorship. Whatever the net income is from the LLC you will be required to pay 15.3% in self-employment taxes above whatever your normal income tax rate is.... Read more »

1 Answer | Asked in Tax Law for Oklahoma on
Q: How were medical deductions changed with the most recent tax laws?
Eric Steven Day
Eric Steven Day answered on Jul 3, 2018

Qualified medical expenses that are part of the deduction will remain the same under the new law. For 2018, you will be able to deduct expenses exceeding 7.5% of your AGI. Therefore, if your AGI is $100,000 you will be able to deduct all medical expenses that exceed $7,500. Anything under that... Read more »

1 Answer | Asked in Tax Law for Massachusetts on
Q: Is the $10,000 limit for state and property tax deductions really the same for a single filer as for joint filers?
Eric Steven Day
Eric Steven Day answered on Jul 3, 2018

The deduction is limited to $10,000 regardless of married or single status

2 Answers | Asked in Personal Injury and Car Accidents for Nevada on
Q: If my friend gets in an accident while driving my car, can he sue me for his injuries?
Eric Steven Day
Eric Steven Day answered on Jun 29, 2018

He himself would be the proximate cause of his injuries and could not recover from you individually for his injuries sustained in an accident while driving your car. He could, however, still recover from the insurance company of the driver at fault or from your insurance company if they have... Read more »

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1 Answer | Asked in Tax Law for Nevada on
Q: Paid my acct $1500, owe $900 balance. He refuses to Efile until I pay him in full. Can I mail in without his signature

I owe the IRS $6500 and have the check ready to go. Will they reject my hardcopy without him signing as tax preparer? Is this legal for him to do? I have paid in full for my personal taxes, which he refuses to efile until I finalize pmt for my corporate taxes.

Eric Steven Day
Eric Steven Day answered on Jun 22, 2018

You can sign the return and send it in but you are still legally obligated to pay him for the services he provided.

2 Answers | Asked in Tax Law for South Carolina on
Q: Can I live in a foreclosure house jointly bought by me and my checkbook self-directed IRA during renovation?

I am retiring soon, and plan to roll my government 401K-type plan into a self-directed checkbook IRA, with me as administrator and possibly also custodian.. The principal investment will be flipping foreclosure homes. I plan to buy the houses jointly with my IRA, to maximize the funds I have... Read more »

Eric Steven Day
Eric Steven Day answered on Jun 16, 2018

You cannot live in the house. Anything that you use IRA money to buy cannot be for the benefit of the IRA member. You can manage the LLC that you set up, but you cannot work on the house yourself nor live in it during renovation. That is a prohibited transaction and will cause the IRS to... Read more »

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1 Answer | Asked in Tax Law for Ohio on
Q: We want to use funds from my IRA to pay a $5000 medical bill. What are the tax consequences

I am 70 and my wife is 72 and we file jointly.

Eric Steven Day
Eric Steven Day answered on Jun 14, 2018

If you distribute from your IRA to pay medical bills, the distribution would be considered taxable income and be subject to income taxes at your normal income tax rate. You don't have to pay a 10% penalty for the early withdrawal once you have reached the age of 59 1/2. However, even if you were... Read more »

2 Answers | Asked in Tax Law for California on
Q: If father is co-signer in car lease will his prop be st risk if a fed tax lien is placed on me during off in comp proces
Eric Steven Day
Eric Steven Day answered on Jun 13, 2018

The IRS will place liens on all property owned by the tax debtor. Therefore, if your father does not owe the IRS money and has other property, that other property will not be at risk of having a lien filed on it, nor will they be able to levy or seize that property. The vehicle in which your name... Read more »

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2 Answers | Asked in Tax Law for Ohio on
Q: Can I deduct child support payments on my taxes?
Eric Steven Day
Eric Steven Day answered on Jun 9, 2018

No, if it is specifically mentioned in the decree as child support

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1 Answer | Asked in Tax Law for Pennsylvania on
Q: Woman sells property, paid taxes, wishes to divide proceeds, do children owe tax on that
Eric Steven Day
Eric Steven Day answered on Jun 9, 2018

If she is simply gifting the proceeds to the children they would not have to pay tax on the proceeds. If her name was on the deed and she paid the taxes associated with the sale, she can distribute when she feels. She may however have to file another tax return if the gifted amount is more than... Read more »

1 Answer | Asked in Tax Law and Public Benefits for Indiana on
Q: Need help figuring out 401k distribution options ( separated from work age 55)?

Whether cash out, convert to IRA, Roth IRA or C-company?

Eric Steven Day
Eric Steven Day answered on Jun 9, 2018

It just depends on what type of work you are doing now. For instance, if you are working for another company, you might roll it into their 401k plan. If you are in retirement, the IRA might be a good option because you are just waiting on distributions. If you are running your own business, you... Read more »

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