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California Tax Law Questions & Answers
1 Answer | Asked in Immigration Law and Tax Law for California on
Q: Will I be able to apply for a tourist visa after giving up my green card?

I got my green card through my US citizen spouse. I stayed in the US and held a part-time job for more than a year. What are the implications for future tourist visa applications if I give up my green card? I don't understand the possible tax implications of this as well.

James L. Arrasmith
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answered on Apr 13, 2024

Giving up your green card (also known as abandoning your permanent resident status) can have implications for future tourist visa applications and potential tax obligations. Here's what you should consider:

1. Tourist Visa Applications:

When you apply for a tourist visa after...
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1 Answer | Asked in Tax Law for California on
Q: What rate are non-personal injury settlement payments taxed at in California?

Employer agreed to pay me the rest of a contract amount after they breached their employment contract with me. Sent over a release agreement which I signed and then they sent the money via direct deposit the next day. When I received the check, over half the total, which was under $100k, had been... View More

James L. Arrasmith
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answered on Apr 11, 2024

Non-personal injury settlement payments are generally considered taxable income and are subject to both federal and state income taxes. However, the tax rate applied depends on various factors, such as the nature of the settlement and your total taxable income for the year.

Regarding the...
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1 Answer | Asked in Tax Law for California on
Q: I have a question about safe harbor rules for California residency, the intangible income limit.

I moved to Europe with my family last year. I have an open-ended contract as an employee and my husband doesn't work. California safe harbor rules say that there is a $200,000 intangible income limit to qualify. Is this limit per person (since both me and my husband can claim safe harbor) or... View More

James L. Arrasmith
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answered on Apr 11, 2024

Under California law, the safe harbor rule for determining residency and the $200,000 intangible income limit applies per taxpayer, not per couple. This means that if you and your husband qualify for the safe harbor rule individually, you can each have up to $200,000 in intangible income and still... View More

2 Answers | Asked in Divorce, Tax Law and Family Law for California on
Q: capital gain exemptions married couple file jointly on settling a house is $500,000What about if sold after divorce

and what to do to keep $250,000 each exemptions in California

David S. Greenberg
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David S. Greenberg
answered on Apr 3, 2024

HOW DOES A MARRIED COUPLE QUALIFY FOR THE $500,000 EXCLUSION?

1. At least one spouse must have owned the home for two out of the last five years. The years can be split up – one in 2019 and one in 2021 – but the time has to equal 730 days out of the past five years.

2. And, both...
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1 Answer | Asked in Tax Law for California on
Q: I have a property inheritance and tax question.

Hello Attorney, a few years ago we inherited a cabin and a dock in Lake Arrowhead, California. Because that happened before Proposition 19 went into effect, we were able to keep the original property assessment. However, we were told by the county, well someone who answered the phone, that we... View More

James L. Arrasmith
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answered on Mar 28, 2024

Under California law, property inheritance and tax assessments are subject to specific regulations which can indeed differ based on the type of property and the timing of the inheritance. Before Proposition 19, certain properties, including primary residences inherited from parents or grandparents,... View More

1 Answer | Asked in Entertainment / Sports, Social Security and Tax Law for California on
Q: I went to the casino & won $2,000 then went again & won $2,000 & $4,000 I’m on SSI do I need to report that to SSI ?
James L. Arrasmith
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answered on Mar 19, 2024

If you're receiving Supplemental Security Income (SSI), it's important to understand that this program has strict rules about reporting income and assets. Winnings from gambling, such as the $2,000 and $4,000 you mentioned, count as income in the month they are received and could be... View More

1 Answer | Asked in Military Law and Tax Law for California on
Q: Can the US Treasury take my taxes and garnish my wages for "Lost Equipment " from my military service over 10 years ago?

Military service was 2013 and got out 2018. 2023, get letter of debt. Nobody will answer the phone or return messages. 2 appeals sent, "no record of appeal found". Wage garnishment happens for 2 months then stops only to have my taxes be taken now. Can they do this and not allow me an... View More

James L. Arrasmith
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answered on Mar 16, 2024

Yes, the U.S. Treasury has the authority to garnish wages and intercept tax refunds for debts owed to federal agencies, including debts related to lost or unreturned equipment from military service. This process is part of the Treasury Offset Program, which allows for the collection of federal... View More

1 Answer | Asked in Gov & Administrative Law and Tax Law for California on
Q: Is it possible to sue the state for discrimination regarding property tax?

I pay property tax on my home….the homeless pay no property tax on their home. Discriminatory.

James L. Arrasmith
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answered on Mar 13, 2024

While it is technically possible to sue the state for discrimination regarding property tax, your specific argument about discrimination between homeowners and homeless individuals is unlikely to be successful.

Here's why:

1. Equal Protection Clause: The Equal Protection Clause...
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1 Answer | Asked in Tax Law and Probate for California on
Q: Is there any California law preventing me from paying my deceased fathers back taxes out of pocket?

My father died intestate in California and I am the administrator. My brother is the only other heir. He left behind a lot of unpaid tax bills. He also left my brother and me healthy sums of money via POD accounts. Can I just use those out of pocket funds to pay off his back taxes to keep the... View More

James L. Arrasmith
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answered on Mar 12, 2024

Under California law, there is no legal prohibition against you paying your deceased father's back taxes out of pocket, using the funds you received from the POD (Pay-on-Death) accounts. In fact, it may be a practical solution to settle the estate more efficiently and avoid selling the house,... View More

1 Answer | Asked in Employment Law and Tax Law for California on
Q: Was I overtaxed on my severance?

I was terminated from my employment and signed a severance agreement with my employer. The amount listed in the contract was 3 months severance minus standard payroll deductions & withholdings. However, when I received the lump sum severance amount and reviewed deductions, I was taxed over 40%... View More

James L. Arrasmith
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answered on Mar 7, 2024

In California, severance pay is often treated as supplemental income by the IRS and is subject to federal withholding rates. If your employer did not consider it as supplemental wages, it's important to understand how severance pay is taxed. Severance pay can be taxed at a higher rate... View More

1 Answer | Asked in Tax Law for California on
Q: Hello I paid Optima Tax Relief but they did nothing for me just took my money. I contacted IRS myself.
James L. Arrasmith
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answered on Mar 4, 2024

Under California law, if you've paid for services that were not provided as agreed, you have several options to seek recourse. In the case of a tax relief company like Optima Tax Relief failing to deliver on their promises, your first step should be to reach out directly to the company to... View More

1 Answer | Asked in Tax Law and Landlord - Tenant for California on
Q: What are the tax implications of a tenant in common gifting their 50% interest to the other 50% owner?

50/50 unmarried tenants in common on residential property in Riverside, California. Tenant A wants to gift 50% interest so Tenant B is the sole owner on the title. What's the best way to go about this (quit claim deed?) and tax implications?

James L. Arrasmith
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answered on Mar 1, 2024

When a tenant in common wishes to gift their 50% interest in a residential property to the other tenant, ensuring the transfer is executed correctly is crucial. In California, one common method to transfer such an interest is through a quit claim deed. This document will effectively transfer the... View More

1 Answer | Asked in Tax Law for California on
Q: Can I still register for a case action suit againest optima tax relief?
James L. Arrasmith
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answered on Feb 25, 2024

Under California law, your ability to register for a class action lawsuit against Optima Tax Relief depends on the specific circumstances of the case and the deadline to join as a class member. Class action lawsuits have defined periods during which affected parties can sign up or... View More

1 Answer | Asked in Health Care Law and Tax Law for California on
Q: Ive 30 days to pay a health INS premium, if not paid, my plan will be canceled. Will it cause lapse in health coverage?

If I do not pay my monthly health insurance bill from covered CA, the bill says my plan will be canceled. If I do not use the health plan for the 30 days will this cause a lapse in insurance when I do my taxes next year? Also, will I have to pay the 30 day monthly premium to the health insurance... View More

James L. Arrasmith
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answered on Feb 22, 2024

Yes, not paying your health insurance premium and having your Covered California plan cancelled after 30 days would likely cause a lapse in coverage when you go to file taxes and could have other negative impacts. Specifically:

- If your plan is cancelled for non-payment of premiums, this...
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1 Answer | Asked in Consumer Law, Tax Law and Health Care Law for California on
Q: To avoid a tax penalty, how many months in 2024 does one over 18 have to be covered with health insurance in CA?

I read that one can have a three month lapse in health coverage to avoid a tax penalty, though it did not show a year.

James L. Arrasmith
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answered on Feb 20, 2024

Based on current California law, the health insurance mandate requires individuals over the age of 18 to be enrolled in minimum essential coverage for the full duration of 2024, with strictly limited exceptions, in order to avoid a tax penalty. There is no longer a "3 month lapse"... View More

1 Answer | Asked in Tax Law for California on
Q: Got a bill for 2020 CA state income I didn't have, based on erroneous 1098

Got bill for 2020 CA state income, with interest & penalties, at the house I used to own with my ex. Divorce finalized in 2010; she got the house, has been making the payments herself since Jan 2009. The loan was modified to remove my name and has since been refinanced.

Apparently my... View More

James L. Arrasmith
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answered on Feb 21, 2024

Good questions. Here are a few points in response:

1) No, technically California cannot tax you or assess state income tax liability solely based on a erroneous 1098 form, without actual proof of California source income. So there are grounds to fight this.

2) Options to resolve:...
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1 Answer | Asked in Tax Law, Child Support and Family Law for California on
Q: My tax return was seized for arrears I had no idea about. Is it possible to get all or some of it back?

I was never informed of this case. My wages were not garnished no bill in the mail. I had no way of knowing that I should be paying. For a whole year I was racking up this debt and no body told me about it. Now looking at the order that was filed it has wrong information on it. It says I have no... View More

James L. Arrasmith
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answered on Feb 21, 2024

If your tax return was seized for arrears related to child support or other debts, there may be avenues to contest the seizure and potentially recover some or all of the seized funds. It's concerning that you were not informed about the case or given an opportunity to address the arrears prior... View More

1 Answer | Asked in Tax Law and Elder Law for California on
Q: How do I fire a attorney who has not kept me in the loop and has funds of my inheritance
James L. Arrasmith
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answered on Feb 21, 2024

If your attorney has not kept you informed about your case and has not provided updates regarding the status of your inheritance funds, you have the right to terminate the attorney-client relationship. Begin by sending a formal written notice to your attorney expressing your dissatisfaction with... View More

1 Answer | Asked in Consumer Law, Real Estate Law and Tax Law for California on
Q: I have to petition the superior court of Monterey, and need an attorney for real estate and tax law any Suggestions

My properties sold under tax default now the same agency that sold them has stated they made a mistake and I over paid said taxes I want to reclaim my properties and file suit on the agency

James L. Arrasmith
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answered on Feb 21, 2024

In your situation, seeking legal representation experienced in real estate and tax law is crucial, especially given the complexities of property sales under tax default and subsequent claims against a governmental agency. Attorneys with a focus in these areas will be able to navigate the legal... View More

1 Answer | Asked in Tax Law and Immigration Law for California on
Q: Can F-1 students become “residents for tax purposes” under certain conditions?

"Most F-1 students and scholars who are in the US are nonresident aliens for tax purposes.

You will be considered a resident for tax purposes if you pass the substantial presence test."

This would mean every single student studying for longer than 2 quarters is a resident... View More

James L. Arrasmith
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answered on Feb 21, 2024

You are correct that F-1 student visa holders are generally exempt from the substantial presence test for their first 5 calendar years in the United States. This means they would retain nonresident alien status for tax purposes during that initial period.

Specifically, IRS code...
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