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Virginia Tax Law Questions & Answers
1 Answer | Asked in Divorce, Real Estate Law, Tax Law and Family Law for Virginia on
Q: Can I transfer my half of house deed to ex-husband in Virginia divorce with tax lien and disputes?

I am in the process of a divorce and want to know if I can transfer my half of the house deed ownership to my ex-husband. There is no existing divorce agreement or court order regarding property division, but there is a tax lien on the property, and disputes regarding property division exist. The... View More

James L. Arrasmith
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answered on Apr 12, 2025

It sounds like you're in a complicated situation with your property and divorce. Since there is no court order yet regarding the division of the property, transferring your half of the deed could be tricky, especially with the tax lien and ongoing disputes. You would likely need to work out an... View More

1 Answer | Asked in Admiralty / Maritime, Business Law and Tax Law for Virginia on
Q: Do I need to pay DC taxes for VA-based boat rental using Potomac River?

I operate a boat rental business registered as an LLC in Virginia. We launch from Gravelly Point, Arlington, VA, utilizing the Potomac River under DC jurisdiction, and sometimes use the Occoquan River. The business is personally operated by me, without employees, primarily during weekends. Although... View More

James L. Arrasmith
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answered on Apr 12, 2025

Operating your Virginia-based boat rental business on the Potomac River, which is under the jurisdiction of the District of Columbia (DC), introduces certain tax obligations. Even though your business is registered in Virginia and primarily operates from Virginia locations, utilizing DC waters for... View More

1 Answer | Asked in Tax Law, Consumer Law and Immigration Law for Virginia on
Q: How can we have our IRS passport hold lifted due to unpaid taxes, impacting health care needs?

My wife and I have unpaid back taxes exceeding $165,000, but there's a hold on our passports from the IRS. We haven't applied for hardship status yet. We hired a company to help with an offer in compromise, but it seems to be a scam—they delayed submitting it last month. This passport... View More

James L. Arrasmith
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answered on Apr 5, 2025

To get the IRS passport hold lifted, you’ll need to resolve the “seriously delinquent tax debt” status. That means either paying the balance down below the threshold (around $62,000 for 2025) or entering into an official agreement like an installment plan or accepted Offer in Compromise.... View More

1 Answer | Asked in Divorce, Tax Law, Real Estate Law and Family Law for Virginia on
Q: Who can claim the Virginia rental house in 2024 taxes after divorce?

I finalized my divorce in September 2024 and was awarded a rental house in Virginia through the court order. I started paying the mortgage in August 2024, but my ex-spouse continued making payments from his bank account, and I reimbursed him since my loan assumption attempt was denied. He is now... View More

James L. Arrasmith
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answered on Apr 12, 2025

Since you were awarded the rental house in your divorce and have been making mortgage payments since August 2024, you are likely the one entitled to claim the property on your taxes for the year. Even though your ex-spouse continued making payments temporarily and you reimbursed him, the IRS... View More

1 Answer | Asked in Social Security, Immigration Law, Tax Law and Public Benefits for Virginia on
Q: Undocumented person's tax return rejected due to wrong date of birth with Social Security.

I recently discovered that the Social Security Administration has the wrong date of birth for me, which caused my tax return to be rejected. I found out about this issue a month ago when I applied for my tax return and confirmed it with the Social Security office. Since I am undocumented, I have no... View More

James L. Arrasmith
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answered on Apr 1, 2025

Your situation presents a challenging intersection of tax compliance and immigration status. When the Social Security Administration (SSA) has incorrect biographical information for an undocumented individual, it creates complications for tax filing that require careful navigation. The request for... View More

1 Answer | Asked in Divorce, Tax Law, Domestic Violence and Family Law for Virginia on
Q: What to do if separated spouse refuses to pay tax plan

My husband and I previously filed taxes jointly and entered a payment plan with the IRS. We are now separated due to abuse, and I'm filing taxes separately. He has failed to pay his portion of our agreed tax payment plan. I've been unable to contact the IRS for guidance and have an audio... View More

James L. Arrasmith
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answered on Apr 12, 2025

It’s understandable that you’re facing a difficult situation, especially given the financial and emotional stress of your separation. Since the IRS payment plan is in both of your names, you're still responsible for the full amount owed, even if your spouse is not contributing. The first... View More

3 Answers | Asked in Immigration Law and Tax Law for Virginia on
Q: Do they check previous tax forms for citizenship?

I have been a green card holder for five years, obtained through marriage, and we have been married for six years. We have reliably filed joint tax returns each year. When applying for citizenship, will previous years’ tax forms be reviewed, or do they just check that joint returns were filed?

Monica E Rottermann
Monica E Rottermann
answered on Mar 28, 2025

The citizenship application asks if you owe any overdue taxes, and you may be asked about tax filing history, as part of the good moral character determination. Depending on the officer you may also be asked to provide copies of your taxes/tax transcripts for the past 5 years and the officer may... View More

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1 Answer | Asked in Tax Law, Business Formation and Business Law for Virginia on
Q: Can I deduct home renovation costs for a YouTube channel under my LLC?

I have an LLC with two businesses under it, including a YouTube channel focused on home remodeling and construction. My wife has a decorating background, and I am a general contractor. The channel is not monetized yet, and I recently purchased a house that needs extensive work, which will be... View More

James L. Arrasmith
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answered on Apr 12, 2025

Since the home you’re renovating is your primary residence, the IRS typically does not allow deductions for personal home renovation expenses, even if you're documenting them for business content. Because the property is not used exclusively for business purposes, expenses like materials and... View More

1 Answer | Asked in Tax Law and Real Estate Law for Virginia on
Q: Tax implications of jointly owning a house with parents in Virginia.

My parents and I bought a house together, and all three of our names are on the deed. I am the only one who took out the mortgage, while they paid for the down payment. There are no formal agreements about ownership or expense sharing. I'm concerned about the tax implications of this... View More

James L. Arrasmith
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answered on Apr 12, 2025

Owning a home jointly with your parents in Virginia does create a few potential tax considerations, but many of them depend on how you all manage the property financially and how the ownership is reflected on tax documents. Since your name is on the mortgage and you’re responsible for the loan... View More

2 Answers | Asked in Business Formation, Immigration Law and Tax Law for Virginia on
Q: Can my LLC hire an H1B employee? Steps needed?

I am a small one-person LLC online startup retail business owner. I started the business in July 2024, and my sales have been growing since then. I plan to file taxes for the first time for FY 2024, and I have never previously filed any H1B petition. I'm interested in hiring an H1B-sponsored... View More

Dominic Paul Lascara
Dominic Paul Lascara
answered on Mar 3, 2025

This is not an area that I am familiar with, but I wanted you to have some general information about this.

An H-1B employee is a foreign professional who works in the United States on a temporary visa in a specialty occupation. The H-1B is a nonimmigrant visa category.

Eligibility:...
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1 Answer | Asked in Business Formation and Tax Law for Virginia on
Q: Where should I create my LLC for my KDP and POD business?

I'm looking to start a digital product business with Kindle Direct Publishing (KDP) and Print on Demand (POD). I plan to form an LLC and am considering the legal and tax benefits. I temporarily reside in Virginia, have a CDL license in Ohio where I plan to return soon, but am also considering... View More

Dominic Paul Lascara
Dominic Paul Lascara
answered on Feb 24, 2025

You have several options which take a lot of explanation and more questions about your business and its reach. You could initially file under Virginia law and when you move to Ohio transfer the LLC to Ohio. If there are tax advantages and/or state filing advantages to form your LLC in Wyoming or... View More

2 Answers | Asked in Real Estate Law and Tax Law for Virginia on
Q: How would split payment methods for a home purchase between two individuals be viewed by the IRS?

I am looking to purchase a home with a family member, however we are looking to split the total purchase cost where they are paying their half up front and I am getting a mortgage. We both will be on the title, but I would be the sole holder of the mortgage. From the IRS' perspective, is their... View More

Phillip Todd Zagotti
Phillip Todd Zagotti
answered on Feb 12, 2025

Based on the details provided, this situation would not be considered a gift. The other family member is paying for their half of the property upfront, and you are using debt to pay for your half. There is no transfer of assets between you and the other family member. Your ongoing mortgage payments... View More

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3 Answers | Asked in Landlord - Tenant, Real Estate Law, Tax Law and Estate Planning for Virginia on
Q: If I want to buy a property in Virginia to rent out, do I need a Virginia LLC or am I ok with a Wyoming or Delaware LLC?
Richard Sternberg
Richard Sternberg
answered on Feb 10, 2025

If you open a foreign LLC to do business in Virginia by owning and renting property in the state, you will need to register the foreign corporation or LLC in Virginia. You will not be exempt from Virginia sales or other taxes on the Virginia income. So, you will pay corporate franchise tax in both... View More

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1 Answer | Asked in Tax Law, Collections and Communications Law for Virginia on
Q: How can I dispute personal property taxes for a car that wasn’t registered at all during that time?

A lien was placed on my bank account for personal pretty taxes, to which the communication was sent to an address I am not associated with at all so I had no knowledge of the lien being placed against me.

The car also hasn’t been registered in VA since 2022 and was unregistered for two... View More

James L. Arrasmith
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answered on Oct 7, 2024

To dispute the personal property taxes, you need to gather all relevant documentation that shows the vehicle was not registered during the period in question. This could include proof of non-registration, your current residence outside Virginia, and any relevant records showing the car was not in... View More

1 Answer | Asked in Tax Law for Virginia on
Q: Question about capital gains tax on home sale?

Hi, I'm in a confusing situation that I hope you can help me with. I just sold my house last month and I'm trying to figure out if I qualify for the $250k capital gains exemption for a single tax payer. Now I should qualify since I lived in this house for a decade. The situation here is... View More

James L. Arrasmith
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answered on Oct 3, 2024

The capital gains exemption you're referring to—$250,000 for a single taxpayer—generally applies if you have owned and lived in the home for at least two of the last five years before selling it. Since you've lived in the house for a decade, you likely meet the residency requirement.... View More

1 Answer | Asked in Real Estate Law and Tax Law for Virginia on
Q: Sale of completely depreciated rental property

Tax consequences on sale of completely depreciated rental property

James L. Arrasmith
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answered on Sep 14, 2024

When you sell a completely depreciated rental property, there are several tax consequences to consider. Since the property has been fully depreciated, you must recapture all the depreciation taken during the ownership period as "depreciation recapture." This recaptured amount is taxed at... View More

1 Answer | Asked in Foreclosure, Real Estate Law and Tax Law for Virginia on
Q: real estate question: What does a Seller do in process when they sell a house 3 days prior a Wrongful foreclosure date

Real estate question: basic now but will elaborate when connected. Note: will type words in a form of 3rd person so its less emotional for me, stay on logic.

Also, a lawyer that was the office for Legalaide stated that it does not matter the Foreclosure the property was sold, there is no... View More

James L. Arrasmith
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answered on Sep 13, 2024

When you sell a home just a few days before a scheduled foreclosure, the sale can have important consequences on the foreclosure process. First, make sure that the sale of the property is fully finalized and that all necessary documents have been recorded. Once the house is sold, the foreclosure... View More

1 Answer | Asked in Business Law and Tax Law for Virginia on
Q: Is an installment plan being delinquent on a federal debt?

I am completing form 306 for federal employment. It asks if I am delinquent on any federal debt. I am on an installment plan for last year’s tax. Do I say yes or no?

James L. Arrasmith
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answered on Aug 13, 2024

When completing Form 306 for federal employment, it's important to understand what the term "delinquent" means in this context. Being on an installment plan with the IRS does not automatically mean you are delinquent. As long as you are current on your payments and adhering to the... View More

1 Answer | Asked in Tax Law and Employment Law for Virginia on
Q: How can I pursue legal actions against an employer that is not withholding taxes correctly?

I am a single mother of 5, my coworker is a young single adult male with no dependents, another is married with a wife who works and a toddler, another is a single adult male no dependents, and lastly a senior veteran is married and no dependents but the exact same amount of taxes were withheld... View More

James L. Arrasmith
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answered on Jul 18, 2024

It's important to address the issue of incorrect tax withholding immediately. You can start by discussing the matter with your employer, explaining the discrepancies and providing the tax forms you completed when you were hired. Ensure they understand the legal requirement to withhold taxes... View More

1 Answer | Asked in Tax Law for Virginia on
Q: Can 1099 payments made to my SSN be deposited in my Single Member LLC's bank account ?

I just opened a single member LLC and got a contract as 1099 independent consultant. In my W9 form, I shared both SSN and EIN to the company.

I want to know if teh company decides to use my SSN to make 1099 payments to me and issues me a 1099 form with my SSN at the end of teh year, can I... View More

James L. Arrasmith
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answered on Jul 18, 2024

Yes, you can have 1099 payments made to your SSN deposited into your Single Member LLC's bank account. The IRS allows this because, for tax purposes, a Single Member LLC is treated as a disregarded entity, meaning the LLC and the individual owner are considered the same entity. This means that... View More

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