California Tax Law Questions & Answers

Q: Hi my name is Melissa I really need help trying to find out what tax law allows a taxpayer to have a escrow company put

1 Answer | Asked in Real Estate Law and Tax Law for California on
Answered on Jan 31, 2019
Frank Huerta Jr's answer
You should really determine if you owe the money. You want to find out what tax years the lien covers. Call the IRS or State to ask for a record of your account. If you have already paid it off then fill out a lien discharge request. If you are disputing the underlying debt you can either file an audit reconsideration or in some cases file an offer in compromise doubt as to liability. If you do owe the money, then contact the IRS lien unit about paying off the balance and ask for the lien...

Q: Can an employer who pays his employees cash money under the table ask his helpers to help him pay tax on his contract

1 Answer | Asked in Tax Law for California on
Answered on Jan 14, 2019
Ali Shahrestani, Esq.'s answer
You may want to report him to the IRS and FTB for tax fraud. If he owes you money, you may want to sue him for that in court. More details are necessary to provide a professional analysis of your issue. The best first step is an Initial Consultation with an Attorney such as myself. You can read more about me, my credentials, awards, honors, testimonials, and media appearances/ publications on my law practice website, www.AliEsq.com. I practice law in CA, NY, MA, WA, and DC in the following...

Q: i am a heir to my aunts trust,i inherited $90K. the lawyer is requesting my ss# number. must i give it 2 him?

1 Answer | Asked in Estate Planning and Tax Law for California on
Answered on Jan 11, 2019
Ben F Meek III's answer
Ask him the purpose for his needing to know. Most likely it is so the Trust can report the distribution of funds to you on IRS Form 1099. That would be a legit reason for needing to know.

Q: Do we need to file a CA tax return in 2018?

1 Answer | Asked in Tax Law for California on
Answered on Jan 8, 2019
Victor J. Yoo's answer
CA Franchise Tax Board requires all individuals who are domiciled in California to file a state tax return. There may be several factors to consider whether or not you need to file your tax return in California including but not limited to: was there a source of income earned in California, how long you lived in California, your driver's license status, your voting status, do you own a home in California, are you attending schools in California, are covered under medical insurance for "Covered...

Q: If the TP denies tax liability, does the IRS always send a final notice-right to hearing notice after the CP-504?

2 Answers | Asked in Tax Law for California on
Answered on Jan 7, 2019
David S. Greenberg's answer
In the usual course, the IRS automated collection system [ACS] will issue either a CP90 or LT11 Final notice of intent to levy with a notice of your right to a collection due process hearing within about 5 weeks after issuance of the CP504.

However, I have encountered several situations whereby the final notice does not issue within the predictable time frame. This usually occurs when the account is being transferred from ACS to a local revenue officer.

It would be in your...

Q: Will the government shutdown extend or toll the statute of limitations for the IRS for an due process hearing?

1 Answer | Asked in Tax Law for California on
Answered on Jan 6, 2019
David S. Greenberg's answer
The 30 day period during which a timely request for a Collection Due Process Hearing is not impacted by the shutdown.

The shutdown can and in all likelihood will delay the scheduling of the hearing.

Q: We live in California. Would we have to pay fed/state gifting taxes if gifting a second home to our daughter in 2019?

1 Answer | Asked in Estate Planning and Tax Law for California on
Answered on Jan 2, 2019
Frank Huerta Jr's answer
No you do not have to file an additional tax form for California. However if you are gifting the home to your daughter, you should also fill out the Primary Change of Ownership Form (PCOR) with you county.

Q: Is it legal to ask a beneficiary to claim money from distributions he never received, for taxes, through Schedule K-1s?

1 Answer | Asked in Tax Law and Estate Planning for California on
Answered on Dec 13, 2018
Bruce Adrian Last's answer
Quail Valley:

From what you describe, something does not sound right. In some instances a trust or estate will "pass though" tax liability to the beneficiary but only where that liability is connected to a distribution. For example, if a trust makes a distribution to a beneficiary that consists of income and capital gains earned by the trust, it may pass the tax liability to the beneficiary. This is done because the beneficiary, as a general rule, has a lower tax rate than the trust....

Q: What happens if I get a tax audit? Do I have to go to court?

2 Answers | Asked in Tax Law for California on
Answered on Dec 4, 2018
Linda Simmons Campbell's answer
Not if you are in agreement with the results of your audit. I recommend hiring a good tax attorney unless you are sure you can provide everything the IRS is requesting with ease.

Q: Hi my company in Japan is thinking about establishing a rep office in CA. Wondering if we need to pay tax in this case?

1 Answer | Asked in Business Formation, Business Law and Tax Law for California on
Answered on Nov 9, 2018
Paul Martin Vargas' answer
Hi. The company would have to register with California as a foreign entity (foreign means entities outside of California, not just the U.S.). As a result, $800 minimum Franchise Tax to California per year would be due. Also, any activity conducted in California will result in income tax liability for both California and the IRS. There may be offsets due to foreign tax paid and exclusions, but now I'm getting outside the scope of this question. I hope this helps.

Q: Can I civil litigate for damages the FTB caused for a faulty levy that took place AFTER residency was proven?

1 Answer | Asked in Tax Law for California on
Answered on Nov 9, 2018
Paul Martin Vargas' answer
Hi. Yes, you would have a cause of action in civil court against the FTB for unauthorized collection action. There are some details that are not in your question that would need to be assessed to determine the strength of your case. The fact they are willing to refund you the amount retained shows culpability on their part. It may be best to accept the refund (if procedurally possible) and move on; but, again, you may have more damages as a result of their unauthorized collection that a civil...

Q: If you receive settlement money from a Worker's Comp. case, will it be taxed?

1 Answer | Asked in Tax Law and Workers' Compensation for California on
Answered on Oct 24, 2018
Nancy J. Wallace's answer
unless the Award specifies it is repayment of wages earned but never paid (extremely unlikely, the WCAB Judge has no jurisdiction over wage claims), then the Workers Comp award is a non-taxable event. It is payment for surrending rights to further treatment and permanent disability award, it is not wages earned for working.

Q: Capital Gains tax on living in new home 9 months or less.

1 Answer | Asked in Tax Law for California on
Answered on Oct 17, 2018
Eric Steven Day's answer
You will still be able to take the exemption from gain on the sale of a personal residence under certain circumstances. It's called the 50 mile rule. If the location of the new job is 50 miles or further away you will be able to take the exclusion of the 2-year rule and the entire transaction would be tax free

Q: For my case, theyre offering me 5000 for a settlement. Will that be taxed? Or is it nontaxable like temp dis. benefits?

2 Answers | Asked in Tax Law and Workers' Compensation for California on
Answered on Oct 3, 2018
Nancy J. Wallace's answer
NOT TAXABLE. It's not wages for earnings. it's a partial payment on a physical and monetary loss.

Q: My brother and I have inherited two properties. What's the best option for selling one and paying the least in taxes?

1 Answer | Asked in Real Estate Law, Tax Law and Probate for California on
Answered on Aug 20, 2018
Bruce Adrian Last's answer
Dear Katy, TX:

Well, you have basically two options: 1) Sell the properties as part of the probate process, or 2) Distribute the properties to yourself and your brother and sell them later. Neither really has any effect on the taxes you will pay as far as capital gains.

When a person dies, their property receives a "step-up" in basis. Capital gains tax is calculated as the sales price less the property's basis. So, the basis for you and your brother is the same whether the...

Q: If my ex wife’s tax return was withheld by IRS for the overpaid returned that was filed jointly when I was still marrie

1 Answer | Asked in Tax Law for California on
Answered on Aug 16, 2018
Linda Simmons Campbell's answer
If your ex-wife was not responsible for the debt then she can file Form 8379, Injured Spouse Allocation. The IRS will allocate the amount that she should have received if she had filed separately. This will hopefully keep things on a more friendly note between the two of you.

If you filed jointly then you are both responsible for the debt unless she is granted innocent spouse relief (not always easy to get).

Q: Is husband liable for Wife's tax debt when filing separately in a community law state?

2 Answers | Asked in Tax Law for California on
Answered on Aug 15, 2018
David S. Greenberg's answer
In a community property state, your wife has a community interest in your income. The IRS therefore has standing to engage in enforced collection by way of levy of your wife's community interest in your income.

A separate property agreement would protect you from such enforced collection of your wife's interest in your income.

Q: COUNTY OF LOS ANGELES VS MYSELF served copies of the SUMMONS AND COMPLAINT PARENTAL OBLIGATION.

1 Answer | Asked in Family Law, Tax Law and Appeals / Appellate Law for California on
Answered on Aug 13, 2018
Tobie Brina Waxman's answer
Before speaking with an attorney, call the child support agency. Speak with the representative or lawyer who is assigned to this particular case and discuss your options with him/her. Be sure to also discuss your lack of notice of the pending action and of the fact that you have been paying Mom $500. You'll need to back that up with some kind of written proof. Do this right away because the interest will continue to accrue, so don't waste time. It costs you nothing to start by contacting...

Q: House in a Trust- 2 beneficiaries. 1 wants to buy 2's interest. Does Prop 13 parent to child transfer tax rate apply?

1 Answer | Asked in Real Estate Law and Tax Law for California on
Answered on Aug 2, 2018
Bahram Madaen's answer
It depends on the term of the trust and the current trustee's power. if the trustee could amend the trust, he/or she might be able to do so without violating Prop 13. I recommend contacting an attorney to review the trust.

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