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California Tax Law Questions & Answers
2 Answers | Asked in Tax Law for California on
Q: I'm an independent contractor with no "earned" income in 2021 but had unemployment, can I still take Sch. C expenses?

Normally, I am self-employed (independent contractor) freelance exec. assistant and run my business from my apartment and use Schedule C to deduct expenses for that business. However, from Jan. to Sept 2021 I collected Pandemic Unemployment Assistance and did not have any earned income and my PUA... View More

Rod B. Tuazon
Rod B. Tuazon
answered on May 4, 2022

Just to clarify, it you looked for work unrelated to your business, the expenses may not qualify. However, if the expenses are related to maintaining your current business, they may qualify as expenses even if you didn't have earned income for that year.

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1 Answer | Asked in Tax Law for California on
Q: I had a tax issue and the issue has gone to IRS court . Can i do a settlement with the IRS instead of going to court.

I had a tax issue and the issue has gone to IRS court. Can I do a settlement with the IRS instead of going to court? The Tax Agent who has handled my case bailed out at the last moment. Is it advisable to go with an attorney who may charge up to 25k start and may go up? Where should I get good... View More

David S. Greenberg
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David S. Greenberg
answered on Apr 3, 2022

Yes, you most certainly settle your case. In fact, a very high percentage of Tax Court cases are settled.

1 Answer | Asked in Real Estate Law and Tax Law for California on
Q: We plan to sell our house in 2023, w/a capital tax gain of $1MM. Should I NOT work in 2022 to fall in the 0% tax rate?

I can afford to not work. But a past employer wants me to work for them. Ideally, i want my taxable income to be as low as possible when i sell our house, correct?

Jarrett Nila Buchanan
Jarrett Nila Buchanan
answered on Mar 29, 2022

If this home qualifies as your primary residence, you will qualify for a capital gain exclusion of $250k, if single, or $500k, if married. If this is an investment property, you may defer taxable gain by doing a 1031 exchange. There are also ways to change the characteristics of properties in... View More

3 Answers | Asked in Employment Law and Tax Law for California on
Q: Is there something I can do if my employer misclassified me as an independent contractor?

I have a question regarding taxes…my employer last year classified me as an independent contractor, however i was looking into CA state law and based on what I was reading, I should have been classified as an employee. The employer gave me a 1099 and now I owe around $3000 in taxes. Is there... View More

Maya L. Serkova
Maya L. Serkova
answered on Mar 11, 2022

In the employment law context, if you are actually an employee and not an IC, you have the protections of the California Labor Codes that you can adjudicate against your employer. Specifically, as an employee, you are entitled to overtime pay ( if you work more than 8 hours per day/ more than 40... View More

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3 Answers | Asked in Employment Law, Tax Law and Civil Rights for California on
Q: My boss threatened my job hours and flexibility. Is this legal?

After I confronted my boss about him illegally giving me a 1099 since I’m not a independent contractor nor self employed i demanded a w2 . He messaged me insisting I was and he said if I ask for a W-2 he said say good bye to my freedoms and basically my flexibility I’ve been given as... View More

Maya L. Serkova
Maya L. Serkova
answered on Mar 9, 2022

It is unlawful to retaliate against an employee who refuses to participate in illegal activity. It sounds like your employer is retaliating against you for refusing to go along with 1099 which you believe is improper in your case.

I suggest you consult with an employment law attorney who...
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2 Answers | Asked in Employment Law and Tax Law for California on
Q: Hi I work for an auto detail company as an assistant to the owner. I come in weekly and normally stay in office

He gives me 1099 as self employed even though I’m not and I’m paid every two weeks and stay in office.

Maya L. Serkova
Maya L. Serkova
answered on Mar 8, 2022

First, it needs to be determined whether you are actually an independent contractor (IC) and not an employee. Just because the employer characterizes you as an IC, does not make it so. In California, it is not easy to qualify to be an IC if the employer exercises control over you and you are... View More

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1 Answer | Asked in Employment Law and Tax Law for California on
Q: My employer sent out our w-2 for 2021, however for the employer section, it's a different company from the pay stubs.

The employer name on the w-2 is the company's HR outsourcing company, not the company I'm working for. Is this legal to do? This would affect my personal obligations such as for example buying a house or applying for a visa.

Maurice Mandel II
Maurice Mandel II
answered on Feb 24, 2022

The name of your employer from your pay stubs should match what is on your W-2 because the law requires the true name of the employer to be on the pay stubs. Abbreviations can be ok if they are not concealing the name of the employer.

1 Answer | Asked in Real Estate Law and Tax Law for California on
Q: Mom died 7 years ago, her house never transferred ownership-i want to sell it what capital gains tax do i have to pay?

Mother died about 7 years ago- no one changed the ownership of the deed or house to my siblings. Now my siblings want nothing to do with it and I am stuck with the house. The house in 2006 had a loan pulled out of it for 201,500. But i have had to make payments on the mortgage to make sure its... View More

Yelena Gurevich
Yelena Gurevich
answered on Feb 24, 2022

you will need to contact and consult with a probate attorney as to your options.

1 Answer | Asked in Tax Law, Estate Planning and Real Estate Law for California on
Q: I own and live in a home w/ my sister. She wants to convert to a duplex and rent half. What are the tax implications?

The home has been equally owned by the sisters for 50 years. They both have family who would ultimately inherit the property. Would the tax basis change? Would the property taxes change?

Howard E. Kane
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Howard E. Kane
answered on Feb 21, 2022

Converting a single-family residence to a duplex will not necessarily increase the value of the home. However, if the value is increased, the property taxes will be reassessed to reflect the increased value of the home. Per the California Board of Equalization website, new construction or... View More

1 Answer | Asked in Estate Planning, Tax Law and Probate for California on
Q: Can a property in a trust that became irrevocable upon my grandma's death be reassessed for property taxes in San Diego

My grandma moved the property into a living trust in the mid 90's. She passed away in 2019 and the trust became irrevocable. The trust gives a life estate to my uncle. His daughter (my cousin) and I are executors of the trust. As the grandchildren we get the remainder of the property to do... View More

Julie King
Julie King
answered on Feb 15, 2022

Depending on the language in the trust, you should qualify for the Grandparent\Grandchild exemption. You can take a copy of the trust to the County Assessor's office and explain the situation to them. If that doesn't work, contact a lawyer in your area for assistance. Best wishes!

1 Answer | Asked in Gov & Administrative Law and Tax Law for California on
Q: I do consulting & engineering as a contractor. Can I open an S-corp. in a different state than the one I operate it?

I'll be working from a home office, based in California. Would like to incorporate in Florida.

The nature of the job is either consulting to tech. companies or offering engineering services or selling them designs which I make on my own.

Joel F. Murray
Joel F. Murray
answered on Feb 13, 2022

Generally, if a foreign corporation (e.g. a different state) is operating/doing business in a different state than the state in which they are incorporated, they register with the state agency that regulates corporations (in California, the Secretary of State) as a foreign business entity (e.g. a... View More

1 Answer | Asked in Business Law and Tax Law for California on
Q: Is the owner of a start-up business in California allowed or required to be paid wages as though they are an employee?
Julie King
Julie King
answered on Feb 3, 2022

Yes, you are allowed to pay yourself a salary. Work with your accountant to be sure you are getting the best tax advantages.

1 Answer | Asked in Estate Planning, Real Estate Law and Tax Law for California on
Q: Is there a way to claim a house from a trust and then transfer the deed of a house without it showing up on taxes?

A family member of mine was bequeathed a house from a living trust. He has not claimed it because he doesn’t work so he can get medi-cal to cover the medical care that he needs. Would he be able to claim it and transfer it to someone else without it affecting his qualifications for medical or his... View More

Julie King
Julie King
answered on Jan 19, 2022

No. Deeds are public records that anyone can see and receive a copy of simply by asking the County Recorder and paying the copying fee. Many counties have their deeds online for easy access. Also, be aware that there is a “look back period” before someone can qualify for some needs-based... View More

1 Answer | Asked in Tax Law for California on
Q: In 2011 I incurred a state California tax debt. In six years ago I got married. If I move to Washington state.

Will California still go after my wife’s income or just mine to pay back the debt

David S. Greenberg
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David S. Greenberg
answered on Jan 7, 2022

Because Washington is a community property state, you have a community interest in your wife's earnings. The California FTB can therefore collect on your community interest in those earnings.

2 Answers | Asked in Divorce, Family Law, Personal Injury and Tax Law for California on
Q: Im paying all the bills and husband hiding his money in an investment in x name. What can I do. I found bank letter

The letter was sent to my home re: Request to change address to x address. We have been married for a year.

Dale S. Gribow
Dale S. Gribow
answered on Jan 7, 2022

YOU PROBABLY WANT TO ASK THIS QUESTION TO A FAMILY LAW ATTORNEY IN YOUR AREA.

CALL FOR A FREE CONSULTATION ASAP.

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2 Answers | Asked in Employment Law and Tax Law for California on
Q: final paycheck stopped by bank to ask for verification. Now my bank put 2 week hold on the payroll check. what do i do
Brad S Kane
Brad S Kane
answered on Dec 23, 2021

You can ask for your employer to issue a stop payment and provide you with a cashier's check.

The fact the bank put a hold on the final check is a bad sign.

Depending on whether the check is ultimately rejected, you may be entitled to waiting time penalties for each day late up...
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1 Answer | Asked in Estate Planning and Tax Law for California on
Q: Irrevocable trust has three sibling equal beneficiaries - one sibling is trustee. Are IRS rules for grantor trust met?

The original settler is deceased. The trustee has power to distribute his 1/3 of income and principal to himself. The question is whether the Trustee-beneficiary is considered a substantial owner under IRC 678(a)(1) and therefore taxed currently on his 1/3 of trust income.

Julie King
Julie King
answered on Dec 23, 2021

It is most likely a non-grantor trust, but there is no way to know unless a lawyer reads the terms of your particular trust. Each trust contains different language. The main question will be whether the settlor/grantor of the trust has any control or powers. Take your trust to an attorney in your... View More

1 Answer | Asked in Criminal Law, Divorce, Family Law and Tax Law for California on
Q: My Ex exercised half the shares of community assets before splitting our stocks and did not communicate causing loss

My Ex is supposed to give 50 % of his pre-ipo stocks over to me and keep me informed what he is doing with them. But he kept me in dark exercised 50% of them and never gave me an option to exercise as it was community property in his name and now claims all exercised shares are his. Now if i agree... View More

Dale S. Gribow
Dale S. Gribow
answered on Dec 10, 2021

more info needed.

it sounds like a family law matter and I do not accept divorce matters.

present this to your divorce attorney and if you don't have one request a courtesy consultation with one

1 Answer | Asked in Tax Law for California on
Q: I am a partner with a company. They report annual distribution through K1 in my name. Can that become income to my S cor

If I start a S corp or that K1 should be issued in my S corp name, specifically?

D. Steven Yahnian
D. Steven Yahnian
answered on Dec 5, 2021

If your S Corporation becomes a partner in the partnership, then your S Corporation will report the income from the partnership as evidenced by K-1 issued to it by the Partnership. Then, you will report the income on your K-1 from the S Corporation because the partnership income passes through to... View More

1 Answer | Asked in Tax Law and Real Estate Law for California on
Q: Will I receive a $250,000 tax exclusion under Prop 13 from selling inherited ownership (less than 100%) in property?

My parents bought the home in 1995 and owned it 50/50. About 6 years ago they divorced and my mother moved out and my father stayed living in the home with my brother and me. My father recently passed in June of 2021 and left his 50% ownership to my brother and me in his trust. My mother is gifting... View More

D. Steven Yahnian
D. Steven Yahnian
answered on Dec 4, 2021

You shared a lot of facts and posed what ultimately appears to be a income tax question concerning the tax effect of your sale of your 1/2 interest in the house. You are not asking about the effect of Proposition 19 on the property taxes you would pay.

Here are the income tax rules that...
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