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California Tax Law Questions & Answers
1 Answer | Asked in Tax Law for California on
Q: Covid-19 act provides assistance to americans who qualify so It is not a tax refund even if IRS is in charge.

this an economic assistance service provided by the Gov . How is that IRS is with holding these monies from debts due to child support. Does it mean that they don't get to have help? Not all fathers are dead beat dads and this is a help for some and a punishment for those in debt for reasons... Read more »

Bruce Alexander Minnick
Bruce Alexander Minnick answered on Jun 8, 2020

Whoever told you that is wrong.

The recent $1,200 stimulus check (or deposit) everyone was entitled to receive from the IRS was not a free gift. The payments are legally considered as advances on any tax refund the taxpayer recipient might be entitled to at any time in the future....
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2 Answers | Asked in Tax Law for California on
Q: When deducting attorneys fees incurred for the collection of taxable alimony, do I deduct the full amount incurred?

On my tax returns, When deducting attorneys fees incurred for the collection of taxable alimony, do I deduct the full amount incurred or only the portion that I paid? I still owe on the total I incurred.

For example- I incurred $15,000 in attorneys fees to enforce collection of taxable... Read more »

David S. Greenberg
David S. Greenberg answered on Jun 4, 2020

You can deduct only the amount you actually paid.

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1 Answer | Asked in Divorce, Family Law and Tax Law for California on
Q: Do I have to report spousal support arrears I received that was ordered to be paid to me in 2019?

I receive spousal support under a 2016 temporary support order. The divorce is still pending. I know I need to report that income on my tax returns since that order is from before 2019. However, in 2019 my spouse was found in contempt of court for failure to pay support and was ordered to pay me a... Read more »

Bruce Alexander Minnick
Bruce Alexander Minnick answered on Jun 1, 2020

Any money you receive from any source must be reported to the IRS in the tax year that you received it.

1 Answer | Asked in Tax Law for California on
Q: Under the CARES act can I take a withdrawal from my 401(k) and use it to payback an existing 401 (k) loan?

One portion of The CARES act allows for withdrawals from your 401(k) without the typical 10% penalty. Additionally, it appears you can avoid the state and federal taxes if you put the equal amount back into the 401k within 3 years. In my scenario, would withdrawaling the funds to pay back an... Read more »

Zaher Fallahi
Zaher Fallahi answered on May 25, 2020

I believe the CARES Act requires specific purposes for the “use” and your intended purpose may not qualify. Talk to the custodian. I hope this helps. Zaher Fallahi, Esq, CPA (CA &D.C.).

Disclaimer: The information provided here is not intended for and may not be construed as...
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1 Answer | Asked in Tax Law for California on
Q: IRS Sent me a Tax Court Letter, what Are My Options Here ? I Didnt Get their 1st Letter. This Is A Final Notice

The IRS Sent me a letter saying i owe them money from taxes back in 2017. Turns out this is the 2nd and final letter. Never received the 1st. Anyways it says i owe $4000+ since i worked in additional 3 places and didnt declare taxes. Says i can appeal in tax court. I just figured out me and my dad... Read more »

Zaher Fallahi
Zaher Fallahi answered on May 25, 2020

You and dad may take your documents to a tax professional and get everything straightened out. It may not be necessary to go to the tax court. I hope this helps. Zaher Fallahi, Esq, CPA (CA &D.C.).

Disclaimer: The information provided here is not intended for and may not be construed...
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1 Answer | Asked in Business Law and Tax Law for California on
Q: LLC in California owns a bar that closes. The LLC is delinquent on unsecured property taxes with the county.

Can the county go after members/owners of the LLC for payment of delinquent unsecured property tax?

Zaher Fallahi
Zaher Fallahi answered on May 25, 2020

Generally, if the LLC is kept separate from the members (no commingling), the LLC money has not been taken for personal use, etc., the members’ liability is limited to their capital in the LLC. Since there was a real property in the LLC’s name, it may have had a counsel, who would be in a much... Read more »

2 Answers | Asked in Estate Planning and Tax Law for California on
Q: does the trust have to get a s.s. number and pay taxes every year?
James Edward Berge
James Edward Berge answered on May 23, 2020

In general, if the trust is revocable, no. The trust is identified for tax reporting purposes by the Social Security Number of the trustmaker and all trust income if any is reported on the trustmaker’s annual 1040 individual income tax return.

And in general, if the trust is irrevocable,...
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2 Answers | Asked in Estate Planning and Tax Law for California on
Q: My mother wants to gift my wife and I her house. She has under 1 million in assets. What are the tax considerations
Jonathan Purcell
Jonathan Purcell answered on May 21, 2020

There is a requirement to report gifts more than $15,000 per year on form 709.

The tax will be levied only if at the time of death, the combination of all lifetime gifts and donor's decedent estate, exceeds the the gift and estate tax exemption, then in effect, currently $11.58...
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1 Answer | Asked in Tax Law for California on
Q: If a married couple are filing jointly, can one of them file a portion of their income separately w/o the other knowing?
D. Mathew Blackburn
D. Mathew Blackburn answered on May 18, 2020

No. You can't file joint and file a separate return.

Even if you file Married Separate you have to allocate income under the community property rules of California.

2 Answers | Asked in Tax Law, Civil Rights and Gov & Administrative Law for California on
Q: Are my rights being violated by not been able to contact anybody at the IRS about my taxes

I filed my taxes on February 21st 2020 I haven't received any stimulus and nor my tax return and I can't contact anybody at the IRS business going against my civil rights

D. Mathew Blackburn
D. Mathew Blackburn answered on May 13, 2020

Probably not. If you think they are you can file a lawsuit once the courts reopen.

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1 Answer | Asked in Tax Law for California on
Q: My divorce was final in 2019. We filed taxes jointly for 2018. The taxes were paid with joint funds. My ex now says I

owe him for half of those paid taxes, which is quite a bit. Is he correct? It came out of left field. I'm in California.

D. Mathew Blackburn
D. Mathew Blackburn answered on May 11, 2020

What does the separation agreement say?

If the taxes were paid from marital funds and there was no provision i the final orders of the domestic court addressing the matter then he doesn't have a claim. if he disagrees his recourse is to file a motion for contempt of court for breach...
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1 Answer | Asked in Tax Law and Business Law for California on
Q: Filing State taxes with Franchise tax board when annual taxes have not been paid for LLC?

This is a two part question.

I started a single member LLC in California in 2017. The LLC never conducted any business however, I have not yet dissolved it. Currently, it is suspended with the Sectary of State. Every year, I file a schedule C federal tax return and no state return (The... Read more »

Kenneth Sisco
Kenneth Sisco answered on May 10, 2020

I am not advising you not to pay your annual minimum tax, or not to dissolve your LLC; only what will happen if you don't. If set up properly, the minimum tax is assessed against the LLC, not you. If it is not paid, the LLC will be suspended. If you do not dissolve the LLC and do not pay... Read more »

2 Answers | Asked in Employment Law and Tax Law for California on
Q: Was I deducted the correct amount of federal tax on my final check?

I received my last paycheck and my company deducted 22% from my federal tax instead of the usual 12%. When I asked the payroll employee she said that it was because manual checks some how have a higher tax. Does that sound correct? I live in California and am an hourly employee.

Neil Pedersen
Neil Pedersen answered on May 6, 2020

There is not a higher tax rate applied to final checks because they are final checks. However, if the final check was larger than a normal pay period check, such as including all remaining PTO, the rate applied to the larger amount could be higher for a couple of reasons. It could be that the... Read more »

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1 Answer | Asked in Tax Law for California on
Q: My CPA is asking what IRS code determines the tax incentive of a solar system contracted, purchased and paid in 2019?

My accountant believes it is when the system comes on-line, not when it is contracted or paid. Is this true? I need the tax credit for 2019, not 2021. Even though it was paid, contracted and installed in 2019, but because of construction will not be in service until next year.

D. Mathew Blackburn
D. Mathew Blackburn answered on May 6, 2020

CPA is probably right.

See Notice 2013-70. https://www.irs.gov/pub/irs-drop/n-13-70.pdf

There may be additional facts and circumstances that would allow a credit in 2019 but generally you have to be making power to get the credit that year.

1 Answer | Asked in Elder Law and Tax Law for California on
Q: We sold our home in 2019 to retire. We bought a fixer and paid for solar. Can we use the 2019 tax credit of 30%?

We are living on the property, Still renovating the house and it may not be habitable for some time. Does placed-in-service apply to us? We need the credit for 2019, as we no longer have income for 2020.

Bruce Alexander Minnick
Bruce Alexander Minnick answered on May 5, 2020

If you bought the fixer in 2019 and either contracted for solar in that tax year or had it installed that year you can probably deduct it in you 2019 taxes (I say "probably" because I have not read the controlling statute or the contract).

2 Answers | Asked in Tax Law for California on
Q: Consulting project coming up, corporation registered in WA, living in CA, how to save tax?

I have registered a corporation in WA (C-CORP). I have a consulting project coming up. I tried to use the WA corporation to do the consulting because the consulting fee is not taxable in WA. The consulting project is to help a bank in California but it will be done remotely---I do not need to visit... Read more »

D. Mathew Blackburn
D. Mathew Blackburn answered on May 2, 2020

Move out of California.

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1 Answer | Asked in Tax Law for California on
Q: If you are not married. But live with the father of your four children. He claimed kids on 2019 taxes. He didn't

Support the kids the full calendar year and he owes child support from previous relationships can they take my kids stimulus money? Franchise tax board sent him letter for child tax credit refund pending.

Zaher Fallahi
Zaher Fallahi answered on Apr 29, 2020

You and you partner should talk to a tax prepare to advise you about calming the children, based on reviewing your tax records. your partner You may present the POA to the bank. I hope this helps. Good luck. Zaher Fallahi, Esq, CPA (CA &D.C.).

Disclaimer: This is for information...
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2 Answers | Asked in Tax Law for California on
Q: Pro or Con of filing separately or jointly for 2019 taxes. She has properties. We have house to be sold. Also tax bill
David S. Greenberg
David S. Greenberg answered on Apr 23, 2020

In community property states such as California, all income earned by either spouse belongs equally to both. Therefore, if you file separate married returns, you must total all marital income then divide it down the middle, with each of you reporting half.

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2 Answers | Asked in Tax Law for California on
Q: if my parents owe taxes can they file now and don't have to pay until july 15?

My parents owe taxes, and they want to wait till july 15 to file because they owe money, but if they file now, they won't have to pay until july 15, right? The reason I'm asking is be causse on the 2018 taxes they put me as a dependant, and 2019 their not going to put me down?

Paul Martin Vargas
Paul Martin Vargas answered on Apr 15, 2020

Hi. Yes, they can file now and wait until July 15 to pay what is owed on the return.

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1 Answer | Asked in Tax Law for California on
Q: Hello, I would like you to further explain and dissect the "Wholesale cost” definition whether it is less ambiguous.
Paul Martin Vargas
Paul Martin Vargas answered on Apr 15, 2020

Hi. The wholesale cost is the cost of the product at a price when sold in bulk, which more often than not is cheaper than the retail price. The cost is usually the price charged from vendor to vendor. Retail price is vendor/retailer to consumer. I hope I am answering your question.

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