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California Tax Law Questions & Answers
1 Answer | Asked in Tax Law for California on
Q: Is my rebate from Zillow 360 considered income for IRS purposes? I received a 1099-MISC for it.

To qualify for the rebate, I had to 1) Sell my current home to Zillow, 2) Purchase my new home through an approved Zillow real estate agent, and 3) Finance my new home through Zillow Home Loans. After all three requirements were met, I received a Rebate of 2% of my former home's selling... Read more »

Rogelio (Rod) B. Tuazon
Rogelio (Rod) B. Tuazon
answered on May 4, 2022

You are correct. Generally when a company pays a customer compensation in the form of a rebate as an inducement to use their services (sell/buy/loan), that payment is not considered income. Price adjustments and rebates are not considered in the broad definition of gross income.

1 Answer | Asked in Business Formation and Tax Law for California on
Q: Public purpose vs Charitable Purpose

On the filing of article incorporation of a NPO, two purposes available for ticking : Public purpose and Charitable purpose. What’s the difference? Also If Public purpose is checked can the organization still get 501(c)(3) tax exempt status ?

Matthew Morris
Matthew Morris
answered on Apr 28, 2022

A good question. It's not helpful that courts in California have frequently used the terms "public purpose" and "charitable purpose" interchangeably.

Taking your last question first: the IRS will not likely deny a 501(c)(3) determination if you check the box for...
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1 Answer | Asked in Tax Law for California on
Q: I owe California income tax. My wages are being garnished but they also levied my bank account. Can FTB do both?
David S. Greenberg
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David S. Greenberg
answered on Apr 22, 2022

Unfortunately, the California Revenue and Taxation Code allows the FTB to do this.

It's important to note that relief from the levies may very well be available.

It's best to immediately establish contact with an experienced tax attorney to help you with this.

1 Answer | Asked in Real Estate Law and Tax Law for California on
Q: I live in California, but have a house in Puerto Rice. Is there a withholding of 15% to the IRS for the sale of my house

I live in California, but have a house in Puerto Rice. Is there a withholding of 15% to the IRS for the sale of my house for $400k

David S. Greenberg
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David S. Greenberg
answered on Apr 21, 2022

The IRS only requires 15% of the sales price be withheld on the sale of United States real property interests by foreign persons.

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... Read more »

Rogelio (Rod) B. Tuazon
Rogelio (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... Read 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... Read 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... Read 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... Read 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... Read 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... Read 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... Read 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... Read 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... Read 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... Read 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... Read 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... Read 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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