Colorado Tax Law Questions & Answers

Q: Can my company put moving expenses that they paid for into my yearly income for tax purposes?

1 Answer | Asked in Contracts and Tax Law for Colorado on
Answered on Dec 27, 2018
D. Mathew Blackburn's answer
Yes, under the Tax Cuts and Jobs Act relocation expenses are now taxable to the recipient whether paid on their behalf or given to the employee in cash.

You also cannot deduct these expenses on your personal return unless you fall within a specific military exemption. This all went into effect 1.1.18.

Even though they paid the expenses it's still income to you for tax purposes.

Q: Do the taxes I'll be filing next April reflect the government's new tax law?

1 Answer | Asked in Tax Law for Colorado on
Answered on Dec 11, 2018
D. Mathew Blackburn's answer
Yes, the majority of the provisions of the Tax Cuts and Jobs Act of 2017 (TCJA) took effect 1.1.2018. Some did not, most notably accelerated depreciation took effect 9.27.17 and the ACA penalty is removed 1.1.19.

Q: How would I go about having a lawyer ready to use in case i every needed one.

2 Answers | Asked in Consumer Law, Criminal Law, Personal Injury and Tax Law for Colorado on
Answered on Nov 24, 2018
D. Mathew Blackburn's answer
It's always better if you can build a professional relationship before the disaster strikes.

My suggestions would be to call them up and talk to them. Sign an agreement. Put down a retainer of an agreed upon amount. If anything happens you have a lawyer retained and they know they'll get paid.

Some attorneys won't do this at all because they don't want to be responsible for representing you for whatever; they want to know what they're getting into. Others will likely charge...

Q: I have a signed 8332 and divorce decree grants me to claim child on taxes. Can I still claim if I have arrears balance?

2 Answers | Asked in Child Support and Tax Law for Colorado on
Answered on Nov 16, 2018
D. Mathew Blackburn's answer
If the arrearages are for child support, no you can't claim the child. If it's for taxes then yes, but they'll apply any refund against the arrearages.

Q: Is there a law that specifically says you have to pay income tax in Colorado?

1 Answer | Asked in Tax Law for Colorado on
Answered on Nov 5, 2018
D. Mathew Blackburn's answer
Colorado Revised Statutes 39-22-104.

Q: ISO: business/tax lawyer

1 Answer | Asked in Tax Law, Business Formation and Business Law for Colorado on
Answered on Oct 20, 2018
D. Mathew Blackburn's answer
Tax is not restricted to only attorneys that are licensed in the state. I have cases in about 10-11 different states. I'd have to go count them to be sure.

A Colorado attorney can help you with this issue.

Q: Do international companies located outside the USA have to pay Sales tax in colorado for goods purchased.

1 Answer | Asked in International Law and Tax Law for Colorado on
Answered on Oct 6, 2018
Richard Sternberg's answer
Unlike VAT, sales tax is paid by the vendor at point of sale. So, if the purchase was in Colorado, the vendor must report and pay sales tax on the sale unless there is an exemption under state law. Such exemptions often exist for non-profit charitable entities with § 501(c) status, but the exemptions are controlled by Colorado state law. You should consult a lawyer in Colorado for details.

Q: Do International Business's pay state taxes in colorado if the vendor supplied to an international company not located

1 Answer | Asked in Tax Law for Colorado on
Answered on Oct 5, 2018
D. Mathew Blackburn's answer
It's going to depend on the goods and services provided. Is the company paying for a service or a good? Services are not subject to sales tax, goods are. If I have my brakes changed am I buying brakes, the installation service, or both? The first step would be an analysis of what was purchased and how does CO treat that purchase for sales tax.

For income tax purposes if the international company is buying from you and selling to a 3d party that you then deliver the stuff to, it...

Q: Colorado is claiming that I own them back taxes for a year that I didn't live there or earn any income there.

1 Answer | Asked in Tax Law for Colorado on
Answered on Sep 20, 2018
D. Mathew Blackburn's answer
Colorado is incredibly aggressive regarding residency for income tax purposes. You're going to have to provide evidence that you were not physically in Colorado and that you had changed your residency to Utah. Here's a CO Dept. of Revenue ("CDOR") FYI publication explaining resident/non-resident status. https://www.colorado.gov/pacific/sites/default/files/Income6.pdf

I would start with sending in the applicable documents to establish residency in Utah. If CDOR rejects those I would...

Q: I'd like to give stock in my will -- how would that get taxed?

1 Answer | Asked in Tax Law for Colorado on
Answered on Sep 14, 2018
D. Mathew Blackburn's answer
When an individual passes their property receives a step-up in basis to the current Fair Market Value either on the date of death or what's call the alternative valuation date. There are reasons to pick either I won't go into that right now.

What is basis? It's what you paid for the stock. So you buy 1 share of Acme at $40. If you sell it at $90 you pay tax on the gross revenue less basis 90 - 40 = $50

If you own the stock at death the basis "steps up" from $40 to $90 (FMV on...

Q: What kind of deduction can I take on rental property improvements?

2 Answers | Asked in Tax Law for Colorado on
Answered on Aug 23, 2018
D. Mathew Blackburn's answer
If it's a repair you deduct it in the year it's incurred. If it's an improvement you adjust basis and depreciation.

Any expense that is incurred under the ordinary and normal course of a trade or business is deductible. 26 USC 162.

Q: What happens if an individual fails to report a foreign bank account?

1 Answer | Asked in Tax Law for Colorado on
Answered on Aug 3, 2018
Linda Simmons Campbell's answer
If the IRS finds out you will face stiff penalties and interest and possible criminal charges. If this was nonwillfull then your best option is to file via the offshore voluntary disclosure program. You only have until September 28th. The paperwork can be difficult and confusing and you may want to hire an attorney to help you with it. You also want to make sure that your noncompliance was not willfull.

Q: A local bookkeeper prepared our taxes this year. She made mistakes and we want to know what legal actions we can take.

1 Answer | Asked in Tax Law for Colorado on
Answered on Aug 3, 2018
D. Mathew Blackburn's answer
The costs of pursuing legal action for negligence, fraud, etc... are rarely worth the time and costs. You would have to file in the county where you signed the service agreement, or where the BK's place of business is. Filing fee will probably be more than you paid for the return.

If you paid by credit card you can request a chargeback.

I would move on and hire a competent preparer next year.

Let everyone know this person doesn't know how to do returns, just don't...

Q: Are life insurance and jointly-held property considered part of the deceased's estate, and thus subject to taxes?

1 Answer | Asked in Tax Law for Colorado on
Answered on Jul 5, 2018
D. Mathew Blackburn's answer
Usually not, but can't be sure until I've seen the docs.

Q: Are there any Colorado penalties for withdrawing from a 401a account early and when does the IRS assess it's 10% penalty

1 Answer | Asked in Tax Law for Colorado on
Answered on Jul 3, 2018
D. Mathew Blackburn's answer
There's no state level penalty, but you can generally exclude income as taxable to CO if you wait. Colorado FYI Publication 25 https://www.colorado.gov/pacific/sites/default/files/Income25.pdf

The federal penalty is imposed on your F1040 so you'll incur it when you file your return.

Exceptions to the additional 10% tax apply for early distributions that are:

Made to a beneficiary or estate on account of the IRA owner's death

Made because you're totally and...

Q: Today I received a Letter from the city of Lansing, Income tax ordinance, section 99,

1 Answer | Asked in Tax Law for Colorado on
Answered on Jun 16, 2018
D. Mathew Blackburn's answer
If you believe the notices are in error you would need to respond and provide evidence that the assessment is incorrect.

Q: Do I pay incomes taxes on "criminal restitution"?

1 Answer | Asked in Tax Law for Colorado on
Answered on Jun 8, 2018
Eric Steven Day's answer
Yes, you would have to pay taxes on the restitution you received. Any accession to wealth is taxable unless that judgment is in the form of physical pain and suffering.

Q: What should I do if I made an honest mistake on my income tax return?

1 Answer | Asked in Tax Law for Colorado on
Answered on May 18, 2018
D. Mathew Blackburn's answer
The return should be amended using Form 1040X.

Once the return is filed the additional tax owed should be paid and you'll receive a notice for failure to pay penalties. At that point you can either pay the penalty or request an abatement on Form 843 requesting either "first time abatement" or "reasonable cause".

I would suggest contacting a professional so you can have a conversation about whether the "mistake" creates a situation where you need to amend and how to proceed.

Q: trustee kept my distribution (stole) but sent me a k-1 do I have to pay tax

1 Answer | Asked in Tax Law for Colorado on
Answered on Apr 28, 2018
D. Mathew Blackburn's answer
Assuming that the k-1 is correct you are required to report and pay any tax owed. Recovering any money owed to you is a seperate issue.

Q: Are paying taxes voluntary or law?

3 Answers | Asked in Business Law and Tax Law for Colorado on
Answered on Apr 11, 2018

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