Ohio Tax Law Questions & Answers

Q: I own property in OH, paid cash. Tax exempt to transfer property to LLC, which wife and I are members? Which exemption?

1 Answer | Asked in Real Estate Law and Tax Law for Ohio on
Answered on Sep 20, 2018
Joseph Jaap's answer
Choice 5(m), and you must provide an affidavit with all the details. Talk to your county auditor for details.

Q: I have a land contracted house that my mom purchased 8 yrs ago. If we sell will she have to pay capital gains tax?

1 Answer | Asked in Contracts and Tax Law for Ohio on
Answered on Jun 22, 2018
Joseph Jaap's answer
Whether there is a capital gain, and whether she pays tax on it, depends on all the facts and her financial circumstances. She should consult a tax professional who can review the facts and advise her.

Q: We want to use funds from my IRA to pay a $5000 medical bill. What are the tax consequences

1 Answer | Asked in Tax Law for Ohio on
Answered on Jun 14, 2018
Eric Steven Day's answer
If you distribute from your IRA to pay medical bills, the distribution would be considered taxable income and be subject to income taxes at your normal income tax rate. You don't have to pay a 10% penalty for the early withdrawal once you have reached the age of 59 1/2. However, even if you were going to be penalized for the withdrawal, there is also an exemption from the 10% penalty if you distribute from the IRA for medical purposes. It would be important to know whether the IRA was a...

Q: Can I deduct child support payments on my taxes?

2 Answers | Asked in Tax Law for Ohio on
Answered on Jun 9, 2018
Linda Simmons Campbell's answer
You cannot deduct child support payments. You can only deduct alimony, which is in turn taxable to the person receiving the alimony. I have seen some divorce agreements set up as unallocated alimony and child support. That means that you may be able to deduct almost all of the payments as alimony, however, this is rare.

Q: inherited a 401k as a beneficiary. what is the best way to handle it? was told to set up an inherited 401k plan, take

1 Answer | Asked in Tax Law for Ohio on
Answered on Jun 6, 2018
Eric Steven Day's answer
I am not sure what deductions you would be allowed with an inherited IRA. However, you can roll the 401K into an inherited 401K that will allow you to stretch the distributions from the plan based on your life expectancy. Sometimes, the inherited 401k requires that the whole amount is distributed within a 5 year- period so it somewhat depends on the rules associated with the 401k you inherited. However, I would roll it into an Inherited 401K and begin making the distributions over your life...

Q: I bought a condo for my daughter to live in during college.(owned under my LLC) Would it benefit me to list her as

1 Answer | Asked in Business Law and Tax Law for Ohio on
Answered on Jun 5, 2018
Eric Steven Day's answer
It seems that if you paid her (a deduction) so that she could pay you rent (income), there would be some sort of wash there with the income offsetting the deductions. The way this might benefit you, is this could then be treated as a rental and you would be able to depreciate the property. However, for her to be considered an employee, there would have to be some business purpose that she is performing on behalf of the LLC.

Q: I don't know what to do about 2 different letters I got from the IRS after being audit?

1 Answer | Asked in Tax Law for Ohio on
Answered on Apr 23, 2018
Michelle D. Wynn's answer
You should respond to the March 26th letter and provide the information again. Even though the inquiries are being handled by the same department at the IRS, it is quite likely that they have not associated the two years in their system and if you do not respond to the March 26th letter, they will likely disallow the EIC for that year and send you a notice that would require you to petition Tax Court to get the matter resolved.

Q: company A transfers money from Company B into Company A's bank account #1 and then Company A transfers that money back

1 Answer | Asked in Tax Law, Business Law and Employment Law for Ohio on
Answered on Mar 20, 2018
Joseph Jaap's answer
Who is telling you to do that? If it is the company's attorney or accountant advising you to do this, get a second opinion if you are uncomfortable. As president, you have certain fiduciary duties under Ohio law, and so the company should have both an attorney and a tax adviser to provide appropriate advise when such questions arise. Use the Find a Lawyer tab to retain a business attorney to represent the company in its affairs. The attorney can probably recommend a business tax accountant.

Q: I did not file Ohio Federal and state taxes for 2013, 2014, & 2015. What are the consequences for this action?

1 Answer | Asked in Tax Law, Civil Rights, Federal Crimes and Municipal Law for Ohio on
Answered on Mar 2, 2018
Linda Simmons Campbell's answer
If you owe taxes you will be assessed penalties including failure to file, late payment, and possibly underwithholding as well as the interest due. File the returns and then request a penalty abatement. The IRS usually will grant an abatement request for the first year or if you have a compelling reason for not filing your taxes, they may grant you one for all years. If you cannot pay the amount due, you can request a collection alternative. If it a substantial amount that you cannot pay...

Q: My husband and I have agreed to a divorce and to file our taxes separately this year. He is now threatening to sue me.

1 Answer | Asked in Divorce and Tax Law for Ohio on
Answered on Mar 1, 2018
Joseph Jaap's answer
What does it mean that you "agreed to a divorce." That sounds like there is no divorce filed, and your spouse is bullying you. If you have not yet filed for divorce, then use the Find a Lawyer tab and retain and attorney to proceed with filing for the divorce ASAP. The divorce process will determine how you will be filing tax returns. You both can file for an extension of filing 2017 returns until that has been resolved. Don't let him bully you with threats. Get your own attorney, and...

Q: If I owe back taxes I know they will take 15% but I also owe the VA hospital will they also take 15%

1 Answer | Asked in Tax Law for Ohio on
Answered on Feb 24, 2018
Linda Simmons Campbell's answer
Your social security cannot be garnished more than 15% in total. With the exception of the IRS (who can always take 15% regardless of the amount you receive) a levy on your social security to repay a federal debt can not leave you with less than $750 a month.

If you owe taxes to the IRS and your only source of income is social security, there is a good chance that you can work out a collection alternative with the IRS. I recommend that you seek the advice of a good tax attorney....

Q: Can the father still claim children on taxes if he is behind on child support?

1 Answer | Asked in Child Custody, Child Support and Tax Law for Ohio on
Answered on Feb 5, 2018
Joseph Jaap's answer
Two different questions. If he has not paid child support, file for contempt with the court. If the parenting agreement says he claims them as dependents, and he does, but he has not provided sufficient support per IRS, then that's for the IRS to deal with. Talk to your attorney and your tax accountant.

Q: Filing taxes single mom with one child

1 Answer | Asked in Child Custody, Child Support, Family Law and Tax Law for Ohio on
Answered on Jan 24, 2018
Joseph Jaap's answer
If you were not married to the father, or there is no court order regarding custody, and a court has not ordered father to pay child support, then the father has no legal relationship to the child, and the mother is the sole custodian of the child and claims the child. If father provides some support and does claim the child, then the IRS might question if his claim is valid. Check with a tax preparer.

Q: I pay local tax in both my work an resident cities. My resident city refuses to give me credit for tax paid where I work

1 Answer | Asked in Tax Law for Ohio on
Answered on Jan 3, 2018
Matthew Williams' answer
Most cities don't give credit. It is a matter of local law. Read the tax ordinances. They don't have to credit you unless the law says so.

Q: Borrowe $75M from sister When repaid does she owe IRS No interest paid

1 Answer | Asked in Real Estate Law, Securities Law and Tax Law for Ohio on
Answered on Dec 22, 2017
Joseph Jaap's answer
The IRS can impute interest to a loan, even if no interest is charged or paid to the lender, and tax might be owned on that amount of imputed interest. Ask a tax advisor.

Q: My mother passed away with an estate of about $130,000 (no house or car).

1 Answer | Asked in Tax Law and Probate for Ohio on
Answered on Oct 9, 2017
Joseph Jaap's answer
Talk to the attorney who is handling her probate case. If there is no attorney, consider talking to an attorney, so that the probate is handled properly. Use the Find a Lawyer tab.

Q: Should retirement income made and taxed in another country be taxed by Ohio if it is exempt from federal tax?

1 Answer | Asked in Tax Law for Ohio on
Answered on Aug 20, 2017
Michelle D. Wynn's answer
The short answer is yes, Ohio will tax this income. Ohio, like many other states, bases its income tax on your Federal Adjusted Gross Income with some special additions and deductions. None of those deductions apply to exclude retirement income earned outside the United States.

Your wife's retirement income from Brazil is included in your Federal Adjusted Gross Income and then IRS Form 1116 allows you to take a credit for the taxes imposed by Brazil. If your US taxes on this income are...

Q: where do I find USTC case "Hancock (T. C. Memo 2012-31) ?

2 Answers | Asked in Tax Law for Ohio on
Answered on Aug 13, 2017
J Timothy Bender's answer
Go to the website for the US Tax Court (www.ustacourt.gov), click on the Opinion Search tab. Put Hancock in the name box and hit Search. It is the first case listed in the results.

Q: What are the tax benefits of setting up a trust?

1 Answer | Asked in Tax Law for Ohio on
Answered on Aug 4, 2017
J Timothy Bender's answer
For most people, there is no income tax advantage to establishing a trust. Under certain circumstances there may be gift or estate tax benefits. You need to have a tax expert look at your particular circumstances to determine if there is a benefit for you before you consider setting up a trust. Most trusts are established for estate tax purposes and/or for non-tax reasons.

Q: Is there any case law defining "a reasonable length of time" as used in Ohio Revised Code 5713.03?

1 Answer | Asked in Real Estate Law and Tax Law for Ohio on
Answered on Jul 5, 2017
Matthew Williams' answer
There may be some case law on that point, but here's the thing: the statute says the auditor "may consider" the sale price. It doesn't say they have to.

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