Illinois Tax Law Questions & Answers

Q: I have a 1099c for a settled loan I cosigner. If I try for insolvency do I have to report my 401k as an asset.

1 Answer | Asked in Tax Law for Illinois on
Answered on Feb 15, 2017

Short answer: yes.

When you examine whether you qualify for insolvency, read IRS publication 4681. Page 6 includes an insolvency worksheet. Insolvency looks at all your assets (and equity in assets) as well as income to determine whether you are insolvent or not. If your assets, equity, and income are negative (calculated to the time of the debt cancellation) when the liabilities are subtracted out, you may be insolvent. However, the insolvency exclusion will be limited to the...
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Q: What can I do about the irs? First they say I owe back taxes, then I don't, now I do. Please help!

1 Answer | Asked in Tax Law for Illinois on
Answered on Feb 4, 2017

Contact a tax attorney or an enrolled agent as soon as possible. If you are considered a low income taxpayer, you can seek help with a Low Income Taxpayer Clinic in your state.

You can also try the Taxpayer Advocate.

If you're at the garnishment phase, you need help immediately.
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Q: Property has been sold for taxes, Im not able to pay the taxes back by the redemption period how long do I have to stay?

1 Answer | Asked in Tax Law and Real Estate Law for Illinois on
Answered on Feb 2, 2017

You should contact a lawyer immediately if you have not already done so.
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Q: Can I claim my 27 yr old daughter who has lived with me in 2013? She lost her job and I have supported her.

1 Answer | Asked in Tax Law for Illinois on
Answered on Mar 2, 2014

You can claim your daughter if she (1) is a US citizen, (2) is your child, (3) has gross income for the year less than $3,900, (4) did not file a joint return and (5) you provided more than half of her support during the tax year.

If you claim her, she cannot claim herself on her personal tax return that she files.

Q: I am 62-years-old and want to sell my house and lot. What will be my tax rate?

1 Answer | Asked in Tax Law for Illinois on
Answered on Nov 16, 2013

If you are single and have had the house and lived in it for the past 24 out of 60 months, you can exclude up to $250,000 of the gain. Any excess would be taxed at 15 % for the Fed, plus state rate. Consult a tax lawyer.

Q: If a bank account is only in my spouse's name, do I have to pay inheritance tax on it?

1 Answer | Asked in Tax Law for Illinois on
Answered on Nov 16, 2013

If the account is is her sole separate property, which may be in your state, then you will receive it an inheritance if you are the only heir. Her estate will include the account in her estate and file an estate tax return, form 706, and may or may not be subject to any taxes. This year the threshold is $5,250,000. Anything in excess would be taxed at 40%. Generally, the heir doesn't pay inheritance taxes. Consult a probate or tax attorney. Good luck.

Q: An IRS official gave me disinformation regarding available administrative procedures. What federal law did he break?

1 Answer | Asked in Tax Law for Illinois on
Answered on Jan 10, 2012

Happens all the time. When you are dealing with the IRS, what they are supposed to do and what they do are two different things. This is why I always advise against representing yourself. Even if you can figure out the law, the procedure is where they trip you up. I have seen the Chief Counsel lawyer deliver the paperwork the day of trial for a pro se taxpayer. They will take advantage of inexperience.

At this point, you want to contact an attorney. It will likely cost you more if you...

Q: I am in a Joint Tenancy with 3 persons at a residential home in the state of Illinois. Who pays yearly property taxes?

1 Answer | Asked in Tax Law for Illinois on
Answered on May 5, 2011

The question of how you choose to split the tax liability among the owners isn't necessarily a legal one. However, under Illinois state law, in general, all owners of a property are jointly and severally liable for the property tax. That means that the governmental entity can seek to collect the full amount of any unpaid property taxes from any one or more of the owners of the property.

*This is not legal advice and does not create an attorney client relationship*

Q: My husband is a senior citizen and we have delinquent property taxes We can not afford to pay them.

1 Answer | Asked in Tax Law for Illinois on
Answered on May 5, 2011

You may be eligible for the Senior Citizens Real estate Tax Deferral Program. Essentially the state pays the taxes on the home and then requires repayment of the taxes when the home is sold or transferred. However, to qualify for the program, you will need to find a way to bring your property taxes current before you can apply to the program. Once you are in the program, the state will pay your taxes using the equity in your home as a guarantee. You can find out more about it here:...

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