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Utah Tax Law Questions & Answers
1 Answer | Asked in Tax Law for Utah on
Q: I have a question about Generation Skipping Transfer tax.

If a dynasty trust has been created and all of the applicable GST exemption has already been allocated, what can a beneficiary do to increase this exemption for future generations? Could the beneficiaries pull out the corpus that isn't GST exempt and put it back into the trust using THEIR GST... Read more »

D. Mathew Blackburn
D. Mathew Blackburn answered on Sep 19, 2019

You use a power of appointment to include a portion of the trust corpus in the skip-person's estate subjecting it to estate tax and using their lifetime exemption.

or you can create a current gift through a sub-trust and lock in the current lifetime exemption before it drops in 2025....
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2 Answers | Asked in Employment Law and Tax Law for Utah on
Q: I was overpaid by my employer, the DOD, and ended up losing $7k that I was told would come back through taxes. It didn't

I work for Hill AFB and I have a rather interesting problem that I am not sure how to resolve. My problem is not with the IRS but with DFAS (Defense Finance and Accounting Service).

When I started working for Hill, in 2017, I was guaranteed an 11k bonus. I received this bonus. The problem... Read more »

Bruce Alexander Minnick
Bruce Alexander Minnick answered on May 23, 2019

You said you received $11,000, as promised. Then you said you received another bonus--without telling us how much. Bottom line: If you received a second bonus you did not deserve (under your employment contract) then you must repay it.

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1 Answer | Asked in Tax Law for Utah on
Q: Can I stop my house from auction due to owing 5 years property tax if I pay off at least 1+ yrs of what is owed?

I took the home over when my father passed away, my father owed back property tax already at this time. I did pay on some of the past due but wasn't able to pay off completely. Well I got notice that due State Utah law if someone is delinquent on property tax for 5 years they can put the home up on... Read more »

Bruce Alexander Minnick
Bruce Alexander Minnick answered on May 10, 2019

Yes that will probably work; but you MUST keep paying the overdue taxes--and the current taxes when they come due--or you will probably get to watch your house disappear soon.

1 Answer | Asked in Tax Law for Utah on
Q: Will I have to pay taxes on the sale of my house?

I have lived in my house for the last 20 years. For the last year, I have lived with my daughter and her husband at their house in the same town. The reason I have not lived in my house is that I allowed my son and his family to live there for a short period while he transitions from Texas to Idaho... Read more »

Eric Steven Day
Eric Steven Day answered on Jul 20, 2018

You will not have to pay taxes on the income of the sale of a personal residence for up to $250,000 (single taxpayer)/$500,000 (married filing joint taxpayer) of income. However, you must meet the ownership and use test:

During the 5-year period prior to the sale of the home, you must...
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1 Answer | Asked in Tax Law for Utah on
Q: If you are selling a property, how long must you have lived there in order to not pay taxes on the profit?

I've seen the "2 out of 5 years" rule floating around, but I'm not sure I fully understand it. It sounds like you must have lived there for 5 years total, but at least 2 of them had to be your primary residence...The home in question was my primary residence for almost 3 years total (always primary... Read more »

Wesley Winsor
Wesley Winsor answered on Mar 15, 2018

There are two independent tests that you have to meet: the "use test" and the "ownership" test. You have to meet both of them in order to claim the exemption.

Ownership Test: This means that you have to have owned your home for at least 2 out of the last 5 years.

Use Test: You must...
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1 Answer | Asked in Tax Law for Utah on
Q: I am the executor of my fathers estate and have been paying the mortgage payment can I claim the mortgage on my taxes?

When I get correspondence from the mortgage company It says the estate of.....

Wesley Winsor
Wesley Winsor answered on Jan 31, 2018

Hi,

No, you can't deduct mortgage payments or interest on mortgage payments from your own personal taxes. If you are paying the mortgage out of your own pocket make sure you keep good records because you are entitled to reimbursement for all expenses you front the estate. So if you sell the...
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2 Answers | Asked in Estate Planning, Tax Law and Probate for Utah on
Q: I cannot find my mother's will. I have a brother. He told me to handle things. Will we still go through probate?

She still owes on her house. We are going to pay it off. What about other bills? I was told to start sending the death certificate to bill collectors. She was taken to the hospital from work where she passed. Are they responsible for any of the bills? She was working for the local 99 union. She... Read more »

William Tyler Melling
William Tyler Melling answered on Oct 9, 2017

I am sorry for your loss. Usually, if the estate has any real estate that was in her name and not held in a Trust, a probate will be required to transfer the home to the names of her heirs or to give you authority to sell her home. However, if you find that the back taxes owed, medical debts, and... Read more »

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1 Answer | Asked in Business Law, Contracts and Tax Law for Utah on
Q: If a contract with a new client requires money to be spent to complete the contract, is that money a business expense?

My business is looking to acquire a new client. The contract with this client would require me to spend some of that money to complete with the contract itself. Would I be OK to write off that money spent as a business expense, or would I be taxed on the complete income?

Wesley Winsor
Wesley Winsor answered on Jul 18, 2017

Nearly any legitimate business expense can be discounted against revenues. I think you will need to be more specific on your question. If you are having to spend money to acquire new or specialized equipment or an upgrade of some sorts then absolutely.

I hope this helps.

Wes

1 Answer | Asked in Business Law and Tax Law for Utah on
Q: Do I need a to get a EIN number from business's who I am paying rent to every month in order to take it as a tax writoff

I own a windshield repair business and i rent parking lots from business's. I pay thousands a month. How can i take it as a write off? Do i need to get their EIN or have them fill out a 1099 document?

Wesley Winsor
Wesley Winsor answered on Jun 8, 2017

If you are running it as a sole proprietorship, then you don't need to get a separate EIN, you can just use your own Social Security number when you report your taxes. If your company is an LLC then you will already have an EIN and you will u se the EIN when you do your taxes.

Can you...
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1 Answer | Asked in Tax Law for Utah on
Q: If you purchase something for both work and personal use, can you write off the cost?
Wesley Winsor
Wesley Winsor answered on May 5, 2017

Yes and no. For instance, if I buy a car for my business, but I also use it day in and day out than I have to make a determination of how much I use it for business purposes (not including the first trip to the office/job site/location) and I can then write a certain percentage of that purchase... Read more »

1 Answer | Asked in Real Estate Law and Tax Law for Utah on
Q: Can we roll over the sale of our rental house into down payment when we've been living in a rental ourselves 7 years?

We haven't lived anywhere but our current rental since we moved. We have been depreciating for taxes.

Matthew M Montoya
Matthew M Montoya answered on Dec 31, 2016

I believe what you're looking for is called a Section 1031 "Like-kind Exchange." Here is an IRS publication on the issue that goes into the transaction a little https://www.irs.gov/uac/like-kind-exchanges-under-irc-code-section-1031

There are many practitioners who focus in these kinds of...
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1 Answer | Asked in Real Estate Law and Tax Law for Utah on
Q: Is there a way to put my mom's name on a property deed, but she's not responsible or own the property?

Then after her death it just goes back to me. This is to show her ownership to get the property tax relief. I own the property, but she lives there and pays for everything dealing with the property.

Terrence H Thorgaard
Terrence H Thorgaard answered on Oct 19, 2015

She probably needs to "own" the property in order to qualify for the tax exemption. See an attorney in your jurisdiction to find out the best way to accomplish this. A life estate is one possibility.

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