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Washington Tax Law Questions & Answers
1 Answer | Asked in Tax Law and Business Law for Washington on
Q: For a single-person LLC choosing to be taxed as an S-Corp, what if revenue isn't enough to pay a "reasonable salary?"

I understand salary must be "reasonable in industry standards" but who decides that, and what if there simply isn't enough revenue to sustain a "reasonable" salary for the owner? I'm a sole prop now (just me, pretty small income), and I'm trying to study the... Read more »

Matthew M Montoya
Matthew M Montoya answered on Jan 26, 2017

To put things in perspective, it's important to remember that an S-Corporation is its own legal person, separate and distinct from its owners. When you, as a single person, elect to turn your LLC into an S-Corporation, you automatically wear two hats - that of a business owner and that of an... Read more »

1 Answer | Asked in Tax Law and Real Estate Law for Washington on
Q: How strict are the "live two years out of the previous five" to get the tax exemption when selling a house?

We've been in and out of the house over the last three years between renters. Does every day count or is it "generally" two years. What kind of documentation is required?

D. Mathew Blackburn
D. Mathew Blackburn answered on Dec 15, 2016

It's a hardline rule, 1 year 364 days doesn't work. It's also more complicated than just 2 of 5, there's 5 steps that can be found at https://www.irs.gov/publications/p523/ar02.html#en_US_2015_publink10008937. IRS Pub 523.

1 Answer | Asked in Criminal Law, Employment Law, Immigration Law and Tax Law for Washington on
Q: can i do affiliate marketing on Opt status and H1 my course subjects are related to computer science

i was doing masters that will be completed by May 2016 i am good affiliate marketer in my country so i want to do affiliate marketing for some famous sites ,some even gave me permission to do seeing my background on marketing but i am not doing anything now ,am i eligible to do that , some of... Read more »

Shan Dimitris Potts
Shan Dimitris Potts answered on Feb 5, 2016

You can do as many jobs as you want when you are on OPT, but you will have to report all those jobs and they pay taxes properly. If you get an H1 you can not work for anyone else except the employer who sponsored your H1 visa. All the best.

-Shan Potts

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1 Answer | Asked in Tax Law for Washington on
Q: Tax Lawyer Please 1099-C for S - Corp

We had a S corp small business. Foreclosed on in 2012. We now get a 1099-c for the corp and I do not know what to do with it.

I have checked the IRS web site, not sure where to look for closed business information.

One of the sites mentioned section 108 of the tax code, that... Read more »

Zaher Fallahi
Zaher Fallahi answered on Jan 18, 2016

For handling the canceled debt in an S corporation, have your accountant potentially review (Sec. 108(d)(7)(A)) and Gitlitz, 531 U.S. 206 (2001), in case. The information presented herein is for general purposes only. It is not intended to, and may not be construed as legal, tax or accounting... Read more »

1 Answer | Asked in Tax Law for Washington on
Q: If I have tax credits can I use them to pay for my self employment tax?
Zaher Fallahi
Zaher Fallahi answered on Jan 3, 2016

Generally, a tax credit may reduce all type of taxes, including your SE taxes. The information presented herein is for general purposes only. It is not intended to, and may not be construed as legal, tax or accounting advice. For specific advice, please consult a tax attorney in person. Good luck.... Read more »

1 Answer | Asked in Tax Law for Washington on
Q: Can you help with Schedule C

Recently I was made aware that we should amend our tax returns to add self employment income I made for which I was paid cash..which was about 2k per year..

Those work were random and not consistent so I don't have any license etc. for that...for example 1. I helped my friend to fix... Read more »

Zaher Fallahi
Zaher Fallahi answered on Dec 5, 2014

Use your best estimate with respect to income and expenses to amend your tax returns and the schedule C. Put down “Service/Sales” and “Miscellaneous” for classification. The important thing is that you file the accurate tax returns and pay the accurate tax amount. Good luck. Zaher... Read more »

1 Answer | Asked in Tax Law for Washington on
Q: MY SISTER AND I PURCHASED A HOME TOGETHER. I HAVE ANOTHER SISTER THAT OWES MONEY TO THE IRS, BUT SHE IS NOT LISTED AS AN

IS NOT LISTED AS AN OWNER ON MY MORTGAGE. SHE OWES MONEY TO THE IRS. IF SHE MOVES INTO MY HOME AND SHE BECOMES DELINQUENT ON THE AMOUNT SHE OWES TO THE IRS OR IS UNABLE TO PAY AT ALL,CAN THE IRS COME AFTER ME OR MY SISTER OR MY PROPERTY? THANK YOU

Zaher Fallahi
Zaher Fallahi answered on Nov 30, 2013

So, your sister who has no ownership interest in your property, which is co-owned with another sister, moves to and lives in you property. The IRS cannot come after the property owner; you and the other sister. The IRS can only attach her own assets, not where she live in. Good luck.

1 Answer | Asked in Tax Law for Washington on
Q: If you owe IRS back taxes, do you have to file bankruptcy before it will stop garnishments?
Zaher Fallahi
Zaher Fallahi answered on Nov 19, 2013

It will be advisable to file all non-filed tax returns and depending on your finances, make an offer-in-compromise or ask for an installment plan. Generally, the BK must be filed at least TWO years after the returns filed by TAXPAYER (not the IRS)or at lease 240 days after the IRS assessed the tax... Read more »

2 Answers | Asked in Tax Law for Washington on
Q: Why do we have to pay taxes if there is no law that states so also in 1898 and 1913 the supreme court agreed?
Christopher M. Larson
Christopher M. Larson answered on Dec 27, 2011

The 16th Amendment is the basis for the right to tax. That is why it is an income based tax.

"The Congress shall have power to lay and collect taxes on incomes, from whatever source derived, without apportionment among the several States, and without regard to any census or...
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