Taxizen

The client just set up the foreign corporation in CA in 2006 but the plan was changed so did not do anything. But the state board required the company to file the information return but the company didn't file it since it thought it didn't have to do it because there were no business activity. The state also requires the company to pay couple of hundred dollars for the franchise tax a year when the company files the return. Do you think the company has to pay this fee in this situation? Any CA return preparer's input would be appreciated.

Does it have balance forward feature? Sometimes, clients doesn't pay me on time. I want to send the invoice which shows the balance without searching through the payment history. Any comment on this?

How are you, ATX users? I wonder what kind of billing software you are using. I am looking for a simple and good billing software which tracks account receivable. Would anyone recommend me? Thanks in advance.

I remember that I received ERO approval letter from IRS before tax season every year. Anybody received one?

As I know, the BIG treatment (35% tax rate on the company level) increases the basis of assets. So, there is no ordinary income tax on the same gain. I am not sure about this. Any comment would be appreciated. I thought about limitation of $3,000 per year. In addition to the BIG tax, this is another disadvantage on the seller's side.

I don't have correct data. I just assumed the tax scenarios. That's why I told you I explored the matter beyond the point. Now, we get to the point how we value assets at FMV and who decides it

I agreed that I explored the tax plan beyond the point. However, if there is a loophole in tax matter, it should be corrected by the tax law. As an accountant, I have to inform what the tax consequences are if the taxpayer follows this way or that way. I appreciate your responses up to now.

This is tax plan. It has not happened yet. Is there any comment on this plan?

That is a good point. However, what if he structure assets sales as follows: all assets are sold for zero and goodwill is $50,000 since all assets are depreciated and market value is zero. Is the S corp still subject to built in gain tax?

As I know, separately stated items of income and gains such as interest, dividends, capital gains, rental income, tax emempt income, etc. increases the stcok basis. am I wrong?

Yes, I mixed it. But, by selling all assets, all gains pass through to K-1 which is ordinary income (right?). Prior to liquidating the business, his basis becomes $100,000 (50,000 + 50,000). When he liquidates and receives cash $50,000, then he will end up with $50,000 capital loss (50,000 - $100,000). The original seller saves taxes by selling stock rather than all assets. Good strategy to save taxes right?

The client approached me with this question. He will buy the stock of the company (C corp) with depreciated assets (basis -0-) and change the entity to S corp and will sell the business in two years. Let's assume the stock purchase price is $50,000. When he sells the business for $50,000 by aseets sales, he will have $50,000 of ordinary income (depr recapture). But his basis becomes $50,000 after adjustment ($50,000 stock purchase + $50,000 oridnary income - $50,000 distribution). Since he close the busienss, he will end up with capital loss of $50,000 (0 - $50,000). Net result is 0.00 in the long run. In this scenario, the seller saves taxes on ordinary income (depr recapture), the buyer has no tax effect. Are there any problems in this scenario? Any experience comment is appreciated.

Thank for all your responses. It will help the taxpayers a lot.

The client brought records late. IRS charged $720 for late filing (2008 Form 1065) penalty ($90 x 2 partners x 4 months). The problem is that the business was closed because of slow business this year. And it is a lot of money to the partners. Are there any ways to ask for the waiver of the penalty? Any experiences or comments are appreciated.

My client (she) was divorced couple of years ago. There are two children. According to the divorce decree, each parent can claim each child. Two children have lived with the mother. The ex-husban filed the bankruptcy in 2008 and provided no more child support since then and has not enougn income to claim a child in 2009. In this case, can she claim the child as a dependent since she didn't received support form the ex-husband and against the divorce decree? Any advice would be appreciated.

My computer(HP Vista)'s video card is built onto the motherboard. I figured out I could upgrade it with a new PCI Express 16X. What I wasn't sure about was whether I had to adjust CMOS, BIOS, and so on after I pluged it onto the slot. I like to make sure what I am doing is right. The research makes me believe I can just plug and play it in case of the computer with vista. Any comment would be greatly appreciated.

Thank you for your kindness to show the type of slots. It helps me to figure out.

Sorry, I made an error. My computer's video card doesn't support dual monitors. I heard I can install another graphics card and use both. Or do I have to buy a new graphics card which supports dual monitors?

I deciede to have dual monitors. I remember you guys talked about dual monitors. But, I don't know how to do it. My computer (pentium dual-core, 64bit system)'s video card (Intel® G33/G31 Express Chipset Family) doesn't support dual card. What do I need for dual monitors? Which brand is good for my computer? Any adivice is greatly appreciated.

Does anyone have this problem? When I print the return, I doesn't print it but shows some printing question. It doesn't work. When I reboot the coumpter, the print function works again. But It bothers me whenever it happens. Do you have any idea of how to fix it?

The problem is that the spouse doesn't have the tax id or social security number yet. Of course she can obtain it anyway. However, if IRS asks for the proof that they are married, what can they provide?

Ok. But in case of divorce as I know, the valid divorce decree is needed to file single or head of household. So in case of marriage, isn't the marriage certificate or registration needed to file married filing joint?

What is the ground for filing married joint? Marriage Certificate or facts such as ceremony in front of public, intent, living together or what else? What do we request for the marriage proof? If they were married at foreign country in 2008 and filed the marriage at the court in US in 2009, what is their filing status for 2008? They couldn't register the marriage at the foreign country since the man was a US citizen. Any idea?

I can't create the efile because of this message. I searched for the solution but failed with knowledgebase instruction. Anyone has this problem?

Hi, everyone! Would anyone inform me of E-File starting date? :rolleyes: