Tax
NON FOR PROFIT--- ALLOWED OR AN INUREMENT?
A representative of a 501(c)(3) nonprofit organization, self-identified as Star1441, asks: Is it permissible to use organizational funds to pay $10,000 in funeral expenses for a dying family member, or does this constitute prohibited private benefit (inurement) under the law? This article outlines relevant legal principles, noting the need to distinguish between charitable purposes and private interests, and recommends cautious handling.
Estate Tax
When the decedent passes away, their real estate becomes part of the estate. If the estate administrator (such as a child) sells the property, how should the tax basis be determined? Should it be the stepped-up basis or the carryover of the original basis? This article provides a rigorous interpretation of this issue based on U.S. tax law principles.
1120F filing
A client converted their LLC to a C corporation solely for tax purposes, and the new shareholder is a foreign corporation. If there are no dividends this year, is the foreign shareholder required to file Form 1120-F? The article analyzes filing obligations and compliance steps based on the U.S.-Mexico tax treaty (dividend tax rate of 5% instead of 30%) and withholding agent duties.
Should I issue two 1099 forms for an Independent Contractor that updated their EIN#?
When an independent contractor provides a new EIN, the employer should use the latest valid tax identification number when filing the 2020 Form 1099, without needing to issue two separate forms.
Charitable Tax Contributions
This article provides professional advice on how to compliantly solicit donations from accountants and small businesses when establishing a charity to help veterans with felony records. It clarifies that charitable donation tax deductions do not directly reduce tax bills by the donation amount, but rather indirectly save taxes by lowering taxable income, and provides correct calculation examples. It also emphasizes avoiding conflicts of interest, adhering to professional ethics, and recommends building long-term donor relationships through education and transparent communication.
Tax implication: Intercompany debt-waiver between parent and subsidiary
A U.S. subsidiary (Inc) has a Nordic parent company (A/S) that is bankrupt and now under trustee management. The trustee is considering forgiving the intercompany payable recorded on Inc's books. This article explores the federal income tax impact of such debt forgiveness on Inc and analyzes whether exception rules apply to related-party transactions.
Is step-up basis of property sold within 6 months of the decedent’s demise the sale price?
For a situation where the deceased passed away in January 2021, and the property was inherited by four children and sold in June of the same year, this article analyzes whether the tax basis of the property can be equated to the sale price, and discusses whether selling within six months meets the 'reasonable time' standard.
If a NY online retailer uses a CA manufacturer, do we need to collect CA state tax?
A New York online retailer commissions a California manufacturer to produce and directly ship goods, but the retailer's sales in California do not meet the out-of-state threshold. The core issue is whether the California manufacturer constitutes a sales tax nexus, thereby requiring the retailer to register and collect California sales tax. This article analyzes the tax obligations under this scenario based on existing rules.