24. June 2010 by admin.

EFFECTIVE IMMEDIATELY!  The Division of Corporations no longer has authority to waive the $400 late fee for annual reports filed after May 1st. The provision for waiver in s. 607.193(2)(b),F.S. was repealed during the 2010 Legislative Session. All business entities except non-profit corporations must pay the late fee if the annual report is filed after May 1st

Posted in International Taxation, Sub S Corporations, LLC's, General | 1 Comment »

23. June 2010 by admin.

If a spouse had not owned a home within the past three years, could that spouse qualify as a first-time homebuyer for the credit even though the wife would not qualify?

No. The purchase date determines whether a taxpayer is a first-time homebuyer. Since the wife had ownership interest in a principal residence within the prior three years, neither taxpayer may take the first-time homebuyer credit. Section 36(c)(1) of the Internal Revenue Code requires that the taxpayer and the taxpayer’s spouse not have an ownership interest in a principal residence within the prior three years from the date of purchase. The husband may not take the credit even if he filed on a separate return.

Posted in Income Tax | 1 Comment »

21. June 2010 by admin.

If you gave money to a homeless person or anyone needing assistance, thank you but that is not a 501(c)(3) deductible charitable organization.  Nice gesture but no deduction.

Posted in Income Tax | No Comments »

21. June 2010 by admin.

How do you prove a deduction?

First, a cancelled check, credit card charge or cash receipt.  BUT, that only proves you paid for something.

Second, an invoice showing what was paid. 

For example, you have a cancelled check to an insurance company.  It only proves you paid for something.  You might have paid your Grandmothers insurance policy instead of business liability.  So it takes the invoice AND proof of payment.

Every deduction it requires PROOF of PAYMENT and PROOF of the expense, meaning an invoice.

Posted in Payroll Tax, International Taxation, Sub S Corporations, LLC's, Income Tax | 1 Comment »

1. June 2010 by admin.

Recourse vs. Nonrecourse

When a debt is canceled by any means (deed in lieu of, foreclosure, short sale, cancellation of debt), the tax impact depends on the type of debt.

Debt for which the borrower is personally liable is “recourse debt,” all other debt is “nonrecourse debt.”

RECOURSE debt holds the borrower personally liable for any unsatisfied amount owed when the property is surrended (by any means).

If a lender forecloses on property subject to recourse debt, and cancels the portion in excess of the fair market value (FMV), the canceled part is “ordinary income from cancellation of indebtedness”.  That figure must be included in gross income unless it qualifies for an exception of exclusion (personal residence, Mortgage Debt Relief Act, bankruptcy or insolvency).

Additionally taxpayer may realize a gain or loss on the disposition of the property by the difference between the tax basis and the FMV at the time of foreclosure.

NONRECOURSE debt is satisfied by the surrender of the property regardless of FMV.  Borrower is not personally liable for the debt.

If nonrecourse debt is abandoned, foreclosed, short sale or repossessed, it is treated as a sale.  The usual method to determine gain or loss is used.  The balance of the nonrecourse debt at the time of the disposition is treated as the amount realized (in other words you actually sold it for the total debt of the property, not just what a short sale closing document may indicate).

Posted in International Taxation, Sub S Corporations, LLC's, Income Tax, General | 1 Comment »