The Tax Questions Blog

Archive for November, 2009

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Unsuspecting commercial investors are driving to the bank to turn in their keys on projects that did not workout as planned and waking up the following year with an unexpected tax headache. The discharge of the loan can result in a capital gains tax liability. Not only did the clients lose whatever equity they had in the property, but they also face capital gains tax liability for simply how they transferred the property to the bank!

Individuals confuse the property's tax impacts with the property's economics. However, these two calculations are different. For tax purposes gain or loss equals the difference between the transfer price to the bank and the adjusted basis.

Thus, if you bought a property in 1987 for 700k (your cost basis) and it has been depreciated and now has an adjusted basis of $400K, and it is foreclosed with a 950k loan, this transfer without a 1031 exchange results in a taxable gain of $550K, i.e. $950k transfer price minus the $400K adjusted basis. ES Group is a Qualified Intermediary pursuant to Internal Revenue Code §1031.

ES Group corresponds with each client's attorney and/or tax advisor and forwards legal documentation, as requested, so that the Internal Revenue Code §1031 rules and regulations are thoroughly understood. ES Group prepares the necessary documentation- Exchange Agreements, Assignment Agreements, Notice of Assignments, and oversees each closing to assist in proper §1031 procedures. ES Group provides guidance, information and critical timelines throughout the entire exchange.

ES Group is a Qualified Intermediary pursuant to Internal Revenue Code §1031. ES Group corresponds with each client's attorney and/or tax advisor and forwards legal documentation, as requested, so that the Internal Revenue Code §1031 rules and regulations are thoroughly understood. ES Group prepares the necessary documentation- Exchange Agreements, Assignment Agreements, Notice of Assignments, and oversees each closing to assist in proper §1031 procedures. ES Group provides guidance, information and critical timelines throughout the entire exchange.

Intermediate Accounting, Volume 2, Chapters 15-25, Problem Solving Survival Guide, 10th Edition $40.00 Over thirty years and ten best-selling editions, Kieso and Weygandt have built a reputation for accuracy and comprehensiveness. The latest edition, a personal milestone for the authors maintains the qualities for which previous editions have been recognized....

Firm Capital Mortgage Investment Trust Announces Record Results

TORONTO, ONTARIO--(Marketwire - 02/24/10) - Firm Capital Mortgage Investment Trust (the "Trust") (TSX: FC.UN - News ), today released its financial statements for the fiscal year ended December 31, 2009. EARNINGS & RETURN ON EQUITY Net earnings for the year ended December 31, 2009 totaled $14,453,196 compared to $14,700,534 for the year ended December 31, 2008. For the fourth quarter ended ...

Question: What does it mean to work under a W2 contract as opposed to 1099?

In my job search, I am seeing a lot of references to W2 contracts and 1099 contracts. I assume W2 means working for a contracting company and 1099 is as an independent contractor, but I am not real sure. Could someone explain the differences?

Answer: You are correct.
W-2 means:
1. Social security, medicare, and income tax are withheld
2. The company pays 1/2 of social security and medicare and must carry workmen's compensation coverage
3. Your earnings count towards eligibility for future unemployment compensation
4. If you do not get paid, the government may be able to assist for free
5. You are protected by FMLA, COBRA, etc., laws.

1099 means:
1. No taxes are withheld
2. You must pay estimated taxes and self-employment taxes
3. Your earnings do not count towards eligibility for future unemployment compensation
4. If you do not get paid, it is a breach of contract issue rather than an unpaid wage issue, so you have to sue
5. If you are injuried, compensation for your injury is much less likely.
6. You are not protected by FMLA, COBRA, etc., laws.

Lake preservation board releases financial review

The Lake Allatoona Preservation Authority released a financial review Thursday that claims several discrepancies within the organization's financial records, maintained by former General Manager Ro...

Krazie316 Pwned by Reverend Al Sharpton

Question: What is the IRS process,guidelines, consequences for Australian Nationals investing in US property?

More concerned w/ double taxation. I know there is a Aus/US tax treaty. If we rent out the place and make $3000-$5000/yr after the mortgage is that amount even taxable? I'm thinking we'll just be taxed on the capital gains when we sell it in 5 years.

Answer: You have two choices.

You can pay 30% in gross rents (not after the mortgage) and then just capital gains.

Or you can elect to be taxed on rental property like an American, deduct interest, properrty taxes, repairs and depreciation (still not "after the mortgage"), but when you sell, you will have the depreciation recaptured.

http://www.irs.gov/businesses/small/international/article/0,,id=129631,00.html

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International Succession $231.89 Increasing numbers of people have connections with one country, but live and work in another, frequently owning property or investments in several countries. As such, international aspects arise in an increasing number of estates. Different countries may have separate arrangements for ownership, taxation, and succession. International Succession equips practitioners with the information necessary ...

The Corporate Guide to Expatriate Employment: An Employer's Guide to Deploying and Managing Internationally Mobile Staff $94.13 The management of internationally mobile employees in today's economy often requires greater flexibility than has been found in traditional expatriate programs, and is frequently project-driven rather than being reliant on existing policy and infrastructure. The Corporate Guide to Expatriate Employment is a guide to deploying staff in short- to medium-term assignments working overseas, managing...

Long, slow return to growth

Big Western economies are unlikely to default on debt. But we must plan to live with their economic difficulties.

Reduce Your Taxable Income