The Tax Questions Blog

Archive for August, 2011

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Question: Business investment loss and tax claim question?

-I invested 60K into a new start up business in a form of a loan (have contract and documentations).
-30K has since been paid back
-a total of 50K still owed when you combined interest and loan amount still owed.
-the Company has went out of business

My questions are:
1) can I claim this in my tax? I believe it is for 3K per year and can carry over.
2) If I file jointly, does this 3K become 6K
3) Can I file for the 30K lost in investment or for the total 50K amount still owe to me? This 50K includes interest.
4) What documentation is need in case of an audit on this claim? Is my loan document with the Company CEO sufficient or do I need for documentation that the company went under?

thank you for your help

Answer: Short answers....

1) Yes.
2) No. It is $3000 per year on a joint return and $1500 per year on a separate return.
3) 30K. The $20k in lost interest is not deductible as it was never taxed in the first place. (Note: If you an accrual based tax payer and had be reported the unpaid interest as income, then it is deductible)
4) You must prove that you have exhausted all collection efforts. If the company filed Chap. 7, a copy of the bankruptcy listing your loan would be enough.

See a tax pro.

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Question: i have an outdated california tax return check. how do i contact the state to reissue a new check?

just recently found a piece of mail with my california state tax return check from 2005. the check is outdated and im unable to cash it. how do i contact or who do i contact for a new check to be reissued?

Answer: Not their fault that you didn't cash the check. Probably won't re-issue it but you could contact the California Department of Revenue and ask them what to do.

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Question: Those who shop online: Duties/ Taxes question.....?

So i bought some shirts from threadless.com
my total ended up being around 50 including shipping
but when it arrived at my door, i had to pay an extra 16 $
so what is the deal?
I had to pay for HST which i guess i kinda understand because I live in british columbia
and then i had to pay for duty, which was around 5-6 dollars, so i guess that was because the shirts werent made in usa....
but here is the part i dont get, i had to pay an extra 5 $ to canada post just for shipping and handling... this is really confusing and unfair. i mean i already paid 10 dollars for shipping and now they are charging me an extra 5, and the stuff didnt come for like a month
i heard there are ways to avoid duties.... how?
also. i bought stuff from etsy.com before and never had to pay for tax or duty, can someone explain
thanks a bunch

Answer: As far as I know, tax & duty is based on the value of the items, where they come from, whether they are considered taxable and what declarations are made on the customs forms. I sell small things on etsy and ship to Canada all the time. But the items don't cost much and don't weigh much, so I doubt that there is much (if any) duty or tax on them. If what you bought from etsy falls into that category, that might be why you've not had to pay anything so far. As for the extra $5, I can only assume that whoever mailed the package did not put enough postage on it, so there was still postage due. That is poor shipping on the seller's part.

Here is the list of duties that might give you an idea of what you paid and why:

http://www.cbsa-asfc.gc.ca/trade-commerce/tariff-tarif/2010/01-99/tblmod-eng.html

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