Who has to pay gift tax – donor or recipient?
- David Greene
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That is a good question, with an easy answer. The receiver of the gift does not pay the gift tax. The donor pays the tax. However, anyone can give an individual a gift of money, property or any other asset…
When can an Offer in Compromise be returned without considering the merits?
- David Greene
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An Offer can be “returned,” i.e. not even considered, for technical reasons. This does not mean it was denied. When an Offer is first received, it must pass several tests to be considered. If it fails these technical requirements, it…
How Are Taxes Handled In Probate?
- David Greene
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Two kinds of taxes can arise during probate. One is the estate tax which does not come into play unless the estate is worth more than $11 million. These taxes, which can be at a rate of 50% or more,…
Can one pay more on an Installment Agreement than the negotiated amount?
- David Greene
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You are on the right track wanting to pay off the IRS sooner, for by doing so you pay off the Agreement early and will save interest. You do not have to renegotiate a new Installlment Agreement, although you can…
Should an IRA or 401k be transferred into a trust?
- David Greene
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It is definitely not a good idea! If you put your IRA or other qualified retirement account into your Living Trust, the IRS will consider it as a distribution and you will be taxed on the entire amount immediately. There…
What bequests should not be put in a will?
- David Greene
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Thank you for your question. There are several items you do not want to put in your will. Here are some: (1) Any real estate in which title is held in joint tenancy with right of survivorship, (2) bank acccounts…
Can the IRS seize and sell jointly owned property?
- David Greene
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Unfortunately they can in certain circumstances. There is a recent case that ended up going to the Seventh Circuit Court of Appeals. In that situation a father and son owned the land jointly and the father owed the tax. The…
How have child tax credit ruleds changed?
- David Greene
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Thank you for your question. There have been quite a few changes to the child tax credit. Here are a few: (1) The credit is higher than last year. (2) There are now automatic advance payments of one-half of your…
Are offshore credit cards illegal?
- David Greene
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Americans can do business in any country as long as such business is allowed by that country. Therefore, having an offshore credit card is not illegal. However, most of these cards are designed to evade income tax and that is…
What is a hobby loss vs. a deductible business loss?
- David Greene
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A hobby loss is not deductible, but a business loss is. An IRS audit is usually where the question arises: Is this “business” really a business or merely a hobby which continuously loses money? The IRS looks at several factors…