When Does a Business Activity Begin – By John R. Bullis, CPA

Kim Pilant John's Articles

Tax Code Section 195 covers when a business begins and when the expenses are deductible. Mr. H. Samadi claimed business driving expenses in 2013 and 2014 in his “real estate sales” business. He did not make any commissions as a licensed real estate salesman in years 2013 and 2014. He did drive from his brother’s home in Marina to Sacramento …

Property Manage Held to be Employee – By John R. Bullis

Kim Pilant John's Articles

In a Tax Court Memo Decision, the property manager of a 60 unit apartment complex was found to be an employee, not an independent contractor. The owner, Hampton Software Development LLC (Hampton) did not issue form 1099-MISC or any other 1099 form to the manager. Mr. Herndon, for the $2,000 per month he was paid. The court looked at various …

Net Investment Income Tax – By John R. Bullis

Kim Pilant John's Articles

It is bad enough to pay income tax but Form 8960, Net Investment Income Tax for Individuals, Estates and Trust is an additional amount to pay in certain circumstances. That form computes the extra 3.8% Medicare tax that applies if the “passive income from interest, dividends, annuities, and some rental income, royalties, some partnership, S corporation and trust income that …

New Family Leave Credit for Businesses – By Kelly J. Bullis

Kim Pilant Kelly's Articles

As an employer, don’t you just grind your teeth when an employee calls in sick and you suspect that they are just out skiing or doing something fun while using being sick as an excuse to get out of work? Are you one of those many generous employers who actually pays “Sick Leave,” even to the “Hooky From Work” folks? …

Do You Need a Trust or Just a Will? – By John R. Bullis

Kim Pilant John's Articles

Each person has an estate. It can be large or small. It includes all of your personal property, money, bank accounts, retirement accounts, insurance policies and real estate that you own. A Will is one way to direct how what you own is to go at your death. If you don’t have a Will or a Trust then the items …

Refunds Owed to Veterans on Disability Severance Overpayments – By John R. Bullis

Kim Pilant John's Articles

IRS Information Release 2018-148 of July 11, 2018 advised certain (some) veterans who received disability severance payments after Jan. 17, 1991 about possible refunds. If the veteran paid tax (by mistake) on the payment, then a refund can be obtained by filing an Amended Return (form 1040X). Usually refunds for Amended Returns are only allowed for the recent three years. …

Cancellation of Debt is Taxable if Not Insolvent – By John R. Bullis

Kim Pilant John's Articles

Mr. and Mrs. Hamilton got student loans to finance the education of their adult son (Andrew). In 2008 Mr. Hamilton was permanently disabled due to a back injury. In June of 2011 he asked to have the loans discharged (cancelled). In 2011 two lenders did cancel loans totaling $158,511. In 2011 Mr. Hamilton had some “erratic spending behavior” so Mrs. …

Pastor Charged with Selling Worthless Bonds – By John R. Bullis

Kim Pilant John's Articles

Recently a federal grand jury gave a 13-count indictment accusing Rev. Kirbyjon H. Caldwell, age 64, and Gregory Alan Smith, age 55, of selling more than $1 million of worthless Chinese bonds. The grand jury indictment indicated the Chinese bonds were sold to 29 vulnerable and elderly investors. It alleged the two were guilty of wire fraud, money laundering and …