Michigan Tax Legal Questions

Commonly the exemption for dependent children is dealt with in the divorce decree, or in the custody and support decree directly. If it is not the IRS has its rules as to which party would be entitled. I would suggest you see an accountant or tax attorney with your various court papers and disclose all of the facts to get a knowledgeable opinion.... Read Answer

Life insurance proceeds are not subject to Income Tax. There is no Federal Inheritance Tax, but rather a Federal Estate Tax. So wether or not the insurance proceeds are taxable depends on several factors; the size of the taxable estate, and wether or not the insurance police is includable in the taxable estate. That again depends on several factors, most importantly who owned the policy and who the named beneficary was. If the the policy is includable in the estate and the estate is large enough to incur estate tax liability, the estate will have to pay tax on the insurance proceeds. Generally speaking the beneficiary is only liable for the tax (if any) under specific circumstances ... Read Answer

As there appears to have been nothing beyond the agreement it would be wise to sit with a tax attorney and accountant to see how the accounting should be done. Legally it would appear that the employer of x, it it was paying a the person as a w-2 employee, is the owner of the equity in y. That, however, may not be the optimal ownership structure.... Read Answer

Are you filing jointly? If you are yes (unless someone else is entitled to the exemptions, they only can be claimed by one taxpayer). If you are confused you should see a professional, doing it right the first time with the IRS is paramount, otherwise it can take months or years to straighten it out.... Read Answer

If you and your wife together provided a majority of the support for the two children, then she can claim them if you agree. Check to be sure that you won't save money by filing a joint return; in most cases that is beneficial. On the other hand, even if you have reasons to file separate returns, you can switch to joint anytime within three yuears of the due date for the returns. Therefore, for example, even if you file separate for 2012, you could switch in early April 2016, to get a refund.... Read Answer

You will need to review the escrow instructions to see what procedures are set up in case of disagreement between the parties to the escrow. I also would contact an attorney to help you with writing a letter, demanding the return of property held in escrow, and if necessary, demanding compensation for any damages you have suffered. In a worst case scenario, you would have to file a lawsuit or arbitration proceeding to recover your property. There are many litigation lawyers on LawQA who could help you.... Read Answer

Gift to your sister such as internet connectivity, etc. should not have any affect on her disability payments; it's not earned income (such as she would receive if she were employed). There are stringent requirements on Social Security Disability with regard to income from work (i.e., gainful employment) but there is no prohibition against receiving gifts. The exemption from gift tax is $13,000 per year from an individual and each person can give gifts of this much without filing a gift tax return.... Read Answer

Documents can, and should be reviewed. As there is no means to determine the length or complexity of the document or the amount of counseling regarding options will be required the charge would be $300 per hour for the use of my 35 yrs of experience. There is no other rational answer to your query. Select an attorney with wisdom and experience, then you will get you money's worth.... Read Answer

A gift tax return should be filed (Form 709). The return is due April 15 in the year following the year in which the gift was made. It's doubtful that any gift tax would be owing. The top gift tax rate this year is 35%. Whether a tax is owed will depend in part on how much in gifts have been previously made by the don't (person giving).... Read Answer

There should be some kind of statement that says whether there is a profit or loss. I would contact the tax accountant to get a copy of the papers he is using to say there is a profit, and then go to the property manager and/or persons who control the investment. The law does not require a distribution just because there is a profit, though there may be something in the documents controlling your mother's investment that gives her distribution rights. This documentation should be reviewed.... Read Answer

Technically, there is no assumption of the debt by the new spouse. However, California is a community property state. As such, the IRS can seek to recover the separate tax burden of one spouse from whatever community assets the couple obtains after their marriage. A properly drawn prenuptial agreement may help here, so long as it is not simply a fraudulent conveyance intended to unfairly divert assets from creditors. Much will depend on the assets and income of the two parties. I would recommend that you see a family law lawyer who specializes in prenuptial agreements to help you with this.... Read Answer

The unemployment compensation should be reported in the "old" state. You should only have to pay tax on income earned after moving into the new state. You do need to check the "new" state's income tax law if the state has an income tax - there are about 13 or 14 states that don't tax income - there are at least three states that will tax income from any where you get it around the world:... Read Answer