Oregon Tax Legal Questions

For federal income tax purposes, an LLC may have one or more Members. Anyone who is a Member of the LLC cannot be an employee of the LLC. If your Husband is not a Member of the LLC, he could be an employee if he performs services for the LLC under your direction. As an LLC Member you may choose to opt out of Worker's Compensation insurance coverage. If your Husband becomes an employee of the LLC, he should be covered by Workman's Compensation. Your Husband cannot be both a member and an Employee.... Read More

Nothing in the law prohibits an owner of an interest in an LLC from being a paid employee. You may want to consult with a business lawyer about how best to structure the ownership and management of the LLC, so that it provides you with the best tax situation and it complies with your desires as to how company decisions should be made. In particular, you need to be concerned about whether community property is being used to fund the company, and how that might affect the LLC's ownership if it is not held 50-50 between you and your husband.... Read More

You use the term "business partner." Does this mean that you have a Partnership Agreement? How do you divide up profits or losses? Is that written down? Did you have an attorney draft the Partnership Agreement? How do you report your income on your tax returns? You also write that he "changed our corporation name." Are you a corporation, not a partnership? Who owns the stock of your corporation? Are you an LLC? A multi-member LLC is taxed either as a corporation or a partnership. If a partnership, there needs to be a partnership agreement. The question you ask is a relatively small issue, I think. The answer is yes, two corporations can enter into a Partnership Agreement, just as two individuals can. The bigger issue is what is your "partner" trying to accomplish by "incorporating himself only?" Has he changed any bank account signature authorizations? Who keeps the books? Do you still have access to them? Is your "partner" really trying to cut you out of the business? You should see an attorney immediately to discuss these and perhaps many more questions. The attorney should not be one whom your partner uses or the attorney who has had anything to do with your business.... Read More

You have not provided enough facts to determine if any capital gains taxes are due. It does not depend on the cost of your new home compared to your old home. It depends on how much of a gain you made on the sale of your old home, how long you lived in it and whether you were married or single at the date of the sale.... Read More

No, you can not order the tax return transcript for your Mother, even if you have her consent. Only she can do it. It would take her less than 15 minutes to order the transcript, which can be done by phone or on line. She must do it. If she has the time to talk to you, then she should be able to find the time to talk to the IRS and order the transcript.... Read More

You have no obligation to assume the prior tax liability, and can structure your transaction to ensure that you do not take it on. You need to be very careful in structuring the transaction, however. A good business attorney will be able to guide you in this process, so that there is no question as to this issue.... Read More

A sub-chapter S corporation is a flow through entity. This means that no tax is paid at the corporate level. All income passes directly to the shareholders as dividend income. The regular corporation, also known as a C corporation, pays individual income tax. If the corporation pays dividends to shareholders, the shareholders pay taxes on dividend income. The money is double taxed in a C corporation. Hearing this, many people would say why would anyone choose a C corporation? The reason is there are many disadvantages and restrictions that come with the S corporation election. You should consult with an experienced attorney to decide what is best in your particular case.... Read More

I am assuming that you are issued a K-1 for this partnership. If so, then the K-1 (and your partnership agreement) should indicate your percentage interest in the profit, loss, and capital of the partnership. If there are any contracts or agreements which list you as a sole proprietor, then you should have this changed. Although the owner of the mall property which you are leasing may be aware of your business's status as a partnership, and although they may be aware that you are generally responsible for only X% of the business losses, it's still completely possible for one partner to sign a lease and take on all responsibility for that particular agreement. The owner of the property has no idea how your partnership agreement (assuming one exists) is worded, and so although you may technically only share X% of overall losses, you may very well have a clause in a partnership agreement which indicates that you share 100% of all losses/debts related to lease properties. Ultimately, it's best to have all agreements correspond with one another, as opposed to having a lease agreement which contradicts your partnership agreement. Although you may be able to get things straightened out should anything occur, you would have to do so in a court of law, which will take time and money. My advice would be to get the lease agreement corrected now so as to prevent problems in the future.... Read More

Yes, if the for profit activity is not too large in comparison to the charitable activities. The share of profits allocable to the charity would result in unrelated business taxable income to the charity and it would have to pay taxes on them. If the for profit venture were a C corporation, the charity would not be taxed on dividends paid to it, but the corporation would pay tax on that income.... Read More

The divorce decree is binding as to between you and your ex-wife. However if you filed a joint return and have not been granted release as an innocent spouse, the provisions of the divorce decree are not binding on the IRS. It can collect from either tax payer if a joint return was filed. To see if the innocent spouse defense applies to you, go to www.irs.gov. At the top right, enter "Innocent spouse" in the search box and read the links that come up. Did this information help answer your question(s)? Details and context often affect the validity and usefulness of an answer that is based on a general statement of the law. You may need to consult directly with an attorney and provide additional information in order to get the best answer.... Read More

The corporation will pay taxes in all states in which it does business. Each state has its own formula for how to apportion income among the states usually based on a weighting of where sales take place (usually the most important factor), where the employees are located, and where the corporation owns property. Your salary from the C corporation will be taxed in the state in which you work. If you live in a different state, you also will be taxed in that state, but will get a credit for taxes paid in the state in which you work.... Read More

If the church was organized as a business entity (LLC, S Corporation, C Corporation, etc.), then the entity will be liable for any tax debt. Thus, you will not be liable for the debt yourself. However, both federal and state revenue agencies can issue an assessment against individuals who were responsible for remitting taxes on behalf of the business entity. If your husband is personally assessed for the business's tax debts, then a revenue agency may attempt to include you as liable to the debt if you filed jointly while married. Ultimately, you should be able to easily avoid any tax liability, as they should not attempt to personally assess you simply because your husband was personally assessed as the responsible business owner, but sometimes mistakes are made and their automated system can "rope in" the spouse for any and all personal assessments. If, however, the church was not organized as a business entity, but rather your husband was just running it as an official DBA (doing business as), and thus reporting the business income on his personal returns, then you will initially be held liable for the tax debt as well. This is due to the fact that, as a spouse filing jointly, you are jointly responsible for all taxes which are assessed based upon your personal return. Even if this were the case, you would likely be able to have the debt removed from your name by filing for innocent spouse relief, as you had no involvement with the business and were not responsible for remitting any taxes due. As far as the payment of taxes, I can't give you an accurate answer without more information. The types and deadlines for taxes due will depend upon whether a business entity is in existence, what type of business entity is in existence, the nature of the work being done by individuals, whether those individuals can be classified as employees or independent contractors, etc.... Read More