Discussion:What to do/How to handle?
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| Revision as of 06:41, 5 April 2008 Natalie (Talk | contribs) ($800, now I reme) ← Previous diff |
Revision as of 20:45, 5 April 2008 Inagpurwala (Talk | contribs) (Katie: Yes that) Next diff → |
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| {{ForumReplyPost|UserID=Natalie|Date=April 5, 2008|Text=$800, now I remember. I only did a few of those a long time ago.}} | {{ForumReplyPost|UserID=Natalie|Date=April 5, 2008|Text=$800, now I remember. I only did a few of those a long time ago.}} | ||
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| + | {{ForumReplyPost|UserID=Inagpurwala|Date=5 April 2008|Text=Katie: Yes that what I told them that it does not matter if LLC is in NV. They still need to pay tax in CA for all the income. | ||
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| + | The TinCook: Thanks for the link. Got the information what I was looking for! | ||
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| + | Upon further probing them they told me that a bank did the filing of SS4 and other documents for them (no laughs.........). | ||
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| + | I am leaning toward filing Sch C (as suggested by many and my CPA friend). Which leads to a another question: do I have to file for them Form 8832 to indicate filing of Sch C? eventhough it might be late. | ||
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| + | Thanks | ||
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| + | Ishaq | ||
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| + | }} | ||
Revision as of 20:45, 5 April 2008
Discussion Forum Index --> Basic Tax Questions --> What to do/How to handle?
Discussion Forum Index --> Tax Questions --> What to do/How to handle?
Inagpurwala (talk|edits) said: | 3 April 2008 |
| Client started Show Promoter business Jan 1st, 2007. Filed SS4 over the phone with IRS agent. Client does not know the answer to the questions asked by the IRS agent to complete the form and assign EIN #.
Points provided to me by client: Husband & Wife are partners (50/50) Naveda address (client is resident of California) Name contains "LLC" but they do not know the meaning of it. I told them that LLC means "Limited Liability Company" and gave breif defination. Asked them if they filed the charter with then state defining Limited Liability. Answer - no idea. My question: How to find the status: is it LLC or General Partnership? Since both (husband and wife) are resident of CA, state will tax on worldwide income - right? I am preparing their 1040 for last four years. They did not ask me any question before starting the business! I have completed Partnership return and have it reviewed by a CPA. According to him it is fine except the issue of "LLC." (Kevin: Please take it easy and do not blast at me!!!!!!) Thanks Ishaq | |
| 4 April 2008 | |
| I have no idea of what a show promoter business is really; how much liability is attached to it. Anyway, the LLC is disregarded. H-W should be able to file a Scd. C for the 2007 business, and not a 1065. Do they really need an EIN? With Scd. C it would not be out of the question just to use the Social. However, the EIN would be preferable.
These people sound pretty disorganized. You sure you want them as clients? At any rate, lawyers are not nearly as busy as tax people right now. Why not plan to extend 2007 with their permission (remember, extension to file is not extension to pay, so include good faith pmt.), and tell them you can't help them unless they sit down with a small business lawyer who can help translate what mess they might have made in NV, and get back with you. By the way, DON'T have them sit down with the GUMBA that set up that NV "entity" for them. Tell them, make them, tell the lawyer to KEEP IT SIMPLE, now and forever. Your goal is not to file a 1065 unless it's absolutely necessary. | |
| 4 April 2008 | |
| Now, if Kevin will step in, it would be great, because I am of the opinion that I think he has expressed that two Scd. C's should be attached so both H and W get credit for their portion of SE tax (social security benefits). OR take a look at 2007 instructions for Scd. C for how to report respective shares. | |
TheTinCook (talk|edits) said: | 4 April 2008 |
| You might want to do a search on the NV Secretary of State website to see if you find them. It would show if they are an LLC. | |
TheTinCook (talk|edits) said: | 4 April 2008 |
| Only if the client bothered to, but that's not really the purpose of those incorporate in NV scams. Also, the entity search in CA is much less detailed and more limited (at least the free internet search). | |
| 4 April 2008 | |
| Isn't there some UnGodly yearly fee to have an LLC in Cali.? Perhaps that's why they took the NV bait, but might not a registration in CA as a "foreign entity" still be required? Anyway, these people didn't need this LLC to begin with, IMHO, NV or not. Since they have it, still try to Scd. C them; unless and until they can prove they will treat a business like a business. | |
| 4 April 2008 | |
| Oh, c'mon guys, I've said this over and over. If the members of an LLC are CA residents, and they conduct ANY BUSINESS AT ALL in California on behalf of the LLC (for example, if they ever write a check in CA to pay an LLC bill), THE LLC IS DOING BUSINESS IN CA AND IS SUBJECT TO THE TAX AND FEE. It does not matter where the LLC is organized or its property is located. Since this one was organized in NV by CA residents, I'll bet it's not registered in CA. That doesn't mean it isn't subject to the minimum tax and fee.
The fee for years beginning in 2007 is based on "total income" from California sources. You calculate this by applying the rules for assigning gross receipts to the California numerator of the sales factor in the apportionment formula. In this case, as Crow says, the LLC is probably unnecessary. A good liability policy would probably be better protection and might be cheaper. | |
| 5 April 2008 | |
| And in CA they file the 568, even if filing a Sch C and pay $800 for the privelege of being an LLC in CA. There's even a box to check if you are not filing a 1065 and are just using the 568 to pay the $800. And CA is really really good at determining ways to find people that should be paying taxes to them and then fining heavily if they haven't. And we're broke now, so I'm sure the effort will ramp up! | |
| April 5, 2008 | |
| $800, now I remember. I only did a few of those a long time ago. | |
Inagpurwala (talk|edits) said: | 5 April 2008 |
| Katie: Yes that what I told them that it does not matter if LLC is in NV. They still need to pay tax in CA for all the income.
The TinCook: Thanks for the link. Got the information what I was looking for! Upon further probing them they told me that a bank did the filing of SS4 and other documents for them (no laughs.........). I am leaning toward filing Sch C (as suggested by many and my CPA friend). Which leads to a another question: do I have to file for them Form 8832 to indicate filing of Sch C? eventhough it might be late. Thanks Ishaq | |
