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Suzanne Alexandra Ascher

Suzanne Ascher’s Answers

17 total


  • Am I responsible for my deceased husbands unpaid taxes?

    My husband died 4 days ago. He was a small business owner of which I had nothing to do with. It was between him and his father. I am pretty sure he did not pay the payroll taxes or even personal taxes for this year. Will I be responsible for those...

    Suzanne’s Answer

    My condolences to you on the loss of your spouse.

    In addition to the answers given to you by the other attorneys above, I understand that the federal and state/local government to who his business may have owed unpaid payroll taxes can hold not only his business liable but also -- if his small business to which you referred was an entity such as a corporation -- the government can pierce the limited liability of the entity and hold your deceased husband (and therefore his estate) personally liable.

    Payroll taxes are a very serious matter as they are considered "trust fund taxes" as essentially your husband's business, assuming it had employees and incurred these liabilities, was withholding the social security/medicare taxes, along with income taxes, of the employees from their paychecks and therefore required to timely remit these payments to the government and timely file payroll tax returns.

    In the end, if his estate becomes liable for payroll taxes, they can reduce any equity in whatever assets the estate has to distribute to its beneficiaries, which I assume you are one of or may be the only beneficiary as surviving spouse.

    Another question you need to have answered is who are the beneficiaries of your husband's estate? Was his father -- your father in law -- a beneficiary? Who is to inherit the business? You need to consult an attorney on this matter.

    As far as income taxes and income tax returns are concerned, there is joint and several liability for the spouses who sign and file a married filing joint return -- regardless which spouse is the source of the items reported or required to be reported on the tax returns. If there are unpaid income taxes from any married filing joint income tax returns filed previously, your husband's estate is liable as well as you -- unless you qualify and claim innocent spouse relief to reduce your personal burden as mentioned above. There needs to be a final income tax return for your husband through his date of death to report any income (including business income) for this year --- 2011. You may want to consider whether there will be two married separate income tax returns for tax year 2011 -- one for yourself and one for your husband through his date of death, or a married filing joint tax return. If you file as married filing separate, you are responsible for your own income tax return for the tax year for which it is filed and thus legally cannot be held responsible through the joint and several liability of a married filing joint return.

    Your husband's estate may have estate tax and income tax obligations also. Your husband's estate may require a formal court appointment of an executor (of a will) or administrator (without a will) of his estate to handle any tax obligation in addition to handling any other open matters.

    In the end, please consult both a tax attorney and an estate attorney to deal with these issues to determine what exposure you may personally have for income tax returns and the impact on the assets of your husband's estate, if any, from his income tax obligations and the payroll tax obligations of his small business.

    Again, so sorry for your loss of your husband.

    Suzanne Alexanda Ascher, Esq., CPA, Tax LL.M.

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  • Tax deductions for home improvements to sell house

    If I complete home improvements (roof., Paint) in order to help sell my house, can I deduct these expenses on my taxes. I am moving for a job if that makes a difference.

    Suzanne’s Answer

    I agree with the above.

    Also, I assume that your home has been used by you and your spouse entirely as a primary residence and would meet the criteria for the primary residence exclusions of $250,000 (single)/$500,000(married) of capital gain as already explained in the other attorney's answers.

    Internal Revenue Code 121 and its applicable Treasury Regulation sections address the primary residence exclusion for capital gains on the sale of primary residences.

    However, in the event that you have used part of your home as a rental property in which you collected rent from a tenant, hopefully you have reported this income and related expenses on Schedule E, page 1, of your IRS form 1040 individual income tax return. Further, if you have rented part of your home, this will have an impact to how much of the primary residence exclusion you may be entitled to any capital gain calculated upon the sale of your home. You may have income tax to pay on the rental portion of your home. Also, are any of these "home improvements" you are considering making impacting the rental portion of the home, therefore requiring an allocation of those disbursements to the primary residence portion and rental portion?

    It is a very common practice for people to have rented a portion of their home to a tenant at some point and, if you have done so, please consult your tax attorney and accountant to determine the income tax impact when you sell your home, taking into consideration your new disbursements you plan to make to help make the house more attractive to potential buyers.

    All best and good luck on the sale of your home.

    Suzanne Alexandra Ascher, Esq., CPA, Tax LL.M.

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  • I have inherited business property. Several years of back taxes are due. Should I hire a tax attorney or a real estate attorney?

    This property has been damaged in a fire and was appraised at a higher rate than it should have been for several years.

    Suzanne’s Answer

    • Selected as best answer

    I agree with the attorneys above.

    When you do consult with an attorney, it is a good idea to also ask him or her whether you may be entitled to some sort of reduction in the bill that is owed, for example, getting an abatement of penalties which are calculated upon the unpaid taxes and interest. Sometimes, depending on the taxpayer's situation and type of tax owed, a written letter fully explaining the circumstances, along with supporting documentation, as to why past taxes were not paid previously and, if applicable, why any tax returns were not filed, may establish a foundation upon which penalties may be forgiven by the government.

    Don't assume that penalty relief is not available. Ask your attorney if -- based on the tax type involved and the jurisdiction involved -- as to whether penalty abatement relief is available based on the facts and circumstances involved.

    The attorney should also consider whether or not any other forms of reduction of the outstanding bill is available, for example, through an offer in compromise (OIC) program. An offer in compromise program may allow a taxpayer an opportunity to reduce the total outstanding bill. Throught this program, the overall outstanding bill of taxes, interest, and penalties may be eligible for reduction due to a financial hardship and other qualifying criteria that clearly demonstrates that full payment of the entire liability either through a one time lump sum payment or through an installment agreement arrangement is impossible. Again, depending on the tax type, jurisdiction involved, and the facts and circumstances of your case, the OIC program may be available and, if so, you and your attorney should analyze whether it applies to your situation.

    Good luck.

    All best,

    Suzanne Alexandra Ascher, Esq., CPA, Tax LL.M.

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  • Do I need to pay decedent’s income tax?

    My mother passed away in May of 2010. Her home was in a trust (may have had both of our names on it) and I am the beneficiary. Before her death there was an IRA to Roth IRA conversion. I am the beneficiary of the Roth IRA and took possession in De...

    Suzanne’s Answer

    I concur and agree with my fellow attorneys.

    Provided that the conversation from the IRA (assuming traditional IRA or the like) to ROTH IRA is upheld, expect income taxes to be owed.

    Please immediately consult your tax attorney, accountant, tax advisor, etc. to determine the proprer amount of income tax to be paid if you have not done so already.

    All best,

    Suzanne Alexandra Ascher, Esq., CPA, Tax LL.M.

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  • Is my house subject to a franchise tax warrant?

    I set up a corporation out of my house for which I did not make any money. I just received a franchise tax warrant. What property if any property is subject to a lien as a result of this tax warrant?

    Suzanne’s Answer

    I agree with the other two attorneys who answered this question.

    I would like to add to the discussion. You mention that you set up the corporation out of your home. I am assuming that you own your home and have not actually transferred ownership and title of the real property from you personally to the corporation. Assuming that such a deed transfer never occurred, your home personally owned by you (and not the corporation) should be safe from outstanding "corporation franchise taxes" and the resulting tax warrant against the corporation. However, in any case, you should meet with an attorney to determine the proper answer according to your circumstances.

    Also, I assume the franchise tax warrant of the corporation was issued by the New York State Department of Taxation and Finance. This tax warrant is now a matter of public record.

    In any case, it is a very good idea for you to consult directly with a tax attorney to review the specifics of your situation and determine any current and potentially future personal and corporate liabilities. In addition, it is very important that no trust fund taxes of any kind (such as sales taxes and employment taxes) be owed by the corporation -- whether it be federal (IRS), New York State, any other state, and any locality. Compliance with trust fund taxes is very important. If the corporation does owe such trust fund taxes and does not pay them, then please be aware that this could result in you ultimately being held personally liable for those kind of taxes in addition to the corporation being liable. And it therefore follows that if you become personally liable, your personal assets are at risk in addition to the corporate assets of the corporation if liable.

    In addition to consulting directly with an attorney, please also refer to the IRS website (www.irs.gov) and the New York State Department of Taxation and Finance website (www.tax.ny.gov) along with the website of any other applicable governmental authority.

    Good luck and all best,

    Suzanne Alexandra Ascher, Esq., CPA, Tax LL.M.

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  • I am a "off the books" employee. Can my employer make me work weekends?

    Our crew agreed to work Saturday, but let our boss know everyone had plans on Saturday night and could not work Sunday. They told us if you don't work Sunday, then you don't work Saturdays Is this illegal?

    Suzanne’s Answer

    In addition to the question you raised, I would ask that you consider another issue: whether you are indeed an "employee" or an "independent contractor"?

    There are facts and circumstances which should be reviewed concerning your situation to accurately define the whether or not this relationship with the person referred to as your boss is actually an employer or not. You may in fact be an employee; however, maybe not and instead an independent contractor. The distinction is very important because the proper classification of you as an employee or independent contractor can impact not only rights that you may have under employment law, but also can impact the tax treatment of all parties involved, for example, income tax and social security/medicare taxes.

    Good luck with your situation, and please consider consulting directly with an attorney concerning your situation for both employment law issues and tax law issues. Also, the www.irs.gov website contains helpful information.

    All best,

    Suzanne Alexandra Ascher, Esq., CPA, Tax LL.M.

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