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Glenn David Monserrat

Glenn Monserrat’s Answers

3 total

  • Tax implications for renting a home for less than mortgage payment

    If I rent my home which has a mortgage payment of $2,632, to my wife via a separation agreement for $1,500 per month, am I able to write off $1132 per month of my income for federal and state income tax purposes?

    Glenn’s Answer

    This question is more complex than you might think. You say "my home." Does this mean that your spouse does not hold any ownership interest in this home?

    Generally, for federal purposes the tax consequence is indeed the total of income received for the property less all of your allowable deduction items (assuming your wife holds no ownership interest in the home and will not herself claim an allocable portion of the deduction items on her own return).

    However, the answer may be different and change the tax consequences if the arrangement were to continue and be memorialized in a divorce decree.

    Assume your divorce decree did not affect ownership of this particular residence but instead would allow your (then) ex-wife the right to occupy the residence and require you to pay the entire, or a portion of the, monthly mortgage payments with respect to the property until a determined point in time. The federal income tax consequences of the arrangement may indeed parallel the consequences of alimony (e.g., income to your ex-spouse when paid and received and deductible from your income when paid).

    The state tax consequences must be addressed by a tax professional admitted in your jurisdiction. In addition, a CPA could be a valuable resource to determine the particular tax consequences for the circumstances in place at the time your return is due.

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  • PLLC and estimated taxes

    I formed a PLLC in April, I am trying to figure out if I need to pay estimated taxes and what to do if I did not pay the one in June

    Glenn’s Answer

    It is unclear from your question the type of trade or business you conduct from the PLLC. The type of activity conducted will at times determine if you are self-employed per se. However, assuming you are the sole member of the (P)LLC, you are likely to be considered self-employed and thus your earnings from the (P)LLC will likely be considered subject to the self-employment tax. Generally you must make estimated quarterly tax payments on this time of income There is however a tri-partite test set forth by the IRS that, if completely satisfied, will liberate some taxpayers from making estimated payments for self-employment income. It is best to consult a CPA to determine your situation and if you meet the test. It may also be helpful to review the Self-Employement Tax guidelines set forth on the www.irs.gov website.

    No Attorney-Client Relationship
    Information posted or made available on or through the Site, including without limitation any responses to legal questions posted on Avvo Answers, information provided in Avvo Legal Guides, and any other comments, opinions, recommendations, answers, analysis, references, referrals or legally related content or information (collectively "Legal Information") is not intended to create an attorney-client relationship between you and any attorney. Such Legal Information is intended for general informational purposes only and should be used only as a starting point for addressing your legal issues.

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  • Do I need an attorney?

    I worked with my dad for eight years in a painting contracting business. Two years ago, I moved to Burleson, TX. Recently I have been contacted by an IRS agent over back taxes owed by the company that my dad still runs. The IRS in Oregon has had t...

    Glenn’s Answer

    Generally, consultation of a tax attorney is a prudent choice for tax controversies. A tax lawyer is often in the best position to make a threshold determination regarding the type of tax asserted as owing as well as the tax years in question. Once this is determined, a tax lawyer can examine the correspondence from the Service, diagnose the problem (from both perspectives) and generate the most favorable options for settlement of the tax dispute. Specifically, several prerequisites exist before the government can commence collection activity. A tax lawyer will be quite aware of these things and be able to determine what action needs to be take in accord with the present status of the matter.

    IRS revenue agents are generally reasonable, practical and will usually not deem your engagement of a qualified representative as equivalent to a lack of willingness to cooperate or voluntarily disclose.

    Remember that the IRS can only act with regard to the information before it. This is in part the reason they wish to speak with you. A tax attorney or other qualified tax professional may be able to efficiently diagnose the problem, propose solutions, and then interface with the Service on your behalf to settle the issue.

    AVVO Term of Use: No Attorney-Client Relationship
    Information posted or made available on or through the Site, including without limitation any responses to legal questions posted on Avvo Answers, information provided in Avvo Legal Guides, and any other comments, opinions, recommendations, answers, analysis, references, referrals or legally related content or information (collectively "Legal Information") is not intended to create an attorney-client relationship between you and any attorney. Such Legal Information is intended for general informational purposes only and should be used only as a starting point for addressing your legal issues.

    IRS CIRCULAR 230 -- DISCLOSURE NOTICE: IRS Circular 230 regulates written communications about federal tax matters between tax advisors and their clients. To the extent the preceding correspondence and/or any attachment is a written tax advice communication, it is not a full “covered opinion”. Accordingly, this advice is not intended and cannot be used for the purpose of avoiding penalties that may be imposed by the IRS regarding the transaction or matters discussed herein.

    In addition, the materials communicated herein are intended solely for the addressee and are not intended for distribution to any other person or entity, or to support the promotion or marketing of the transaction or matters addressed herein. Any subsequent reader should seek advice from an independent tax advisor with respect to the transaction or matters addressed herein based on the reader’s particular circumstances.

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