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John Michael Goralka
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John Goralka’s Answers

26 total

  • Can I personally be held responsible for tax debt of a dissolved corporation?

    Company was dissolved in 2006 with the Parish of Lafourche. The State did not dissolve the company until 2010. I would say about 7 months ago I received 1st of several letters from the state wanting back tax penalty and interest from 2008, 2009, ...

    John’s Answer

    First, that is a question under state law since you indicated that the collection notices were from the state for state income tax. California law limits the collection of a corporate tax debt to corporate assets with the exception of payroll tax withholding and transferee liability. A 100% penalty will be assessed for failure of a corporation to pay over the taxes with held from an employees check but not actually paid to the tax authorities. Transferee liability arises when assets are transferred from the corporation to a shareholder or another person without paying fair consideration for the asset. Another area that that may arise is if you personally owed money or funds to the corporation that were not repaid at the time of dissolution. This will show up on the corporations final tax return in the balance sheet portion or schedule l of the return. Aside from those areas, there typically is no personal liability for a corporate income tax debt. These rules are similar in most states, but you should confirm this with a Louisiana tax attorney now to insure that there is not personal liability which will continue to accrue interest and penalties as time goes by.

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  • What are the pros & cons of having multiple co-trustees on a living trust? Is having multiple trustees advisable?

    One of the siblings wants oversight on existing trustee on parent's estate. This sibling thinks being a co-trustee would provide that oversight. Existing trustee (and one of the beneficiaries) is providing information to all beneficiaries. Tru...

    John’s Answer

    First, I am sorry for the possible conflict or drama that has arisen within your family. Your mother and the acting trustee need to review this situation and the trust provisions with a qualified trust attorney. the question itself includes many issues that should be evaluated and resolved. I can not tell from the question whether the trust is revocable and easily subject to change. If irrevocable, does the trust itself authorize the appointment of co-trustees. If not, can that be modified such as by a trust protector. That being said, division of duties is possible such as with an investment trustee and a distribution trustee. If co-trustees are utilized, will require both to sign for every transaction? That may complicate trust administration. If we allow either to act independently, are they both willing to accept some measure of liability for transactions that one co-trustee did not sign for or otherwise authorize. Careful consideration should be given as to why we want co-trustees. If we are seeking oversight, will the division of duties actually provide that result. Sometimes the use of a professional fiduciary as a co-trustee may provide the desired oversight. The most frequent objection to a professional fiduciary is the anticipated cost. If a professional co-trustee is being considered, virtually all are willing to be interviewed by the family regarding investment philosophies, costs and other issues so that there are no surprises later. I am sorry for the length of my answer which lacks a simple clear answer. However, this is really a complex situation and truly warrants meeting with an experienced trust attorney.

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  • Trust fund accounting

    How do I go about requesting a trust fund accounting from a sneaky attorney of a generational skipping trust. My father, his brothers and sisters are the interest income beneficiaries at present and once they pass it goes to me. Is there a way to...

    John’s Answer

    First you should review the trust regarding any provisions governing the accountings that are required by the trustee and the format for those accountings. Then you should make a written request for the accounting. If necessary, you may petition the court for the accountings to be provided. Then you should request the original source documents needed to verifiy or substantiate the information presented in the accounting. An attorney in your area may be better able to guide you through this process.

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  • How can a irrovacable trust be searched for?

    My husband passed away 2 months ago and I am his only surviving heir I beleive there may have been an irrevocable trust set up by my husbands mother who is still alive. I was wondering is there anyway to locate the trust document is it set up in a...

    John’s Answer

    I am very sorry for your loss. The lawyer can not hide or destroy the trust instrument as that would be a violation of the attorney's ethical and professional obligation subjecting him or her to discipline. The irrevocable trust would have a separate tax id number. The trust would have a much higher tax rate than your husband's individual tax rate. For this reason, income typically would be distributed to your husband annually to obtain a distribution deduction at the trust level. Review your prior income tax returns for income from the trust. You could also of course make a written request to his mother and the attorney especially of the attorney also represented your husband. Note that while you refer to yourself as the only surviving heir, the trust itself will control who will receive any distributions. Trusts are often written with an intent to provide distributions to blood relatives to the exclusion of spouses. You may also seek to conduct public record searches for other assets that could be linked to your jusband. Many attorneys have access to public records and my be able to conduct a search for you. Once again, I am very sorry for your loss.

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  • Does challenging a successor trustee's self-determined compensation affect the estate?

    Our sister, who was named successor trustee tells us, if we challenge what she self-determines is reasonable pay, it will cost the estate too much money because it will then have to go through probate. She also indicates the estate will be frozen ...

    John’s Answer

    The 100 hourly rate is excessive. You can challenge the compensation without forcing a full probate. You should discuss this situation with an attorney. A formal challenge is filed in probate court for judicial review but that is not the same thing as a formal probate. Your sister will be able to use trust funds to defend that action unless you prevail. If she states in writing that the estate is otherwise ready for distribution, you may be able to force a distribution with a reasonable holdback to cover her compensation. In virtually all counties in California, contested proceedings such as these will be referred to mediation which has a very high rate of resolution. The result is that you avoid the cost a delays of a full trial or hearing on the merits. If the amount of compensation sought is substantial and worth the cost of such a contest, then you should review this with an experienced attorney in this area. You should alos review the trust instrument itself to be certain of the compensation provisions. Most trusts provide for reasonable compensation but some have very specific provisions on this issue. Finally, you should try to take the emotion out of your decision. The decision to contest the compensation should be made as a business decision or an invesment. No attorney can guarentee a particular result, but you should feel confident that the compensation sought is so excessive that there is a reasonable likelihood for success and if so, the amount of the savings will be more than the attorneys fees spent to obtain that result. I am sorry that you are going through this and money issues such as these do not always bring the best out of people and can be very divisive in family situations.

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  • Do I need to file a DBA/Fictitious Business Name for a product/website?

    I have a DBA/Fictitious Business Name for my primary company but am building a website as a product of the company. On the page I have listed, "Is a product of MY COMPANY NAME." Do I need/should I file a DBA just for the product/website name as w...

    John’s Answer

    Both of the prior attorneys answers are correct. You should also consider filing for California tradmark protection. The cost is nominal and you will be approved more quickly. That will provide your first flag in the sand as to the use of your business name. The filing at the federal appears simple but is decptively complicated as you have many more alternatives in the classes and the manner of filng than can be discussed here. Your name is essential for braning and is well worth the investment of funds to protect from the outset. I noticed that you are in the LA area and the MR Juo is also in your area and a spcialist in these issues. You should consider talking to him so that you can understand the many alternatives that you may have. Congratulations on the new business opprtunity.

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  • Shall I notify Sec of State or IRS about sale of my LLC?

    I am selling my single-member TX LLC. We're still debating on whether it'll be a sale of all shares or sale of all assets. Do I need to notify TX SoS, IRS or anybody else about the change in ownership? I don't want any agencies to assess taxes or...

    John’s Answer

    First, I am not familiar with the reporting requiements in the state of Texas. However, a single member LLC is a disregarded entity for federal inome tax purposes. What that means is that the Single member LLC does not file a separate federal income tax return and is not a recognized entity for federal tax purposes. As a result, the federal income tax ocnsequneces from the sale of the entity will be treated in the same manner as the sale of assets from a sole proprietorship irrespective of whether the business structure of the sale is treated as a sale of the membership interest or the sale of the underlying assets in the LLc. As part of the sale documentation, you should include an indemnification provision in the sale agreement requiring the buyer to indemnify, defend and protect you from any losses associated with the LLc or its business operations that arise or are appplicable to the period after the closing of the sale. Congratulations on the sale of your business.

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  • How does trading stock affect my student's financial aid?

    I live by myself and completely being independent from my family. However, on FAFSA, I have to file as dependent because I'll be 23 in July 2013, no kid, single, and still in undergrad. My father's adjusted gross income is $16k/year on Form 1040A ...

    John’s Answer

    Mr. Larson's answer is correct. I would only add that the finacial aid representatives would find out about the income as you are required to disclose that on the financial aid application and also would be disclosed in your tax returns. Implicit in that disclosure is that you had and invested the $10K. The income would appear to have an effect on your qualification for finacial aid and the amount of aid that you may receive.

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  • What are the tax implications of converting an S-Corporation into a C-Corporation?

    I am basically looking towards any capital gain taxes from take over of S-Corp assets by the C-Corp or something similar to that.

    John’s Answer

    More information is need to understand the true focus of your question. However, the conversion of an S corporation into a C corporation would have a profound effect upon the manner in which that corporation is taxed. A subchapter S corporation is essentially a corporation that has elected to be taxed in a manner similar to a partnership. Such an election avoids the double taxation of income at both the corporate level and the individual shareholder level. An S Corporation effectively pays no income tax at the federal level. The shareholders are taxed individually on the corporate income even if that income has not been distributed from the corporation. A C Corporation pays tax at the corporate level on the corporation's net income. The share holders are taxed as dividends on the income or profits actually distributed to the shareholders. You must understand these basic rules to avoid or minimize tax on the income earned. You can reduce the corpoate level tax of a C corporation by paying wages to a shareholder also working for the corporation. But, you must also withhold payroll taxes on the amounts distributed for those distributions to be recognized as income. If you are unaware of this differance and simply make distributions from the C corporation to you that do not qualify for wages, the combined federal and state tax at the corporate and individual level on those distributions can be as high as 79 cents on the dollar. Be certain to review whatever you are seeking to accompolish to be certain that you truly understand the consequences of the proposed transaction.

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  • In the state of California , what are the procedures for opening a safe deposit box after someone has died? Does the executor of

    the estate have to have the contents of the safe deposit box inventoried and a list made available for the remaining heirs to see

    John’s Answer

    if there is a probate estate, then the executer or administrator can obtain access by presenting to the bank a certified copy of the letters testamentary ( if there was a will) or the letters of administration if there is no will. That document will permit access to the safe deposit box. The executer or other personal representative of the estate should inventory the contents of thebox and provide that list to the appropriate heirs. I recommend that the personal representative always take another individual with him or her to verify his inventory of the contents. You should review the situation with a probate attorney to see if there are any available estate planning documents that would allow entry into the safe deposit box without the requirement of a formal appointment of a representative by the Court.

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