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Mohammad Ahmed Faruqui

Mohammad Faruqui’s Answers

100 total


  • Hold harmless clause

    Is there a generic Hold Harmless Clause we can use for our organization when we loan out equipment?

    Mohammad’s Answer

    A generic Hold Harmless Clause may also hurt you if it's too broad or too narrow for your specific purposes. An attorney can help you make sure that you have the right fit.

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  • Family Limited Partnership

    How does a Family Limited partnership work? It sounds like a lot of work to put into place and that I need a lot of assets to get the benefit over the cost out of it. Is this an accurate statement?

    Mohammad’s Answer

    You may be better off setting up a regular Limited Partnership instead of a Family Limited Partnership because of the possible IRS scrutiny. But if you think about it, there has to be a compelling reason to set up any kind of partnership. Why not form an LLC? Then you can have the liability protection similar to that of a corporation, but you could be taxed like a partnership.

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  • Small Business

    I am going to offer a professional service, should I register as a PLLC, LLC or LC

    Mohammad’s Answer

    You need to be more specific. What kind of professional service are you talking about?

    In many states, especially here in Florida, the law prefers that you register your business as a PLLC or a P.A. A P.A. stands for Professional Association and usually applies to doctor's offices, attorney offices, accounting offices and other similar professional offices. PLLC could be used for other professional service organizations depending on your state.

    Some states may not even allow a doctor or lawyer to register their business as an LLC or LC. Florida allows attorneys to register as an LLC, but if the attorney wants to expand his law firm to other states, he would have to go through the trouble and expense of converting it into a P.A.

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  • State sales audit

    Again, NY delcares war on smalll business. Can NY demand an audit of a business closed for 2 yrs for sales tax, even when none was ever collected? Sounds like a witch hunt to me, a very expensive one. This was a C Corp and no assets were left at...

    Mohammad’s Answer

    The 5th Amendment may come into play only when you are being asked to incriminate yourself with what you "say." It's your right to silence your mouth (not your business records) where 5th Amendment rights come into play. For you to protect your business records, your attorney in New York is going to have to try something other than the 5th Amendment.

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  • Is money paid by a city to reimburse a loss caused by the city taxable

    is money paid by a city to reimburse a loss caused by a city taxable

    Mohammad’s Answer

    Generally personal injury payments are not supposed to be taxable income, but that may have changed recently. It's best to find out with your CPA or tax attorney.

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  • MORTGAGE INTEREST STAEMENT

    ON MY STATEMENT FROM A HOME LOAN THAT I REFINANCED IT SAYS STARTING IN BOX 4 "POINTS IN BOX 4 NOT REPORTED TO IRS.NOT TO BE INCLUDED ON LINE 10. IRS PUB 936 5,060.75"--THIS CARRIES DOWN INTO BOX 5. CAN I USE THIS AMOUNT? I HAVE NOT FI...

    Mohammad’s Answer

    You need to consult a tax lawyer or an accountant. The link for IRS Publication 936 is http://www.irs.gov/pub/irs-pdf/p936.pdf, and it will show you a flow chart discussing when a person's mortgage interest is fully deductible and when it is only partially deductible.

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  • Bonded and Licensed Landscaper avoiding calls - will not refund deposit, has not performed any service

    Hi, My husband and I signed a contract and put down a deposit to have landscaping performed in the backyard on March 30. Prior to signing the contract, the landscaper verbally indicated that if we changed our mind he would fully refund the depo...

    Mohammad’s Answer

    In Florida, the small claims courts are better in some counties than others. But overall there is some difficulty in small claims or even county court claims against construction contractors. Even if you win the case, you still have to enforce the judgment to collect the money. Collecting against a deadbeat contractor is tough because they often don't have the money. Of course, when times get better you probably could collect money from the contractor when he makes money in the future. But you would have to track him down every time he disappears, and re-perfect the judgment lien against him.

    You may have a breach of contract action against the contractor. I don't know about Washington state, but in Florida the contractors are required to put the "change your mind" clause in writing on the contract. The seller of services is also supposed to give the consumer at least 3 days to think about it and change their mind. If a contractor tells a consumer their right to change their mind orally, the contractor may be avoiding the requirement to put it in writing. This is in violation of Florida's consumer protection statutes.

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  • Tax help

    I recived a letter from theIRS saying that for the tax year 2006 I an aditional $ 6,981 due to a debt cancelation that was due to the loss of my home to the bank and this is the first that I have heard of it the Bank is Benifical Morgage Corp and ...

    Mohammad’s Answer

    You also need to look into why you did not receive the 1099c from the bank. While this will not absolve you of your tax obligations, you may have an action against that bank for 1) not informing you and not disclosing that you will receive a 1099c and will be liable for taxes of the debt forgiven, and 2) failing to send you the 1099c.

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  • Shoplifting

    Is a civil theft notice the same as a criminal arrest and does it lead to a criminal record?

    Mohammad’s Answer

    The civil theft notice is not a criminal charge, but it is a notice that the "victim" must send the person thought to have stolen some property, at least 30 days before the victim files suit. If they sue the person accused and win in court, then the person accused will have to 1) return the property, 2) pay penalties for damages or loss of use, AND 3) pay treble damages (which means triple the value of the item).

    If it is true that the person accused has taken or stolen the item, it's much easier to return the item before the deadline given on the civil theft notice. If you do so, make sure you get them to give you a signed, written release from further liability or lawsuits. Good luck.

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  • Corporate minutes

    We are a small C corp and I need to find some one to do our corporate minutes ,how and who do I need to find for this task

    Mohammad’s Answer

    I agree with Nancy, that you should use the attorney who helped you form your corporation to help you with minutes. What better attorney than the one who knows the entire history of your company personally? On a side note, maintaining a corporate book is very important because it helps you maintain a written corporate history, creates a trail of intentions that you can look up, and may be inspected by authorities under certain circumstances (what better way to prove that you're involved in a legitimate business if someone accuses you of otherwise?).

    A traditional-styled corporation may use a physical book with a seal for maintaining minutes. But bear in mind that a few companies and non-profit organizations often use electronic means of preserving minutes. Some methods are ad hoc, such as simply saving them in emails, and other methods are more formal, such as saving all minutes in a company server.

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