Talking with TaxSpeaker: Video 99
1. Is it allowed to make Qualified Charitable Distributions from an inactive SEP? Publication 590-B, page 13 indicates you cannot, but Fidelity seems to allow it for inactive SEPs.
2. Business, a Limited Partnership, having Non-recourse Loan of 14 million is being offered to settle for 10 million by a non-recourse lender. Does this event create income related to "Cancellation of Debt"? Does LP has any avenues to reduce Basis in Assets and avoid COD related income recognition. Any other guidance in this matter will be greatly appreciated.
3. I listened to your video Q & A on Tuesday and I thought you said taxpayers would not have to pay back their stimulus money. You referenced the IRS website. I was reading an article in the Wall Street Journal on April 28 and Mnuchin said if a representative received a stimulus check from someone who is passed away they would have to pay it back. Who is right? The IRS website or Mnuchin?
4. I was wondering if you could create a newsletter about the Family First Coronavirus Act? I am particularly interested in learning about EPSLA and associated tax credits. I had to provide sick leave to an employee due to coronavirus-related matter. Specifically, I am wondering if I should claim a credit now by filing Form 7200 or if I should wait until I file Form 941 for the second quarter in July? Any guidance—including pros and cons of each approach—would be very helpful.
5. My boss took your class on the 2020 CARES Act and on page 18 of your manual under Allowable Uses of PPP Loan we need clarification on "Interest on any other debt obligation that was incurred prior to February 15, 2020" Does that include interest on loan that aren't mortgage loans? Say for instance a loan to buy out a partner, or vehicle loan?
6. In your CARES Act presentation, you said that you applied for EIDL relief, one for your company and one for your wife and son who owns the commercial rental property. Have you received money yet, or any response whatsoever? I received an e mail saying that the EIDL grant money would be parsed out based on $1,000 per employee which doesn’t make a lot of sense to me since sole proprietors don’t necessarily have employees leaving a chunk of small businesses without the promised relief.
7. Can/how do new businesses apply for a PPP loan? We have a couple of clients who started businesses in late 2019 that put a lot of money into getting their businesses up and running and who are now really struggling due to the current state of affairs. One business, a partnership, had not yet started paying out wages or guaranteed payments because the business had not yet generated the cash flow needed to pay the partners for their services. The second business, a Schedule C, does not have a profit because substantial costs were spent on tenant improvements and other expenses readying the business for opening. Is there any way for these businesses to participate in the PPP program when the don?t have wages or Schedule C profit?
8. What online tax preparation software program do you guys use? Do you recommend it?
9. I have an older taxpayer who claimed her disabled son on her 2019 tax return and filed as Head of Household. If in 2020 she does not claim him as a dependent, could we file the disabled son as a Non-Filers for 2020 to receive the $1,200 stimulus payment next year?
10. Do payments under a "Health Reimbursement Account" (HRA) count as health insurance for purposes of loan forgiveness on the PPP loan?
11. How to record the "loan forgiveness" on the books, and tax return, for the different types of entities?
12. We are a construction company and called back our employees from unemployment. We are giving everyone additional hazard pay to work during this time from PPP monies. Is this okay?
13. A small clothing company, in difficult times, takes out a $2,500,00 loan to fund his business. The loan is at 7% and has a three years term. It carries a provision, we’ll call it a “success fee”, meaning that the business owner MUST pay off this loan within three years. Failure to do so will subject the company with a “success fee” of $500,000. If the business were not able to pay off the loan, and paid the $500,000 “success fee”, would the fee be tax deductible?
14. My question is one bank told me to defer my entire Simple IRA deferrals for 2020 in the next 8 weeks. This means I will have to raise my salary and I am half owner of our business. Could this be a problem in forgiveness?