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George Dimov — Page 57

Expert tax tips, accounting insights, and financial guidance from George Dimov, CPA — serving clients across all 50 states for over a decade.

Page 57 of 57

Net operating Losses of Sole Proprietor Carryforward into Newly Formed Partnership

When a sole proprietorship converts to a partnership, the **NOLs stay on the individual's tax return**, not the new partnership's. Because both are pass-through entities, you can **carry forward the NOLs** to offset your **future personal income** from the partnership. The new partnership (Form 1065) **does not report the old NOLs** on its balance sheet, simplifying the process. This strategy helps maximize personal tax benefits.

September 28, 2016Taxes5 min read

What is the basis of property received as a gift?

The basis for property received as a gift, such as a partnership interest, is determined by the donor's adjusted basis and the FMV at the time of the gift. If FMV < Donor's Basis: Use donor's basis for calculating a gain. Use FMV for calculating a loss. If both result, there is no gain or loss. If FMV ≥ Donor's Basis: Use donor's basis, adjusted for gift tax paid. For business property, use the donor's basis for depreciation.

September 12, 2016Taxes5 min read

I don’t know my basis in my S corp

**S Corp Basis** is a critical tax figure representing an owner's contributions adjusted by profits, losses, and distributions. It determines the **taxable gain** upon selling your S Corp interest (e.g., higher basis means lower gain). Owners often overlook this. Regularly requesting basis worksheets and K-1s is essential to accurately report tax liabilities, avoid issues with the IRS, and ensure effective long-term tax planning. Maintaining detailed records is crucial for accurate calculations.

September 1, 2016Taxes5 min read

Tax Returns for Expats with Dependents

For **U.S. expats** with non-citizen spouses/children, dependents must have an **ITIN** to be claimed. You can file the return and mail Form W-9 to the IRS ITIN Operation in Austin. For filing status, "Married Filing Jointly" requires reporting the spouse's **worldwide income**. Alternatively, you can file as **Head of Household** and list the spouse as a dependent, avoiding the need to report the spouse's income. Exclusions (Form 2225) and tax credits (Form 1116) may offset foreign income.

September 1, 2016Taxes5 min read

Strategy for passing California PETH exam

The **PETH exam** for CPAs is often called "open book," but it's best to prepare with a strong knowledge base. The optimal study strategy involves buying the $150 PDF and using a dual-screen setup to search for answers during practice. Key facts: you need a **90% passing score**, there is **no time limit**, and you can retake it immediately. Be methodical and focus on understanding complex independence questions.

September 1, 2016Taxes5 min read

Foreign source income and bona fide resident test

Investors in foreign businesses (e.g., Cayman Islands) often seek to use the **$100,800 foreign-earned income exclusion** or a foreign tax credit. To qualify for the exclusion, you must meet the **bona fide resident test** (live abroad for the entire tax year) or the **physical presence test** (be physically present abroad for 330 full days in 12 months). If you don't qualify, income is reported on Schedule C, which allows offsetting expenses. Accurate reporting is crucial.

July 31, 2016Taxes5 min read

What education deduction has no income limit?

Individual filers have several **education deductions and credits**, including the **Tuition and Fees Deduction** ($4,000), **American Opportunity Tax Credit** ($2,500), and **Lifetime Learning Credit** ($2,000).

July 21, 2016Taxes5 min read

Tangible Property Tax Returns

Tangible property tax returns are yearly state filings for items like furniture, fixtures, computers, and tools. They often require depreciation according to state-specific methods. Failing to file is a common oversight, leading to potential penalties or over-assessment by the county. Many states require filing even with minimal property. Finding a CPA specializing in local ordinances can be challenging.

July 21, 2016Taxes5 min read

Maryland Form AT3-51

In Maryland, **sole proprietorships and general partnerships must file Form AT3-51**. An **LLC must file Form 1** with the MD Department of Assessments and Taxation, regardless of its federal tax status. If the LLC is a partnership, Form AT3-51 is needed. Form 1 requires a balance sheet and depreciation schedule (unless no tangible property is claimed) and a **$300 filing fee**. All forms must include the Maryland Department ID number.

July 11, 2016Taxes5 min read

What if I cannot obtain my W2, 1099, or 1098 forms from prior years?

If you lack 1099, W2, or 1098-E forms for past tax years, contacting old employers/servicers often fails due to unresponsiveness, business closures, or HR limitations. A crucial solution is using IRS Form 4506-T to request a free tax return transcript, which contains the necessary information to file your federal returns. Expect the transcript by mail within 10 days. If issues persist, contact the IRS directly or consult a tax professional.

George Dimov — Page 57

Net operating Losses of Sole Proprietor Carryforward into Newly Formed Partnership

What is the basis of property received as a gift?

I don’t know my basis in my S corp

Tax Returns for Expats with Dependents

Strategy for passing California PETH exam

Foreign source income and bona fide resident test

What education deduction has no income limit?

Tangible Property Tax Returns

Maryland Form AT3-51

What if I cannot obtain my W2, 1099, or 1098 forms from prior years?

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