|
Making Money RVF Tax Lounge
|
|
| Author | Message |
(02-06-2015 12:03 AM)Disco_Volante Wrote: What is the total list of documents I need to incorporate a business?This isn't really a tax question, so I won't be able to help you out much. I've never created stock certificates, so I would not know how to do this. Typically, it is done by an attorney. If you are not bringing in a ton of money, you can use legalzoom. If you're clearingdecent money, get it done correctly and pay the money. It is a pain in the ass to liquidate and then create a new entity when you did it wrong the first time. You do not lose money by using a good attorney.
I started a small S corp and so far I have
-Article of incorporation in my state
-Federal EIN number
-Stockholders agreement
I still need corporate bylaws, and issue stock certificates, IRS form 2553 and what else?
Also what are the mechanics of creating stock certificates? Can I type and print them myself or is there some registration process?
I asked an attorney and he charges $1500 to incorporate so I said fuck that. Other than completeing corporate by-laws Im not sure what else I need to do.
All the information online is very fragmented I can't find a definitive guide on the exact documents I need.
thanks
(02-06-2015 12:19 AM)Papi Rico Wrote: Expat tax question:
In 2014, John Doe successfully transitioned his online business from a Sole Proprietorship [BETA & ASSOCIATES] to an overseas-incorporated limited company [PAPI RICO LTD]. As of June 15, 2014 John began doing business under his new company name: he filed all necessary incorporation documents through his legal counsel, and overseas incorporation specialist. On that same date, John informed all of his preexisting clients of all changes, including his new company's name, physical address, webpage, and email. All invoices sent after June 15 reflected this information. PAPI RICO LTD was officially incorporated in the overseas jurisdiction on July 1, 2014.
Project 1 was ordered on June 15. Services were performed between June 16-20. An invoice was sent on July 1, and payment was collected on July 2, 2015.
Project 2 was ordered on June 29. Services were performed between June 29 and July 5. An invoice was sent on July 6 and payment was collected on July 7, 2015.
Project 3 was ordered on June 30. Services were performed between July 1 and July 15. An invoice was sent on July 15 and payment was promptly collected.
All services were performed overseas. All payments were received in the United States. John is unquestionably eligible for the Foreign Earned Income Exclusion: he spent a total of 14 days in the United States in 2014 and is the sole director and shareholder of the overseas entity.
Which of the 3 projects (if any) may John lawfully claim as income of PAPI RICO LTD, hence income subject to the Foreign Earned Income Exclusion?
Your advice on this matter is highly appreciated.
(02-11-2015 01:34 AM)Richiavelli Wrote:(02-06-2015 12:19 AM)Papi Rico Wrote: Expat tax question:
In 2014, John Doe successfully transitioned his online business from a Sole Proprietorship [BETA & ASSOCIATES] to an overseas-incorporated limited company [PAPI RICO LTD]. As of June 15, 2014 John began doing business under his new company name: he filed all necessary incorporation documents through his legal counsel, and overseas incorporation specialist. On that same date, John informed all of his preexisting clients of all changes, including his new company's name, physical address, webpage, and email. All invoices sent after June 15 reflected this information. PAPI RICO LTD was officially incorporated in the overseas jurisdiction on July 1, 2014.
Project 1 was ordered on June 15. Services were performed between June 16-20. An invoice was sent on July 1, and payment was collected on July 2, 2015.
Project 2 was ordered on June 29. Services were performed between June 29 and July 5. An invoice was sent on July 6 and payment was collected on July 7, 2015.
Project 3 was ordered on June 30. Services were performed between July 1 and July 15. An invoice was sent on July 15 and payment was promptly collected.
All services were performed overseas. All payments were received in the United States. John is unquestionably eligible for the Foreign Earned Income Exclusion: he spent a total of 14 days in the United States in 2014 and is the sole director and shareholder of the overseas entity.
Which of the 3 projects (if any) may John lawfully claim as income of PAPI RICO LTD, hence income subject to the Foreign Earned Income Exclusion?
Your advice on this matter is highly appreciated.
A bit vague, I need to know a little bit more information:
1. How were you picking up income of the sole properitorship in prior years?
2. Is the LTD treated as a flow through vehicle or is it a corporation?
3. The corporation is doing business with US citizens?
4. Are you sure you qualify for the Foreign Earned Income Exclusion? http://www.irs.gov/Individuals/Internati...quirements
The conservative part of me says that you wouldn't pick up any of the income inside of the LTD until incorporation, especially if there is documentation of such. I do not really see how that would affect your tax position though - if the LTD is flow through, you would still treat it as a sole proprietorship, only new there is a liability shield. I feel like I am missing something.
(02-12-2015 02:31 AM)BallsDeep Wrote:(02-11-2015 06:01 PM)Harvey Specter Wrote: If you take section 179 depreciation on an asset then remove it from the corporation by any means (sale, dividend, compensation, whatever) you need to then recapture the depreciation as ordinary income. So basically there is no benefit for doing it.
The asset would not be sold or change ownership. It would just be located outside of the country.
For example, let's say it was driven to Canada and remained there for a while. It may stay there for three months or three years. How would that make a difference?
(02-12-2015 09:13 PM)BallsDeep Wrote: Ok last question on the subject of Section 179:
My understanding is that if you buy a car and write it off, and later sell it, that you then need to report the sale as income.
But what if someone buys a section 179 vehicle for 25K, takes a full writeoff on it, and then trades it in for a regular car that's valued around the same amount... Would you get a huge tax break by doing that? Because I don't see how you'd even declare that. (Not that I'm planning on doing that, but it just popped in my head)
(02-12-2015 03:26 PM)Harvey Specter Wrote:(02-12-2015 03:07 PM)BallsDeep Wrote:(02-12-2015 12:04 PM)Harvey Specter Wrote: I thought you meant that you were taking it out of the company. If you have a legitimate business reason for it then it shouldn't be a problem. I also recommend at least picking up some portion of personal usage for any autos, unless you have impeccable records.
Ownership wouldn't change, and there wouldn't be a legitimate reason for the vehicle leaving the country. However to qualify for Section 179 the vehicle needs to be used "at least 50%" for business. So I'm not asked to claim that I partially use it for personal reasons.
How is the 50% supposed to be quantified? I assume by mileage, but what's to say that I don't run up the miles in the first couple months I own the car for business purposes, and then use it occasionally in Canada for the rest of the year?
Yes by mileage.
I don't really know how to explain this in layman's terms but here is my attempt. Whatever percentage of mileage you drive for business is multiplied by the cost of vehicle and that becomes your cost basis for the auto. You can take a section 179 deduction on your cost basis of the auto. This will change on a yearly basis depending on your personal/business usage. If it decreases you have to recapture some of what you previously took a 179 deduction on. You are required to keep a mileage log detailing business vs. personal usage.
In theory, you could lie and say that it is 100% business usage and then deduct the full price of the vehicle and drive it around Canada all you want. Just hope that you don't get audited, but chances are that you won't.
(02-12-2015 07:43 PM)tarquin Wrote: I just wanted to point out that the "audit protection" that companies like "turbo tax" sell usually only go so far as the offers in compromise part of the audit process. If you have a disagreement on the law or the facts that necessitates going to Tax Court, you will be paying for lawyers on yourself. I've seen a few people get burned.
(02-11-2015 11:56 AM)Papi Rico Wrote:(02-11-2015 01:34 AM)Richiavelli Wrote:(02-06-2015 12:19 AM)Papi Rico Wrote: Expat tax question:
In 2014, John Doe successfully transitioned his online business from a Sole Proprietorship [BETA & ASSOCIATES] to an overseas-incorporated limited company [PAPI RICO LTD]. As of June 15, 2014 John began doing business under his new company name: he filed all necessary incorporation documents through his legal counsel, and overseas incorporation specialist. On that same date, John informed all of his preexisting clients of all changes, including his new company's name, physical address, webpage, and email. All invoices sent after June 15 reflected this information. PAPI RICO LTD was officially incorporated in the overseas jurisdiction on July 1, 2014.
Project 1 was ordered on June 15. Services were performed between June 16-20. An invoice was sent on July 1, and payment was collected on July 2, 2015.
Project 2 was ordered on June 29. Services were performed between June 29 and July 5. An invoice was sent on July 6 and payment was collected on July 7, 2015.
Project 3 was ordered on June 30. Services were performed between July 1 and July 15. An invoice was sent on July 15 and payment was promptly collected.
All services were performed overseas. All payments were received in the United States. John is unquestionably eligible for the Foreign Earned Income Exclusion: he spent a total of 14 days in the United States in 2014 and is the sole director and shareholder of the overseas entity.
Which of the 3 projects (if any) may John lawfully claim as income of PAPI RICO LTD, hence income subject to the Foreign Earned Income Exclusion?
Your advice on this matter is highly appreciated.
A bit vague, I need to know a little bit more information:
1. How were you picking up income of the sole properitorship in prior years?
2. Is the LTD treated as a flow through vehicle or is it a corporation?
3. The corporation is doing business with US citizens?
4. Are you sure you qualify for the Foreign Earned Income Exclusion? http://www.irs.gov/Individuals/Internati...quirements
The conservative part of me says that you wouldn't pick up any of the income inside of the LTD until incorporation, especially if there is documentation of such. I do not really see how that would affect your tax position though - if the LTD is flow through, you would still treat it as a sole proprietorship, only new there is a liability shield. I feel like I am missing something.
1. As a sole proprietorship, things were straightforward: I used cash-based accounting and paid self-employment tax on my worldwide income.
2. The LTD is a foreign corporation for US tax purposes. I understand there are Form 5471 filing requirements.
3. The corporation has US clients. However, it has no U.S. permanent establishment or office and performs all services overseas. To my understanding, this doesn't trigger 26 U.S. Code § 882 (a)(2)'s tax basis: gross income which is effectively connected with the conduct of a trade or business within the United States.
4. There is no question that I qualify for the Foreign Earned Income Exclusion.
The original question is this:
If I'm on a cash-based accounting system as a sole proprietor and bill clients as such, could my "successor" corporation pick up any payments received following the date of incorporation? I've been looking all over for legal authority, but cannot find an answer one way or the other..
(02-13-2015 11:04 PM)Richiavelli Wrote:(02-12-2015 07:43 PM)tarquin Wrote: I just wanted to point out that the "audit protection" that companies like "turbo tax" sell usually only go so far as the offers in compromise part of the audit process. If you have a disagreement on the law or the facts that necessitates going to Tax Court, you will be paying for lawyers on yourself. I've seen a few people get burned.
Yeah from what I hear, the "audit protection" won't really help you - they'll blame you for not understanding what you were putting into turbotax, so it would be negligence on your part.
|
« Next Oldest | Next Newest »
|
RooshV.com