Estimating certainty: Property Taxes, Corporate dissolution and more.

• Author: Williams, Leonard W.

Do your clients know whether or not they have paid their estimated taxes?

Many CPAs seem to have some clients who don't know whether they made their estimated tax payments or how much they paid.

To avoid problems down the road, information regarding California estimated tax payments can found at https: //webapp.ftb.ca.gov/pitpbd/index.asp?submit=Continue.

Since getting the information about California estimates paid is much easier than getting the federal estimated tax payment information, some CPAs check California only. If those payments are in line with the estimates that CPAs set up for their clients, then they feel safe in assuming that the federal estimates were paid correctly.

Income Earned Abroad

Is the Form 2555 exclusion on the federal return equally applicable to a 540NR return?

Federal Form 2555 computes the allowable exclusion of income earned abroad. This is not an exclusion or deduction for California income tax purposes. (See Page 326 of the 2001 California Package X, under instructions for Schedule CA Form 540NR).

Here, it tells you to see the instructions for Line 21, which are on Page 328 of the 2001 California Package X. Finally, it says that the Federal Sec. 911 exclusion (which is what Form 2555 is all about) is an add-back to Column C of Schedule CA.

Corporate dissolution processing

Many TaxTalk listserve participants complained about the difficulties of dealing with the FTB and the Secretary of State over the issue of whether a corporation has been dissolved in time to avoid paying an additional $800 for a subsequent year.

The dissolution process was covered in the November 2002 issue of Spidell's California Tax Letter, which gave this website for obtaining general guidelines and sample dissolution documents: www.ss.ca.gov/business/business.htm.

The article also included information for liquidating LLCs, LLPs and LPs.

The documents that go to the Secretary of State's office should be hand delivered to the Sacramento office or sent via certified mail, with return receipt required.

Documents should not be turned in to local Secretary of State offices.

Spidell's article provides the Secretary of State's mailing address, as well as a website to find private legal service companies that will take the documents to the Secretary of State's Sacramento office.

Other States Requesting Non-Resident Returns

If a California resident has realty income from another state and the tax owed is small, many CPAs will not prepare their...