Wednesday, March 28, 2012

Limited Liability?

Q.  I loaned my sister some money last year to help her get started in her business. My main concern is protecting my family from liability. I understand we may need a LLC or Corporation. Can you help with tax returns? What is our best course of action?

A.  Unless you formed your corporation or LLC and ran your business through them last year, most likely you operated as either a loosely formed partnership, or your sister ran her business as a sole proprietor. I can't give legal advice, but it is too late to do anything after-the-fact. My best advice is to seek legal counsel immediately in the state your sister operated her business, find out what you can do legally, then get your books in order. You really can't prepare tax returns until all the above is accomplished.

Monday, March 26, 2012

Gas Tax Credit?

Q.  With gas prices so high, is there a credit we RVers can take on our tax returns? I was looking through the IRS forms, and I see Form 4136, Credit for Federal Tax Paid on Fuels.

A.  Great question, but regrettably, although we could all put this to good use, the credit applies only to fuels used on farms, and on off highway business use. In 32 years I have never had an opportunity to use this credit for someone on their tax returns.  We can dream, can't we? Thanks for asking.