COVERITLIVE.COM

12:49

Michael P. Sacco, CPA, MST - Good afternoon! I appreciate all the questions posted thus far. Thank you for your patience. We will begin promptly at 1:00PM. I will do my very best to address each question. However, if we run out of time forgive me if I don't get to a particular question. Let's have some fun!!

12:58

[Comment From Susan Carey]
How do you determine the estimate of total tax liability when filing for an extension???

1:01

Michael P. Sacco, CPA, MST - Hi Susan: You need to compile all your information, income , deductions, exemptions, etc. as if you were ready to file the return to estimate your liability. If you do not estimate your liability properly the IRS will deny the extension request and will charge you interest and a penalty for late payment. However, no late penalty will be assessed if the tax paid through withholdings, estimated taxes paid or any other accompanying payment with the extension is at least 90% of the total tax due with Form 1040. Good Luck.

1:01	[Comment From Chris from Watertown] Hi Mr. Sacco-

1:01

[Comment From Chris from Watertown]
Hello Mr. Sacco- In 2008 I got life insurance. For MA state tax reasons, I created an irrevocable life insurance trust and transferred ownership of the policy to the trust. I set up a bank account for the trust in 2008 which was unfunded. Going forward, I contribute $590 once a year to the trust's bank account and the trust pays the premium. Is the trust required to file an IRS Form 1041 as an unfunded ILIT (no money in 2008)? How about in 2009? Thank you.

1:03	Michael P. Sacco, CPA, MST - Hello Chris: If the trust exists in 2008 , you should be filing a zero return (because it is unfunded). The government may look out for it because it was created and a Federal ID # was assigned. Certainly for 2009 as well. Good luck.

1:04

[Comment From David]
Can the ongoing interest on an outstanding business loan can be deducted even after the business has dissolved? Also, a copier was leased in my name for and during the course of business. I had to take out a loan after the business was dissolved to purchase the copier ( that was being leased otherwise I would have been in default). In that scenario, would the copier still be classified as a business asset and may I deduct the interest paid on that asset?

1:06

Michael P. Sacco, CPA, MST -

Hi David:

Interest expense incurred in a trade or business or in the production of rental or royalty income is deductible from gross income. Since the business has dissolved, the interest would no longer be deducted as a businee expense but may be classified as a miscellaneous itemized deduction subject to a 2% AGI threshold. Good luck.

1:06	[Comment From Sheila] Hi Michael,

1:06	[Comment From Sheila] Michael, I have a small home business and a EIn. Last year I took in $3100 and paid out $3650(to myself and a charity). Do I need to file a return? Thanks

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