Month: July 2014

California Installment Sale Tax: Simi, Chatsworth & Camarillo Offices

Posted on by Craig Mathias

Reference: California Form 593 instructions.

If you sell any asset in California on an installment contract, the BUYER has to withhold monthly on the principal payments he/she makes to you.  The buyer then sends the tax withheld to the Franchise Tax Board (FTB) EVEN IF YOU’E MOVED out-of-state. You, the seller, then file your annual tax return with CA to reconcile the amounts withheld with your actual tax liability (and often receive a refund of some of the backup withholding).

BUYER (not seller) is responsible for withholding CA tax from each payment.  The buyer must withhold the CA tax and file the Form 593 on monthly basis.

SELLER can elect to tax the entire CA gain in the year of sale.  If this election is made, the seller must make written request to the FTB.  Once the FTB approves the request, they will issue a letter releasing the buyer from withholding requirements.

Inherited IRAs and bankruptcy.

Posted on by Craig Mathias

Reference: Clark v. Rameker (June 12, 2014) US Supreme Court, Case No. 13-299.

The US Supreme Court has ruled that inherited IRA accounts are not protected from bankruptcy from creditors, as are non-inherited retirement accounts. Traditional IRAs and other retirement accounts will continue have creditor protections.

The full Court opinion is found at www.supremecourt.gov/opinions/13pdf/13-299_mjnO.pdf.

 

California Family Leave expanded to grandparents and others.

Posted on by Craig Mathias

Reference: CA UIC Sections 984, 2116, 2601, 2613, 2708 and 3254

Starting July 1, 2014, the CA paid family leave (PLF) program aka Family Temporary Disability Insurance program has been expanded to cover workers who take time off to care (up to six weeks) for a seriously ill:

Parent – in –  law

Grandparent

Grandchild OR

Sibling

This program is administered by the CA State Disability Insurance program.