CASCPA Dev

Forming a professional corporation, (P.C.) or professional LLC (PLLC) in New York State is more difficult than most of other sates. Because in NYS, it is a dual process. 

First, you have to get consent from Education Department (excepted for a law firm, just attached a good standing file directly with Department of State), then you go to the Department of State to file the Certificate of Incorporation. 

Second, only members of the same profession can be shareholders of a professional corporation in many (but not all) provinces. The officers and directors of a professional corporation must generally be shareholders of the corporation as well.

Many states are not required Education Department’s consent for filing a P.C. And many states allowed a non-professional be a shareholder or officer in a P.C. But not for NYS.

Even thou you need to have a consent from Education Department first, but you have to check the name available from the Department of State, before getting a consent from Education Department. 

Many people calling Education Department for opining to file the application. But don’t take the person on the phone’s answer as an official answer. It happened to me when I follow their answers to file the application then got rejected. 

From my experience, choosing a name for the P.C. is most important. Most the rejections are due to the improper names. 

The corporate name must end with the words “Professional Corporation” or“P.C.”. The limited liability company name must end with the words“Professional Limited Liability Company” or “Limited Liability Company” or“P.L.L.C.”, “PLLC”.

For the profession of medicine, licensed physicians may use the initials “M.D.”after their name in an entity title only if they have earned that specificacademic degree.

The following is the filing tips I copied some from NYS Education Department’s website, I found it is very helpful: 

Submitting an explanation of a proposed entity name does not guarantee that the name will beapproved. The Office of the Professions will review the explanation to determine acceptability. 

All CPA firms must submit the CPA form 6R and associated fee when submitting the Certified Copy tothe Office of the Professions. 

Your application will be rejected if your entity name does not contain the profession being practiced.Regulations of the Commissioner of Education, Part 59, Section 59.10(c)(1).

Your application will be rejected if your entity includes only one member as an owner and your entityname includes plural terms such as group, associates, physicians, etc. ( Business Corporation Law,Article 15; Regulations of the Commissioner of Education, Part 59, Section 59.10; Board of RegentsRule 29.1).

Your application will be rejected if you do not submit an explanation for words used in your entity namethat are: initials, foreign words, surnames, abbreviations or words not commonly used in connectionwith the profession(s) being practiced (Business Corporation Law, Article 15; Regulations of theCommissioner of Education, Part 59, Section 59.10; Board of Regents Rule 29.1).

Your application will be rejected if you do not state the appropriate purpose of your entity. The purposemust match the professional title as used in Title VIII of the Education Law and Board of Regents Rule29.1. (Business Corporation Law, Article 15).

Your application will be rejected if the following terms are used in the name of the entity:

Misleading Words That Are Not Allowed in the Name of an Entity Cure Healing International Management 

Your application will be rejected if you use a specialty area in the name but you do not submit boardcertification documentation in that specialty area. This applies to the professions of physical therapy,dentistry, medicine and veterinary medicine. (Regulations of the Commissioner of Education, Part 59,Section 59.10)

Please be aware that assumed names and dbas must still meet the same naming requirements asoriginal names.

Your entity will not be listed on the Office of Professions website until you submit a certified copy ofyour filing from the New York Department of State to the New York State Education Department, Officeof the Professions, Professional Corporation Unit (Business Corporation Law, Article 15).

Your application will be rejected if there is a reasonable belief that there is an affiliation with anotherseparate and distinct entity and if the name of the proposed entity reasonably implies such affiliation,this includes using the initials of another company as the name of the proposed entity (Board ofRegents Rule 29.1).

For the completed guild lines, please check with NYS Education Website.

Business Startup Costs

Cindy Yu, CPA  https://cindiellc.com/blog/

Many people start a new business and don’t know what to do with the various costs building up over time. Business start-up costs are amounts the business paid or incurred for creating an active trade or business, or investigating the creation or acquisition of an active trade or business.

Basically, owners should treat all eligible costs incurred before beginning to operate the business as capital expenditures. Generally, the business can recover costs for assets through depreciation deductions. What are the deductible startup business expenses? How businesses can recover startup costs from their taxes? 

The business can deduct a limited amount of start-up and organizational costs. They can amortize the costs they cannot deduct currently over a 180-month period. This recovery period starts with the month the business begins to operate active trade or as a business.

Qualifying startup costs have the following characteristics

1. Restriction:  costs in the same field as the one the business entered into
2. Timing: costs paid or incurred before the day their active trade or business begins
3. Amount: Start-up costs include amounts paid or incurred in connection with an existing activity engaged in for profit, and to produce income in an active trade or business, such as: 

• An analysis or survey of potential markets, products, labor supply, transportation facilities, etc.
• Advertisements for the opening of the business.
• Salaries and wages for employees who are being trained and their instructors.
• Travel and other necessary costs for securing prospective distributors, suppliers, or customers.
• Salaries and fees for executives and consultants, or for similar professional services.

1. Nonqualifying costs: Deductible interest, taxes, or research and experimental costs.
2. Special Costs of purchasing an active trade or business: Start-up costs for purchasing an active trade or business include only investigative costs incurred during a general search for or preliminary investigation of the business. These are costs that help in deciding whether to purchase a business. Costs incurred to purchase a specific business are capital expenses that can’t be depreciated as the costs that meet the above 4 characteristics.

Back-door Roth IRA

Cindy Yu, CPA  https://cindiellc.com/blog/

Income too high to qualify for Roth IRA? You can put some efforts to make it happen:

2-step Approach

1. Put money in a traditional IRA account. You might already have an account, or you might need to open one and fund it.
2. Convert your contribution to a Roth IRA. Your IRA administrator will give you the instructions and paperwork. If you don’t already have a Roth IRA, you’ll open a new account during the conversion process.

Tax Consequence

1. Pay taxes for non-deductible IRA contribution. Only post-tax dollars go into Roth IRAs. So if you deducted your traditional IRA contributions and then decide to convert your traditional IRA to a backdoor Roth, you’ll need to give that tax deduction back. When it comes time to file your tax return, be prepared to pay income tax on the money you converted to a Roth. And see below for details on the pro-rata rule, which plays a big part in determining your tax bill.
2. Pay taxes on the gains in your traditional IRA before the conversion. If the money in that traditional IRA has been sitting there awhile and there are investment gains, you’ll also owe tax on those gains at tax time.
3. Pay no taxes after. The money in Roth grows tax-free

Tax Due at Conversion

1. Zero tax dollar. No tax due if taxes are paid for all the converting amount
2. Pro-rated tax dollar. When determining your tax bill on a conversion from a traditional IRA to a Roth IRA, the IRS is going to look at all of your traditional IRA accounts combined. And a word about timing: the IRS applies the pro-rata rule to your total IRA balance at year-end, not at the time of conversion.

 全球跨国涉美财富规划

FGT 外国人委托信托的运用

【外国委托人信托 – Foreign Grantor Trust – FGT】

FGT是美国国税局IRS的一个定义，全称为Foreign Grantor Trust, 即外国委托人信托，特指由非美国税务居民成立的，并受委托人控制的美国信托。FGT的税务身份十分特殊，其等同于非美国税务居民；在信托设立时，受托人是美国持牌信托公司或管理人，所以FGT又具备了非美国税务居民的投资便利、隐私和税务中立身份。

外国人可以在美国建立可撤销的外国委托人信托，以持有非美国所在地的资产（例如，非美国公司的股份）。在委托人生前期间，无论是信托还是委托人均不需对非美国来源的收入纳税，但可能要对美国来源的收入进行一定的预扣。但也有例外：美国租金收入和股票的资本收益。

【如何获得FGT身份？】

根据美国委托人信托税规则，如果满足以下任一条件，外国委托人就视为信托的所有人：根据IRC 672 (C) 规定，信托创立人保留撤销信托的权益，即可撤销信托；或者信托创立人有生之年，信托资产只能分发给信托创立人或者配偶。

美国没有签署CRS， 因此非美国税务居民设立FGT可以为其提供很好的隐私性；FGT也具备避债和消除遗产税和避免遗嘱公开的功能。

FGT财富规划目标

FGT 并非适合所有人，我们需要明白正确设计和实施FGT可以实现许多财富规划目标：

• 外国委托人可以在其生前为其自身的利益或者为其美国受益人的利益建立信托
• 任何非美国来源的收入均不由美国征税，而任何美国来源的收入均由委托人而非信托缴税
• 委托人过世后，非美国所在地信托资产无需缴纳美国遗产税
• 委托人过世后，该信托成为不可撤销信托，并且可以成为朝代信托延续几代人，无需缴纳未来的美国转让税
• 死亡后，在信託中实现和积累的收入将受到美国联邦所得税的征收，但是根据信托的所在地，可能不适用州所得税

【FGT适合您的客户吗?】

非税务居民怎样拿回在加拿大卖房成交时被律师扣掉的25%卖房款

Jane Yue, CPA

October 4, 2022

“岳会计，快请帮忙一下!” 微信朋友圈传来的信息留言叮咚提醒。

“我的朋友住在美国居民，疫情期间回中国了一直不方便旅行。昨天急需用钱，就在网上委托加拿大房产经纪将温哥华的房子卖了。 本来计划着可以快速收回资金，没想到加拿大过户律师却说要将卖房款的25%扣下来交税， 还说必须在卖房后十天之内找会计师申报税务， 这是怎么回事呢？ 加拿大税怎么这么高？您有办法退回来一些税款吗?”  

近十几年大量的资金涌入温哥华房地产市场，最近三年疫情期间由于通货膨胀的考虑， 许多加拿大本地人增加房产投资保值，而那些前几年已经囤积了温哥华地产的海外买家也借机抛售套利，回流现金。 

听微信里传来的声音十分着急，我的朋友很快就将她国内朋友老李拖入了微信小圈群聊。简短介绍后，老李说他二十年前移民加拿大拿到了加拿大国籍，在温哥华有一套住宅房。 2019年离开加拿大去美国定居，为了避免双重报税就申请了加拿大非税务居。今年因为急需现金，电话委托温哥华地产经纪将房子卖了300万。没想到处理买卖交割文件的律师将卖房价格的25%， 也就是75万扣了下来，通知他说这是加拿大税务规定，必须在他找会计师进行税务申报和清缴后才能退回给他。

”的确是这样。” 我告诉老李，”而且你还必须在卖房成交后十天之内向税务局进行申报，否则会有罚款。每晚一天罚款$25元，最多$2,500元。“ 

“我听律师说了。但是为什么我要申报啊？我是加拿大公民，不是明年4月份前才报今年的税吗?” 

“呵呵，你是加拿大公民没错，但是你在2019年申请办理了非税务居民，从税法上来说你已经不是居民了。作为非税务居民，有来源于加拿大的收入都必须先扣缴预提所得税，例如你卖房的收入、出租房屋收入都将按照毛收入的25%向税务局汇缴预提所得税。你的房子卖了300万， 过户律师的确是要扣下75万。”

老李问：“嗯怎么这么多税？ 我原来房子买的时候就花了250万， 总共才赚了50万， 竟然要交75万的税？有什么办法可以少交税吗？”

“是有方法的。 在房屋成交后十天之内我们会计师必须向税务局进行申报，不是按照卖房总价而是按照卖房增值部分的25%计算交税金额。以你的情况，就只需要交12.5万。 税务局在收到你的12.5万税款并且经过审核你没有其它欠税之后会发给你税务清缴证书(clear certificate)，在收到税务清缴证书的复印件后房产过户律师就能将扣留的75万退回给你了。通常这个过程需要4到6个月时间。另外你还可以进一步获得退税，但是要等到今年过完在明年报税季时才可以申请。 明天3、4月报税季你可以将你这次卖房的房产中介费等发给加拿大会计师， 请会计师进行非居民2021年个人所得税申报，将你在卖房过程中发生的费用计算进去，你还有可能从税务局获得更多的退税呢。” 

My name is Elaine Yue. a Certified Public Accountant (“CPA”) with my office YYL CPA P.C. at Great Neck, NY. I came to the USA in 2009 from Hunan, China, with an I.T. background. I started my accounting study at Queens College in 2010, and at the same time, I gave birth to my first three children one by one throughout my study years. 2015 was my first tax season as a CPA practitioner, and I gave birth to my fourth child at the end of February 2015. After five years, I accidentally had another two children in the years 2020 & 2021. I officially became six children’s mom & CPA in my community and our CPA society. In my spare time, besides taking care of my children,  I love running. I’m also a marathon runner, and I finished my NYC marathon three weeks ago. Triathlon is my dream. I wish one day I would make my dream come true as other triathlons did. 

2020 was a challenging year for all of us. Covid-19 changed our life, how we practice, and the world. I also became the president of the Chinese American Society of CPAs on January 1, 2020. After three years of my tenure, I have to say that this position has helped me grow in leadership, time management, and people skills. It has also provided opportunities to work closely with our members and colleagues. I appreciate the opportunities this position has provided and the support I’ve received from our members and the board of directors. Since Covid-19, we have been organizing professional continuing education courses via Zoom. We also hosted a virtual Christmas Party & many virtual social events for our members. These new virtual events kept our members united and connected during difficult times. Additionally, 2020 & 2021 were exceptional years for me, not only  because I gave birth to my fifth and sixth children in two years but also became a Certified Financial Planner at the end of 2020.

I have been very fortunate to be part of the CASCPA family since December 2014. I still remember attending the first CASCPA Christmas party during my eight-month pregnancy with a big heartfelt welcome from then-President Josephine Lam. I felt like a family member right on the spot. So I joined CASCAP immediately. Luckily, I also met my fellow member Tony C. Wong at the same event. Ever since then, he has become a good friend who offered me valuable advice on how to grow my start-up accounting practice back then. After participating in more events, I also began to connect with other colleagues and build new friendships in which I found my mentor MiaoLing Lin, CPA, a long-time board member of the CASCPA. Ryan Zhang was the president before me and shared much of his experience with me, from CPA practice management to CASCPA operations. In the past three years, due to the contribution & support of the board of directors and members, we made CASCPA a more active & stronger organization. 

I am very thankful to CASCPA. Members helping members is one of our core values at CASCPA.  I feel comfortable and always happy when joining our meetings and other CPE seminars/webinars and having dinner with my colleagues. Colleagues are always friendly and willing to offer to help. Whenever I have questions, I get answers and support from our members. Special thanks to Lam Mui, Tony Wong, Miaoling Lin, Ryan Zhang, Jean Chen, Andy Wang, Flora Si & Josephine Lam. They are always with me whenever I encounter problems with my practice & my daily life. 

I am on my way to pursuing more goals in my life: short-term and/or long-term. I’m a true believer in never giving up. So we can accomplish more and make our dream come true. 

Happy Holidays to all of my CASCPA colleagues and friends. 

Elaine Yanlin Yue, CPA CFP, YYL CPA P.C.  (516)829-6600  Great Neck NY