Lawrence T. Ullmann, Attorney At Law Tax Attorney Walnut Creek | Tax Lawyer | Estate Planning 2026-06-05T08:53:02Z https://www.lawrencetullmann.com/feed/atom/ WordPress On Behalf of Lawrence T. Ullmann, Attorney At Law <![CDATA[What tax records should you keep before selling your CA home?]]> https://www.lawrencetullmann.com/?p=46810 2026-06-05T08:53:02Z 2026-06-05T08:53:02Z 1. Purchase and closing documents Keep your original closing statement, purchase contract, escrow documents, legal fee records and transfer tax documents. These verify the home’s purchase price and the specific costs paid when you acquired the property.

2. Improvement and repair records

Save receipts, invoices and permits for major projects, such as additions, remodels, roof replacements or solar installations. These costs may increase your basis, which is the original purchase price plus the cost of capital improvements made over the years. Keep routine repair records separately, as ordinary maintenance usually does not increase basis or lower taxable profit.

3. Primary residence proof

Federal and state laws allow you to exclude up to $250,000 in profit, or up to $500,000 if you are married and filing a joint tax return, if the home was your main residence for at least two of the five years before the sale. Maintain proof of residency, such as utility bills, tax returns or insurance documents listing the home as your primary address.

4. Sale, escrow and withholding documents

California requires sellers to complete Form 593. Save your escrow file, final closing statement and sale expense documents so you can see what was withheld and what you may need to report to tax authorities.

5. Inheritance, trust and appraisal documents

If you inherited your home or it was transferred through a trust, keep appraisals, estate documents and transfer records. These files establish the property’s value and ownership history.

Protect your sale from tax surprises

Keep these files for at least four years after filing the return. Save them longer if the sale involves inherited property, missing documents or complex ownership history. If questions come up later, organized documents can make it easier to explain how the sale was reported. If you are unsure how your records affect your tax position, professional guidance can help clarify the issues before closing.]]> On Behalf of Lawrence T. Ullmann, Attorney At Law <![CDATA[Is your parent’s outdated trust a tax time bomb?]]> https://www.lawrencetullmann.com/?p=46808 2026-03-02T16:51:45Z 2026-03-02T16:51:45Z The loss of the second step-up in basis Many trusts written two decades ago used a mandatory "AB" split to avoid federal estate taxes. While this was standard then, it often creates a disadvantage for heirs today. Under this structure, assets in the "B" trust receive a step-up in basis at the first spouse's death but do not receive a second step-up when the surviving spouse passes. This oversight can lead to significant capital gains taxes when you eventually sell the family home.

Property tax reassessment and Proposition 19

California real estate laws shifted dramatically with the passage of Proposition 19. If you do not move into your parents' home as your primary residence within one year, a full property tax reassessment is mandatory. No amount of trust language can bypass this constitutional requirement. A modern review is essential to identify these risks and help your family decide if keeping a property is financially viable under these strict residency rules.

Navigating the new Medi-Cal asset rules

As of Jan. 1, 2024, California eliminated the asset limit for Medi-Cal eligibility. This means an outdated trust's lack of "asset protection" language is no longer a barrier to your parents qualifying for care. However, the trust must still be reviewed to protect against estate recovery after they pass. Ensuring a plan accounts for current tax law is the only way to safeguard what remains of the estate.

Secure your family legacy with a modern plan

A trust is not a static document. It is a tool that must evolve alongside changing legal environments. Taking the time to analyze these complex puzzles now prevents expensive legal surprises during an already difficult time. Professional guidance helps clarify how current regulations impact your specific real estate law concerns or inheritance goals.]]> On Behalf of Lawrence T. Ullmann, Attorney At Law <![CDATA[Does canceled debt affect your tax return?]]> https://www.lawrencetullmann.com/?p=46807 2025-12-11T15:42:48Z 2025-12-11T15:42:48Z When a lender forgives or cancels a debt, the relief may feel huge. However, many people in California are surprised to learn that canceled debt may be taxable income. This surprise often appears when they file their tax return. Understanding how the IRS and the state treat canceled debt helps you plan ahead and avoid unexpected tax bills.

Why canceled debt may count as income

When you borrow money, you promise to pay it back. If a lender later cancels the loan, the law treats the unpaid amount as money you gained. The IRS calls this cancellation of debt (COD) income. A lender may send you a Form 1099-C to show the amount of debt it forgave. The IRS and the California Franchise Tax Board (FTB) use this form when they review your tax return. The FTB usually receives the same information from the IRS through its sharing system. The government treats canceled debt as a benefit because it improves your financial situation. This treatment may raise your taxable income for the year. This can happen with credit cards, medical bills, personal loans and even some home loans.

When canceled debt may not be taxable

Some situations allow you to avoid paying tax on forgiven debt. Debt canceled in bankruptcy does not count as income. If you live in insolvency—meaning you owe more than you own—you may qualify for relief as well. California residents also follow a few special rules:
  • Anti-deficiency laws: These laws protect many homeowners. For certain foreclosures or short sales of a main home with a purchase-money loan, California law often prevents COD income from forming in the first place.
  • Federal vs state rules: The Federal government offers an exclusion for some forgiven mortgage debt. California does not always match that rule, so you may avoid Federal tax but still owe state tax.
To use any of these exceptions, you must meet the legal requirements and file the correct forms.

How getting support may help

Canceled debt often creates confusion because Federal and California rules do not always match. A tax attorney may help you understand how these rules apply to your situation and what steps may help you avoid problems. This kind of support may give you more peace of mind at tax time.]]> On Behalf of Lawrence T. Ullmann, Attorney At Law <![CDATA[How do you choose a power of attorney for your estate plan?]]> https://www.lawrencetullmann.com/?p=46806 2025-09-10T13:29:07Z 2025-09-10T13:29:07Z An estate plan often includes naming someone to act on your behalf if you cannot make decisions. In California, a power of attorney gives a trusted person the authority to handle financial or personal matters. Choosing the right person is one of the most important steps in protecting your future.

Understand the role of a power of attorney

A power of attorney allows someone to make decisions on your behalf. This may include managing bank accounts, paying bills, handling property, or overseeing investments. Depending on the type of power of attorney, their authority can be broad or limited to certain tasks.

Look for trustworthiness and responsibility

The person you choose should be reliable, organized, and willing to act in your best interest. Since they may have control over finances and property, honesty and responsibility are essential qualities. Many people select a close family member or trusted friend who understands their values.

Consider their financial knowledge

Managing money is often part of the role, so selecting someone with good financial sense can make a difference. While they do not need to be an expert, it helps if they understand budgeting, record-keeping, and basic money management. This ensures decisions are handled carefully and with confidence.

Think about availability and commitment

A power of attorney may need to step in on short notice. Choosing someone who has the time and willingness to take on the responsibility helps avoid stress later. It is also wise to confirm that the person is comfortable with the role before naming them.

Planning with peace of mind

Selecting a power of attorney for an estate plan requires thought and care. By knowing what things to focus on, it becomes easier to choose someone who will act with integrity and support long-term goals.]]> On Behalf of Lawrence T. Ullmann, Attorney At Law <![CDATA[What are the steps to resolve property boundary disputes in CA?]]> https://www.lawrencetullmann.com/?p=46805 2025-06-17T17:04:29Z 2025-06-17T17:04:29Z Property boundary disputes are common in California, given its diverse real estate landscape. If you face such a dispute, handling it properly is crucial to avoid lengthy legal battles. Here’s how to resolve a property boundary dispute in California.

Step 1: Review property documents

Start by reviewing all relevant property documents, such as your deed, title, and land surveys. These documents show the legal description of your property lines. If you don't have a survey, consider hiring a licensed surveyor to clarify any uncertainty.

Step 2: Discuss the issue with your neighbor

Try to resolve the issue through direct communication with your neighbor. Often, these disputes arise from misunderstandings that can be addressed through a friendly conversation.

Step 3: Hire a licensed surveyor

If you and your neighbor can’t agree, hiring a licensed surveyor is a good next step. A surveyor can establish the exact boundaries of your property, and their findings can help resolve the dispute.

Step 4: Mediation or alternative dispute resolution (ADR)

If negotiation doesn’t work, mediation or ADR may help. These processes involve a neutral third party who assists in reaching an agreement without going to court.

Step 5: File a lawsuit

If all else fails, filing a lawsuit is the final option. The court will review all documents, survey results, and evidence to determine the boundaries. However, this can be costly and time-consuming.

Resolving property boundary disputes

Most property boundary disputes can be resolved without court intervention by using clear documentation, communication, and professional mediation. However, California courts are available if needed.]]> On Behalf of Lawrence T. Ullmann, Attorney At Law <![CDATA[What are the key tax considerations for small business owners?]]> https://www.lawrencetullmann.com/?p=46804 2025-03-24T21:33:34Z 2025-03-24T21:33:34Z Starting a small business involves many exciting steps, but it also comes with important tax responsibilities. Understanding these responsibilities can help a business owner save money and avoid problems with the IRS. This blog post will discuss some key tax considerations for small business owners.

Choosing a business structure

A business's structure affects how it pays taxes. Common structures include sole proprietorships, partnerships, limited liability companies (LLCs), and corporations. Each structure has different rules for how the IRS taxes profits and losses. For example, the IRS taxes sole proprietorships and partnerships differently than corporations. It is important to select the structure that fits the business's needs and tax situation.

Deductions and credits

Small business owners can lower their taxable income by taking deductions. A deduction lowers the amount of income that the business pays taxes on. Common deductions include business expenses, such as rent, supplies, and salaries. Tax credits also benefit small businesses. A tax credit directly reduces the amount of tax owed. Business owners should keep careful records of all income and expenses. Good records will help them claim all the deductions and credits they can.

Estimated taxes

Unlike employees, small business owners often do not have taxes withheld from their income. Instead, they may need to pay estimated taxes throughout the year. These payments usually occur quarterly. The amount of estimated tax depends on the business's expected income. Paying estimated taxes on time helps business owners avoid penalties.

Self-employment tax

In addition to income tax, many small business owners must pay self-employment tax. This tax covers Social Security and Medicare taxes. Employees and employers usually split these taxes, but self-employed individuals pay both portions. Self-employment tax applies to profits from sole proprietorships, partnerships, and some LLCs.

Record keeping

Accurate and organized records are essential for small business owners. Businesses must track all income and expenses. This includes receipts, invoices, and bank statements. Good records make it easier to file taxes correctly. They also help a business owner understand the business's financial health. Small business owners face unique tax situations. Understanding these key considerations can help them manage their tax responsibilities effectively.]]> On Behalf of Lawrence T. Ullmann, Attorney At Law <![CDATA[What are the benefits of creating a trust?]]> https://www.lawrencetullmann.com/?p=46803 2024-12-28T23:50:48Z 2024-12-28T23:50:48Z A trust serves as a powerful financial and legal tool to manage assets effectively. It allows individuals to specify how they distribute and manage their property during their lifetime or after their death. Trusts provide several unique advantages that make them an essential component of estate planning.

Asset protection

A trust protects assets from potential lawsuits, creditors, or other financial risks. By placing assets in a trust, individuals ensure that their property remains intact and preserved for future generations. Irrevocable trusts, in particular, separate the assets from the grantor’s personal ownership, reducing vulnerability to legal claims.

Avoiding probate

A trust bypasses the often lengthy and costly probate process. Probate validates a will and oversees the distribution of assets through a court procedure. Trusts enable the direct transfer of property to beneficiaries, eliminating the need for court involvement. This approach saves time, reduces legal expenses, and allows beneficiaries quicker access to their inheritance with fewer complications.

Ensuring privacy

A trust keeps estate details private, unlike wills that go through probate and become public records. When families use a trust, the estate’s distribution, assets, and beneficiaries remain confidential. This privacy protects families from unnecessary scrutiny and secures their financial affairs. Establishing a trust empowers individuals to take control of their financial legacy. With careful planning, trusts help ensure a seamless transfer of wealth, reduce unnecessary complications and provide peace of mind for both the grantor and their loved ones.]]> On Behalf of Lawrence T. Ullmann, Attorney At Law <![CDATA[How should you plan for the care of pets in an estate plan?]]> https://www.lawrencetullmann.com/?p=46802 2024-09-16T13:47:07Z 2024-09-17T13:46:45Z Estate planning often focuses on human beneficiaries, but pets also deserve proper care after an owner’s passing. Including pets in an estate plan ensures they receive care and protection according to the owner’s wishes.

Designate a pet guardian

The first step in planning for a pet is naming a trusted person as the pet’s guardian. This individual will assume responsibility for the pet’s care, so it’s important to choose someone who is both capable and willing to take on this role. Discuss this decision with the chosen guardian in advance.

Set aside financial resources

Providing financial resources for a pet’s care can help alleviate the guardian’s burden. This can be achieved by setting up a pet trust. A pet trust allocates funds specifically for the pet’s needs, covering food, veterinary care, grooming, and other expenses. The trust also appoints a trustee to manage the funds and ensure they are used appropriately.

Include detailed care instructions

Every pet has unique needs. Including detailed care instructions in the estate plan helps ensure that the pet continues to receive the same level of care as before. This may include information about the pet’s diet, exercise routine, medical conditions, and favorite activities.

Regularly update the plan

As circumstances change, so should an estate plan. Owners should regularly update their plans to reflect changes in their pet’s needs, the guardian’s availability, or financial resources. This ensures the pet’s well-being remains protected throughout its life. Planning for pets in an estate plan offers peace of mind, knowing that beloved animals will be well cared for, even when the owner can no longer provide for them.]]> On Behalf of Lawrence T. Ullmann, Attorney At Law <![CDATA[The impact of preservation laws on California real estate]]> https://www.lawrencetullmann.com/?p=46801 2024-06-20T19:44:40Z 2024-06-20T19:44:40Z Preservation laws play a crucial role in maintaining the cultural and historical landscape of a community. Understanding these regulations can significantly influence real estate projects, from planning to execution.

How preservation laws shape development

California's approach to historic preservation includes several rules under real estate law. These rules help balance new construction with the protection of historic sites.
  • California Environmental Quality Act (CEQA): The act makes state and local agencies check the environmental impacts of their projects. They must also share these impacts with the public.
  • California Historical Building Code (CHBC): This code governs the restoration and preservation of buildings. It also deals with relocating them. The code aims to keep preservation safe, cost-effective, and sustainable.
Real estate developers often go through a detailed review process. They must do this before they can alter or tear down historic structures. The process involves checking how historically significant a property is. It also involves talking to local preservation boards.

The benefits of compliance

Following historic preservation laws has many benefits for developers. It can increase the value of a project by keeping unique architectural features in the marketplace. These features draw buyers looking for one-of-a-kind properties.  Also, following the rules can qualify developers for financial perks like tax credits, grants, or fee reductions. Developers use these benefits to help pay for the costs of keeping and fixing historic properties.

The challenges developers face

The advantages are clear, but the laws also pose challenges. Developers might see longer project times and higher costs. These arise from tough review processes and the need for special building techniques. Additionally, limits on changes or demolitions can restrict how flexible designs and space uses can be.

Reflections on preservation and development

Balancing historical preservation with modern development requires thoughtful consideration and planning. By respecting the past while accommodating the needs of the present, developers can create spaces that are both meaningful and functional.]]> On Behalf of Lawrence T. Ullmann, Attorney At Law <![CDATA[Tax implications of remote work]]> https://www.lawrencetullmann.com/?p=46800 2024-03-25T22:20:14Z 2024-03-25T22:20:14Z State tax obligations One of the biggest surprises for remote workers can be the tax obligations in different states. If you live in one state but work for a company based in another, you might need to file tax returns in both states. This depends on the states' specific tax laws and agreements.

Home office deductions

Remote workers often set up a home office, but not everyone knows they might qualify for home office deductions. To qualify, the space must be exclusively for work and meet certain conditions. This can include a portion of rent, utilities and internet costs.

Equipment and supplies

Remote workers might also deduct expenses for work-related equipment and supplies. This can include computers, software and office supplies. Keep detailed records and receipts for all work-related purchases.

Internet and phone expenses

A portion of internet and phone expenses related to work might be deductible. However, only the expenses directly related to work activities qualify, not the entire bill.

Understanding tax credits

Remote workers should also be aware of various tax credits they might be eligible for. These credits can significantly reduce tax liability. For example, the Earned Income Tax Credit can benefit workers with lower incomes.

Avoiding double taxation

Remote workers should take steps to avoid double taxation. This can happen when different jurisdictions try to tax the same income. Keeping detailed records and understanding tax treaties and agreements can help.

Seeking advice

Tax laws can be complex, and they change frequently. Remote workers should consider seeking advice from tax professionals to navigate the specific rules and opportunities related to their situation. The rise of remote work offers flexibility and new opportunities, but it also brings additional challenges related to taxes. Understanding how taxes impact them can help remote workers make informed decisions and avoid unexpected tax bills.]]>