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back taxes for dissolved corporation?

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isis_2005

Junior Member
What is the name of your state?State: NY (NYC)
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My sisters and I inherited a commercial property in NYC after our mother passed away. The deed is held by my mother's corporation (which was registered in 1995 and she was 100% shareholder), but the corporation was dissolved in 1999 by NYC due to non-filing of taxes. The property didn't generate income, it was simply held and used as her personal office. She did maintain a bank account after the corporation was dissolved, but the balance was kept below $1000.

My sisters and I are beneficiaries of the estate and would like to gain ownership of the property. Will we have to file back taxes for the years the corporation was inactive? Is there another way to legally acquire the deed for the building? We were thinking of starting our own corporation so that we can start fresh for IRS filings.

Thanks for any advice.

Sara
 


abezon

Senior Member
If the corp was dissolved for not filing its tax returns, then your mother was the owner (as the single shareholder) & you kids inherited from her. The building will need to go through probate, & the executor will transfer title to you during that process.

You'll have to start your own corp, since there is no existing corp. Why do you want to start a corp & what will you do with the bldg?
 

isis_2005

Junior Member
Abezon - thank you so much for your advice! Do you know if we, as administrators, can transfer the deed to me & my sisters without paying back corporate taxes? Or will NYS and NYC realize they are due when the title is transferred out of a defunct corporate entity?

We're thinking about renting space in the building, which is why we want to get the title settled and a new corporation started.

Thanks again,
Sara
 

LdiJ

Senior Member
isis_2005 said:
Abezon - thank you so much for your advice! Do you know if we, as administrators, can transfer the deed to me & my sisters without paying back corporate taxes? Or will NYS and NYC realize they are due when the title is transferred out of a defunct corporate entity?

We're thinking about renting space in the building, which is why we want to get the title settled and a new corporation started.

Thanks again,
Sara

What back taxes are you referring to? In all honesty, you probably need to consult a probate attorney...and perhaps a tax attorney if there really are back taxes. I think that you may be making things unnecessarily complicated in your minds....however you may not be...an attorney can sort that out more quickly.
 

isis_2005

Junior Member
LdiJ - thanks for your response, I didn't think of consulting with a probate or tax attorney and that's a great idea. We consulted with a real estate attorney who felt that because corporate taxes were never paid/filed, we'll need to do that in order to transfer the deed or the IRS/state will hold a lien on the property. The property didn't generate income, but because my mom never filed taxes (leading to the state's dissolution of the corporation), we may face paying back taxes, interest, and penalties back to 1995 - the attorney thinks it could be $10K or more.

Thanks again!

Sara
 

abezon

Senior Member
Get a different attorney. First, once the state dissolved the corp, the corp didn't exist anymore & had no obligation to file a tax reutrn every year. Second, I suspect you could file any necessary back returns by simply filling out the header & signature portion of each year's return & writing "No activity in _____" across the return. Third, even in years when the corp did exist, it had no income & therefore could not have owed any *income* tax. Fourth, any interest & penalties are based on the amount of tax owed. Since there was no income, the tax is $0 & the interest & penalties are some percentage of $0. A-Ha! A golden opportunity to teach your kids the practical value of math -- have them calculate various percentages of $0 for each outstanding tax year, add the results up, & multiply by 17. That's how much you'll owe. ;)

The only lien problem I see is if no one paid the property taxes. Those will have to be paid by the estate.
 

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