Dr. Friday Radio Show – October 31, 2020

Another episode of the Dr. Friday Radio Show is here! In this episode, Dr. Friday answers all the caller's questions:

• Check The SBA If You're Selling A Business That You Received PPP Money On
• Cares Acts Deadline
• Who You Vote For President Will Affect Your Taxes
• Why You Need Help With Tax Representation
• If I Gift A House, Do I Pay Taxes On It?
• Get Forgiveness For PPP Loan
• Can Entrepreneurs' Taxes Be Forgiven After 10 Years?

and other callers' questions! Transcript Announcer 0:01 No, no, no, she's not a medical doctor, but she can sure cure your tax problems or your financial woes. She's the how-to girl. It's the Dr. Friday show. If you have a question for Dr. Friday, call her now at 615-737-9986. So here’s your host financial counselor and tax consultant, Dr. Friday. Dr. Friday 0:30 Good day, I'm Dr. Friday. It is an awesome Saturday here at two o'clock on this wonderful Saturday and the weather. It's Halloween people, this is a great time of the year. But you know what, we have to talk about a few different things. One, PPP. I had a situation that came into my office for all of you that may have applied or received PPP money, this may be something you may have to face. This particular person was in the process of wanting to sell the business. But they had received PPP money. So actually the SBA did release and we found out some pretty interesting information. So if you're in the process of selling a business that you did get PPP money on, very important that you go and you check out the SBA, what you need to do, because it's not just a matter that you can now sell that business because you want to, there are some rules and even possibly pay back that loan, because it's not going to be with the same owner. So very, very important that we do that. All right. Well, we've already got somebody on the line, and I believe it's Steve in Cooksville. Caller 1:44 Yes, I was gonna ask I have a couple of annuity. They use of term qualified nonqualified. Just wondering, about the one that's not the right base type of annuity. What would be the difference in having an annuity that you could have just a regular life savings account? You know, if it's one that they talk about free money? On the statement, I could take out so much money, cash before the penalty. And I thought as long as I stay below it Is there much different than withdrawing as far as tax-wise? Dr. Friday 2:21 As you said, Steve, if it's not in an IRA situation, but it's with an after-tax investment, you're allowed once a year to take the money out a certain dollar amount without penalty from the annuity, you will pay on the tax first, most annuities take out the growth of the annuity first, leaving the original investment in there. So later on, you'll eventually if you take it all out, we'll eventually have that. So the biggest difference will be is that if you've had, let's just say you're taking $5,000 out and it's and you've had 5000 in that year of growth, you're gonna pay tax on all $5,000. Caller 3:02 I know I'm sounding stupid here. But, when I get my statement ready to file for IRS, does it show how much or if that's something totally taxable all the way or? Dr. Friday 3:14 Right, they're gonna give you that information, to be honest. You're gonna receive a form called the 1099 R and in box one, it's going to show the total distribution and in box two, it's going to show the taxable amount, doesn't mean they're going to match. Theoretically, box five would be the difference. So just as a point of interest, yeah, you'll find out from them what they're going to consider taxable and what's not taxable. Caller 3:35 But I'm still glad I called because I definitely learned something there because I did. I wondered how that worked. An