Go to Jeff Salisbury LWGate Home Page.From: "Shirley A. Humphrey" <sahumphrey@ucdavis.edu>
Subject: Re: persfin-digest V5 #138
Date: Tue, 27 Mar 2001 10:56:08 -0800
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I hope the answers to Ira's question on financial planning can be posted on
the web site. I think several people would be interested in the responses.
Thanks for your consideration.
shirley humphrey
At 12:03 PM 3/24/01 -0700, you wrote:
>persfin-digest Saturday, March 24 2001 Volume 05 : Number 138
>
>
>
>In this issue of the Personal Finance Digest:
>
> RE: persfin-digest V5 #137
> Roth IRA for minor
> ESTATE AND TAXES
> DEBTS
> Re: Roth IRA for minor
> Re: persfin-digest V5 #137
> Becoming a Certified Financial Planner
> RE: Big Time Debt Problem
>
>The messages posted to the Persfin-Digest are opinions and are not
>intended to substitute for qualified professional advice. Subscribers
>should seek the services of qualified professionals for such advice. The
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>
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>Copyright (c) 1999, Jeff Salisbury
>
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>----------------------------------------------------------------------
>
>Date: Thu, 22 Mar 2001 07:35:39 -0600
>From: "Steve Crossland" <steve@AustinLandlord.com>
>Subject: RE: persfin-digest V5 #137
>
>Has the Digest been reinstated?
>
>- -
>
>------------------------------
>
>Date: Thu, 22 Mar 2001 11:38:31 -0500
>From: Danny Shaw <Danny.Shaw@sas.com>
>Subject: Roth IRA for minor
>
>My wife has a S-corporate and currently she is the only employee of that
>company. Now, we are thinking to let the one-man-company hire my
>15-year-old son (10 - 15 hours per week) so that we can setup a Roth IRA
>for him. My questions is: what kind of document do we need for tax
>reason. For example:
>
>1. Does my son need any permission (from the Government) to be hired?
>2. Does my wife have to prepare any document?
>3. Need my wife to issue a W-2 Form to my son at the end of year?
>4. Do my wife and/or my son need to pay social security tax?
>5. Does my son have to file tax return individually at the end of the year?
>6. Any other things should we know?
>
>Any help would be greatly appreciated. Thanks in advance!
>
>Danny
>
>- -
>
>------------------------------
>
>Date: Thu, 22 Mar 2001 19:42:33 -0500
>From: BOB FORD <BOB_FORD@compuserve.com>
>Subject: ESTATE AND TAXES
>
>What a surprise to get this list. I thought the list was dead.
>At one time it was a very active list and had a lot of good people to
>give some excellent help to others. =
>
> =
>
> >>Date: Wed, 02 Aug 2000 11:08:14 -0400
> >From: Paul Slonaker <pes@burl.averstar.com>
> >Subject: Tax Liability for Deceased Mother-In-Law
> > =
>
> >My mother-in-law died earlier this year, leaving my
> >wife and her two sisters as beneficieries and co-executors.
> >(My father-in-law had died in 1995.) She died in Florida,
> >which was her primary residence (she spent about half of the
> >year in New York). My questions have to do with her tax
> >liability.
> > =
>
> >For many years, starting well before my father-in-law's
> >death in 1995, my in-laws did not even file a Federal tax
> >return, having been advised by an accountant that their
> >income was low enough. My MIL continued this practice
> >after my FIL died. As far as I know, she did not file
> >returns for either New York or Florida as well. But when
> >I looked through her financial papers and found 1099 forms
> >for 1999 and 1998, it seemed to me that her income was
> >indeed high enough that she would have had to file - and would
> >have owed taxes. To be precise, for 1999 she had interest
> >and dividend income of about $10,400; after subtracting the
> >standard deduction ($4300) and exemption ($2750), she would
> >have owed about $500 at 15%. Her situation in 1998 was similar.
> > =
>
> >My questions:
> > =
>
> >1. Is my analysis correct? This seems very straightforward,
> >but I may be overlooking something.
> >
>
>I am not an attorney or tax pro but to determine if any tax was owed, you=
>
>need a lot more =
>
>information. Such as was any of the interest from tax exempt bonds (stat=
>e
>and municipal)?
>You also need to know if any estimated tax was paid. Were there some
>losses on stocks and/or
>mutual funds? =
>
> >>
> >2. What's the liability of the beneficiaries/executors? It
> >seems to me that the estate is liable for any back taxes and
> >penalties. If the estate doesn't pay them, are the
> >beneficiaries/executors individually or jointly liable?
>
> >
>
>There may be both state and federal back taxes due. However state laws
>differ so you should
>consult a tax person and probably an attorney in the state of residence. =
>
>In general the estate is
>liable for all debts of the person that died. The executor may be
>personally liable if estate debts
>are not paid and there are assets to pay them. Where it really gets
>interesting is when there are
>more debts than assets. When that happens you MUST get legal advice.
>
> >> =
>
> >3. How far back are we liable? It seems to me that we could
> >be liable for taxes owed by my MIL since my FIL's death, but
> >(I hope) not before that. My BIL, who was the executor for my
> >FIL's estate, claims that the lawyer who handled the estate did
> >not file a Federal income tax return. (It's also possible that
> >their/her tax situation changed sufficiently at his death that
> >she owed taxes afterward but they would not have owed taxes
> >before.)
> > =
>
>State and Federal tax laws differ on the length of time a person is liabl=
>e
>for taxes
>that have not been paid. I THINK federal rules are the IRS can go back 6=
>
>years if
>no tax return has been filed. =
>
> >>
> >4. Roughly speaking, how likely is it that this would ever
> >come back to haunt us? My SIL's are all for ignoring this
> >in hopes that we'll never be called on it. I think that that's
> >irresponsible, but I think that they would only be convinced
> >of this if they thought there could be major repercussions
> >later.
> > =
>
> >Thanks for your attention.
> > - -- Paul Slonaker
> >> =
>
>No one can answer the question, "Will I get caught not paying taxes that
>are due?".
>If you want to sleep at night, I strongly urge you to get professional ta=
>x
>and legal help.
>
>BOB FORD
>BOB_FORD@COMPUSERVE.COM
>
> =
>
>- -
>
>------------------------------
>
>Date: Thu, 22 Mar 2001 19:42:35 -0500
>From: BOB FORD <BOB_FORD@compuserve.com>
>Subject: DEBTS
>
> >>
> >Date: Thu, 22 Mar 2001 07:46:48 -0500
> >From: Jack Schnapper <jack@kajor.com>
> >Subject: Big Time Debt Problems
> > =
>
> >Due to circumstances that I am certain are familiar to some of you I hav=
>e
> >gotten myself (as well as my wife) very deep in debt. Of course we have=
>
> >the first mortgage and then the second mortgage that I took out to pay o=
>ff
> >all the plastic.
> =
>
> >Well, I didn't learn my lesson and got right back up there (actually muc=
>h
> >more) and my employment situation changed, greatly reducing our income. =
>
>So
> >here we sit owing an enormous amount of unsecured debt (plastic plus
> >checking account overdraft line of credit).
> =
>
> >Recently I have been hearing from several of the credit card companies
>that
> >they are very close to charging off our account as a bad debt. They the=
>n
> >go on to tell me that they may still turn it over (or sell it) to a
> >collection agency or attorney to try to collect whatever they can. I ha=
>ve
> >been told that they could possibly file a lien against our house or even=
>
> >force us into bankruptcy. Our house has inflated quite a bit since we
> >bought it 14 years ago and in our state (Maryland) only $7,500 in equity=
>
>is
> >protected. We have quite a bit more equity than that. We have consider=
>ed
> >refinancing but our credit scores are so bad that the best rate we can
> >expect to get is @ 10% or more. Our existing first mortgage is a 15 yea=
>r
> >fixed rate loan (6.375%) with @ 7 years to go. Our second mortgage is f=
>or
> >30 years at @ 9.25%.
> =
>
> >If a credit card company writes off our account (and, from what I
> >understand, deduct that amount from their income for tax purposes as a b=
>ad
> >debt) can they still sell it to someone who will then harass and threate=
>n
> >us and possibly force us to either sell our house or to file for
>bankruptcy?
> > =
>
> >I'd appreciate it if replies can be sent via email to jss@mailzone.com a=
>s
> >well as posting them here for others to see.
> > =
>
> >Thanks,
> >Jack
> =
>
>JACK
>
>I am not an attorney and this is not legal advice.
>
>A debt is always a debt until it is paid. It does not make any differenc=
>e
>what the credit card
>company does with the debt. You will always owe it unless it is forgiven=
>
>by the creditor or it is
>paid. A forgiven debt is income to you and you must pay income tax on the=
>
>amount that was
>forgiven. However, I have never heard of a credit card company forgiving=
> a
>debt.
>
>A creditor can not harass and threaten you. They can simply ask you to
>pay the debt. They can
>even get a lien on you house. State laws are different but in most state=
>s
>a creditor can not force
>you to sell your house to satisfy a lien. No one can force you to file
>bankruptcy. There is a form
>of bankruptcy called involuntary bankruptcy. It is possible but very
>unlikely that a creditor will
>do that to a person. It is usually done to a business.
>
>You don't go to jail for not paying a debt unless you own to the
>government. You just get a bad
>credit report which means you will have a hard time getting credit in the=
>
>FUTURE.
>
>However in your situation , this is probably good. You have got to learn=
>
>to live within your
>income. From a creditor's position, granting credit is a business
>decision. They know some
>people will not pay what is owed. The just sell these debts for what the=
>y
>can get for them and
>move on. You could if you wanted to, treat credit as a business decision=
>
>also. You could just not
>pay. I do not know if this is the best thing to do in your situation. I=
>f
>you can do without
>additional credit for 7 years, these debts will be erased from your credi=
>t
>record.
>
>A word of caution about your mortgage. You have a low rate first and
>second mortgage. Keep
>paying the monthly payments on your mortgages. If you don't pay them, yo=
>u
>will loose your
>house in a foreclosure.
>
>GOOD LUCK
>BOB FORD
>BOB_FORD@COMUSERVE.COM
>
>- -
>
>------------------------------
>
>Date: Fri, 23 Mar 2001 07:41:28 -0700
>From: Jeff Salisbury <Jeff.Salisbury@WallStreet-LLC.com>
>Subject: Re: Roth IRA for minor
>
>Danny,
>
>Your son needs to formally be put on the payroll, pay all the associated
>payroll taxes, and file an tax return. You don't need any other
>government permission or documents. If he earns $2k or more in the
>year, he can save up to $2K into his Roth IRA...
>
>Jeff
>
>Danny Shaw wrote:
> >
> > My wife has a S-corporate and currently she is the only employee of
> that company. Now, we are thinking to let the one-man-company hire my
> 15-year-old son (10 - 15 hours per week) so that we can setup a Roth IRA
> for him. My questions is: what kind of document do we need for tax
> reason. For example:
> >
> > 1. Does my son need any permission (from the Government) to be hired?
> > 2. Does my wife have to prepare any document?
> > 3. Need my wife to issue a W-2 Form to my son at the end of year?
> > 4. Do my wife and/or my son need to pay social security tax?
> > 5. Does my son have to file tax return individually at the end of the year?
> > 6. Any other things should we know?
> >
> > Any help would be greatly appreciated. Thanks in advance!
> >
> > Danny
> >
> > -
>
>- -
>
>------------------------------
>
>Date: Fri, 23 Mar 2001 07:42:02 -0700
>From: Jeff Salisbury <Jeff.Salisbury@WallStreet-LLC.com>
>Subject: Re: persfin-digest V5 #137
>
>Hi Steve,
>
>It never was eliminated. It's just that people stopped posting...
>
>Jeff
>
>Steve Crossland wrote:
> >
> > Has the Digest been reinstated?
> >
> > -
>
>- -
>
>------------------------------
>
>Date: Fri, 23 Mar 2001 10:55:43 -0500
>From: "Ira Krakow" <ikrakow_1999@yahoo.com>
>Subject: Becoming a Certified Financial Planner
>
> I am thinking of changing careers and becoming a Certified Financial
>Planner. My goal is to do fee-only financial planning because I don't want
>to be seen as a salesperson hawking only the investments that generate
>commissions. I would like to work impartially for the client.
>
> I'm approaching retirement age and would like to specialize in retirement
>and estate planning. The reason for that is not only that I'm personally
>interested in this but I think there is a large market (baby boomers) who
>will be retiring fairly soon.
>
> I've looked at the College of Financial Planning course - you can take it
>over the Web - but I'm not sure if that's the best way to get into the
>field. Is it better to get the CFP credential first and then get an
>apprenticeship and/or hang out your shingle, or get some job experience
>first? I've also thought of combining this with the H&R Block tax course to
>get a more in-depth understanding of taxes.
>
> Any CFPs or others who have any insight, please post to the list or email
>me at ikrakow_1999@yahoo.com.
>
>Thanks.
>Ira
>
>
>_________________________________________________________
>Do You Yahoo!?
>Get your free @yahoo.com address at http://mail.yahoo.com
>
>
>- -
>
>------------------------------
>
>Date: Sat, 24 Mar 2001 11:49:13 -0700
>From: "Diane Howe" <diane@jeeptech.com>
>Subject: RE: Big Time Debt Problem
>
> >Due to circumstances that I am certain are familiar to some of you I have
> >gotten myself (as well as my wife) very deep in debt.
>
>Jack-
>I'm afraid that your experience may be a trend
>in this day of overspending and undersaving.
>Recently, I read the term "money is a drug" which
>can be expanded to say "spending is a drug". Are
>you ready to kick the habit?
>
>If so, get yourself to a debt counselor. There
>are many volunteer, non-profit, debt counseling
>services out there - look in the phone book.
>It's not necessary to pay for this service.
>
>Some of the things that a debt counselor will
>work with you on are things like:
>- - Negotiating the repayment of your debt with
> those you are indebted to
>- - Cutting up your credit cards, perhaps saving
> one tucked away in a drawer and never used.
>- - Paying cash for everything
>- - Budgeting and looking for ways to reduce spending.
> For example, do you really need the deluxe cable
> package or pricy gym membership?
>- - Reducing the stuff accumulated from the spending
> splurge. Can you sell some of this stuff? Maintaining
> "stuff" is an expensive habit.
>
>Good luck to you on this road of recovery.
>
>- -Diane Howe
>
>- -
>
>------------------------------
>
>End of persfin-digest V5 #138
>*****************************
>
>-
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