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Subject: persfin-digest V4 #19
Date: Tue, 8 Apr 1997 21:26:47 -0400 (EDT)
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persfin-digest Tuesday, April 8 1997 Volume 04 : Number 019
IN THIS ISSUE:
ADVERTISEMENT: MCI CONNECT FOR CC:MAIL [Oppenheimer Software <Connect-Sa]
PERSFIN-DIGEST TO BE FEATURED IN WALL STREET JOURNAL INTERACTIVE [The Edi]
maximum 401(k) contribution? ["Cathy Steinberg" <CSTEINBE@us.oracle.com>]
Talking to the IRS [Frank Wagner <wagner@ececs.uc.edu>]
Rental write-offs? [chris kalka <ckalka@tgn.net>]
Re: Jonathan Pond [Michael Remily <remily@open.org>]
Should I Buy a Formerly Leased Car? [Michael Remily <remily@open.org>]
Re: Unemployment Compensation & Taxes [FW & SC <kafer@crl.com>]
Funding Source for Paying Students To Come To Class? [Marty Turnauer <mtu]
RE:Protecting Real Estate Against Creditors? [Keith Mealy <kmealy@cincom.]
Fidelity Is Out Of Style [David Meyers <dmeyers@panix.com>]
Re: Protecting Inheritance? Why? ["Russell J. Foster" <RFoster@specgrp.co]
How Do I Handle Mortgage Refinance In Quicken? [Kurt Nosack <KNOSACK@nove]
International Student Needs Financing Proof for Student Visa ["David J. C]
Ira Should Get the Amazon IPO Prospectus ["Barry H. Rodin" <brodin@pica.a]
Historical Stock or Mutual Fund prices? ["Jackson, Anthony D." <JacksAD1@]
Gold Coin Buying Tips? [Susan Mangiero <mangiero@shu.sacredheart.edu>]
Estimated Tax Question? [Paul Fan <fan@math.ucla.edu>]
Re: How Do I Evaluate Title Insurance Policies? [themerc@juno.com (The Me]
Callable Cds ? ["Wall, Steven" <walls@phibred.com>]
Capital Gains Question - Separate Rate? [lspoto@frk.com (Spoto, Leonard)]
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Date: Tue, 8 Apr 1997 19:33:16 -0400 (EDT)
From: Oppenheimer Software <Connect-Sales@mcimail.com>
Subject: ADVERTISEMENT: MCI CONNECT FOR CC:MAIL
MCI Connect for cc:Mail
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------------------------------
Date: Tue, 8 Apr 1997 19:38:12 -0400 (EDT)
From: The Editor <ikrakow@shore.net>
Subject: PERSFIN-DIGEST TO BE FEATURED IN WALL STREET JOURNAL INTERACTIVE
Persfin-Digest is scheduled to be featured in the "Cyber Investing"
column of the interactive edition of the Wall Street Journal - at least
that's what the columnist told me. The feature is scheduled for this
Friday.
Since I don't subscribe to the Wall Street Journal (interactive or paper
edition), I would appreciate it if someone who subscribes looks for the
column this Friday and forwards a copy to me. Thanks a bunch!
Ira
PS: The URL Is: http://www.wsj.com but you have to pay to subscribe
(unlike Persfin-Digest, the WSJ enforces the rule!).
------------------------------
Date: Tue, 8 Apr 1997 19:42:11 -0400 (EDT)
From: "Cathy Steinberg" <CSTEINBE@us.oracle.com>
Subject: maximum 401(k) contribution?
Greetings, Digesters--
I have a simple question about 401(k) contributions. I know that you're
allowed to contribute $9,500 or 15% of your salary per year to your 401(k)
account. Here's the question: Suppose your employer makes an additional
contribution to your account such that the total figure exceeds $9,500. Is
this a problem, or can you contribute $9,500 of your own money PLUS your
employer's contribution without fear of getting hit with penalties? Or is
the total contribution--yours PLUS your employer's--not to exceed $9,500?
Thanks in advance!
Cathy
------------------------------
Date: Tue, 8 Apr 1997 19:43:07 -0400 (EDT)
From: Frank Wagner <wagner@ececs.uc.edu>
Subject: Talking to the IRS
A friend of mine declared bankruptcy in 1987, but was stuck with a $2000
income tax bill. After a few years he has been able to start paying it
off, at $25 a month. Now the bill is $3000.
It seems to me that this doesn't make sense either to him or to the
IRS. He'll be apying this off for the rest of his life, and surely
it costs the IRS more than $25 a month to collect his money.
My questions: would it do any good to talk to the IRS about forgetting
the whole thing or settling for some cash amount? If a cash amount,
what would be reasonable to expect? My friend is rather naive, so
would it be possible for me to talk to the IRS about this for him?
And if it him or me or both of us doing the talking to the IRS, how
do we go about initiating the discussion?
I am by no means a tax expert or anything resembling a financial
expert, just an interested party.
Frank Wagner
wagner@ececs.uc.edu
------------------------------
Date: Tue, 8 Apr 1997 19:43:44 -0400 (EDT)
From: chris kalka <ckalka@tgn.net>
Subject: Rental write-offs?
I am presently looking to buy a second home and am debating
on whether or not to keep my present home and rent it or to
sell it. My question is what kind of tax write offs come from
renting a home. Thank Chris
------------------------------
Date: Tue, 8 Apr 1997 19:57:21 -0400 (EDT)
From: Michael Remily <remily@open.org>
Subject: Re: Jonathan Pond
We just watched a special on PBS by Jonathan Pond regarding Investing
advice. Has anyone else listened to him and is his advice worth something?
I know I ran across a few differences from him and other sources we've
explored.
Thanks.
------------------------------
Date: Tue, 8 Apr 1997 20:35:31 -0400 (EDT)
From: Michael Remily <remily@open.org>
Subject: Should I Buy a Formerly Leased Car?
Due to the new rage in leasing won't there be quite a few 2 - 3 year old
cars that dealers will be needing to dispose of soon? Are these cars a
good deal for the USED car buyer? I would think the maintenance record
would be better than a regular used car.
------------------------------
Date: Tue, 8 Apr 1997 20:37:04 -0400 (EDT)
From: FW & SC <kafer@crl.com>
Subject: Re: Unemployment Compensation & Taxes
(Question on unemployment compensation and taxes)
Sorry to break some bad news: Unemployment Compensation IS TAXABLE by the
U.S. Govt. (Line 3 on Form 1040EZ, line 12 on 1040A and line 19 on 1040.)
(Don't know about your state.) If you did not include it, you probably need
to recalculate.
>From the little data you posted, it appears that you can use Form 1040EZ.
Apparently you had income for 6 months of 1996. If you earned less than
$9500, did you take advantage of the Earned Income Tax Credit?? Depending
on how much you earned, your credit could be as much as $323 (Line 6 EZ:
$4200 to $5300). Line 6 1040EZ includes your unemployment compensation.
IMHO: you don't need a CPA or other tax preparer. You only need to read the
tax booklet and the forms carefully line-by-line. If you still can't figure
it out, go to a VITA site (call 800-829-1040 for a site near you) or an
AARP Tax-Aide site for free preparation. No need for you to pay $35 to $100
for an EZ or 1040A return.
As for taxes owed that you cannot pay on time, the IRS will be glad to work
out a monthly payment schedule, but the interest rate (1/2% per month up to
25% total) may be more than you could borrow elsewhere. Working with the
IRS is a whole lot better than letting the IRS seek you out, penalize you
and garnish your wages!
Since your withheld taxes did not cover actual taxes on your earned income,
you should figure out "why not"? A single person, with no one else as a
responsibility or exemption, should file a form W-4 with the employer for
S-1. However, if you worked more than one job at a time, then you need to
have sufficient tax withheld by each employer to cover the SUM of the
paychecks. Since neither employer knows about the other, neither employer
withholds enough tax. You need to get your withholding correct for 1997, so
you don't repeat your 1996 tax problem.
Frank
AARP Tax-Aide for low/moderate income elderly (60+)
Not a professional tax preparer
------------------------------
Date: Tue, 8 Apr 1997 20:39:08 -0400 (EDT)
From: Marty Turnauer <mturnaue@runet.edu>
Subject: Funding Source for Paying Students To Come To Class?
I am writing this for my wife who is a public school teacher.
Her school is attempting to increase student attendance in her elementary
school by "paying" students for coming to work, ie. school. They will also
reward effort, timeliness and contributing to being part of the school team.
The curriculum will teach principles of economics which go along with the
Virginia standards of learning incorporating supply & demand, money & bank
record keeping, principles of work and receiving rewards and principles of
investing.
The students will earn "school dollars" to purchase items or school services
and also be able to bank their "school dollars" for major purchases. The
students will also be taught how to save and work together as a group to buy
educational field trips.
The K-5 students will run the economy, be the bankers etc. and be supervised
by the teachers.
My wife needs assistance in identifying sources for the funding this
program. The money is needed to train teachers in the developing the
curriculum and funding purchasing of supplies for the student purchases.
What ideas for scources of funding could you suggest?
Thanks
Marty
____________________________
Martin S. Turnauer, Ph.D.
Professor, Health & Physical Education
Radford University
Radford, VA 24142
540 831-5315 fax 540 831-6650
------------------------------
Date: Tue, 8 Apr 1997 20:43:59 -0400 (EDT)
From: Keith Mealy <kmealy@cincom.com>
Subject: RE:Protecting Real Estate Against Creditors?
David asks:
>I need some advice on the following situation.
>An elderly widower with a home worth $400K transfers title of the home to
>his two daughters before his death. The daughters own it, but he plans to
>live there until he dies. One of the daughters proceeds to develop major
>financial problems and now has many creditors, most more than a little
>upset. The second daughter has a strong financial foundation and she is
>worried that the whole farm will be lost if the creditors find out the
>first daughter has her name on a piece of property.
>Now my questions:
>Does the "good" daughter need to worry? Does the father?
>In the age of computers, how easy would it be for the creditors to locate
>this property and put a lien on it?
>If they can put a lien on the property, can they attach it to 100% of the
>value or only 50%?
>It there a way the title can be restructured so as to better shield it from
>creditors?
>Could a trust be used in this situation to any advantage?
===========================================================
This serves as a good lesson to others in the "penny wise and pound foolish"
sort of homebrew estate planning. With a few hundred dollars of professional
advice (in advance), or a few trips to the library and some homework with
time and talent, you could have what you wanted. It may be too late
now, but I'd suggest contacting a lawyer with your questions. I suspect
that how the property is titled has a lot to do with it. (S)he could also
discuss future options with you. A problem with bad estate planning
is that it may be difficult or impossible to redo, especially from the
other side of the daisies.
Not to rain on your parade, but the pre-death transfer also will have
a tremendous effect on future capital gains taxes. If the property
transfers as part of the estate, the basis (cost) is the value at the
time of death. If it is transferred before death, it is the basis
at the original time of purchase. For example, assume the father bought
the property for $25,000 in the thirties, and the property is sold
shortly after death for $400,000. In the predeath transfer, the
amount subject to taxes is $375,000 ($400,000-25,000). As part of the
estate, the amount subject to taxes is $0 !
Undivided interest in property is generally not a good idea, exactly because
of these situations in addition to death, divorce, bankruptcy,
or family squabbles of one of the co-owners or his spouse/hiers.
Keith Mealy kmealy@cincom.com
Cincinnati, OH http://www.cincom.com
(Editor's Comment - One complication is that the estate itself would be
greater (by the market value of the house at time of death). So though
the heirs don't pay capital gains tax on the house, the estate might be
subject to estate tax, which can be as much as 55% of the estate. This is
*definitely* an area where professional help is strongly advised, as Keith
suggests. -IK)
------------------------------
Date: Tue, 8 Apr 1997 20:48:06 -0400 (EDT)
From: David Meyers <dmeyers@panix.com>
Subject: Fidelity Is Out Of Style
[re fidelity's commission schedules, etc]
>(Editor's Question - Is Fidelity going out of style? Magellan has
>definitely lost popularity, perhaps because of its lackluster performance.
>-IK)
Good question. They have so many funds, only a few of which
have seemed worth thinking about, lots with loads - its amazing
to me that they actually have as much under management as they
do. On the other hand, they have excellent marketing and
offer lots of help to folks trying to set up things like
retirement plans, particularly small businesses. Also, they
have the biggest set of sector funds so people who want
to make industry bets without worrying about specific
stocks can do so - nobody else does that with such a
wide selection of specific funds.
As far as their discount brokerage services, not that I have
much to compare against, but the folks I've worked with there
all seem very nice, all well-intentioned, some more competent
than others (though their back office seems rather less
competent - took two months to clear up a screwup on their
part). Their web-trading setup is pretty nice, but the
news and research they make available is pitiful.
Some of their web-trading competitors certainly undercut
their prices significantly, but I don't know how good
those super-cheap places are at actual execution of
orders nor what kind of no-transaction-fee mutual funds
they make available. Probably their biggest competition
is Schwab, which is comparable in cost and coverage,
while places like E*Trade have much lower commissions
and probably lots fewer choices of non-exchange-traded
securities (ie. funds).
- --D
(Editor's Comment - Fidelity has gone to "management by committee" for
their funds. Instead of Peter Lynch, you get 10 MBAs sitting around a
mahagony table. IMO, you'd get better performance relying on a
computer-driven index fund like Vanguard Index 500. You don't have to pay
for the computer's luncheons (or martinis!). -IK)
------------------------------
Date: Tue, 8 Apr 1997 20:52:26 -0400 (EDT)
From: "Russell J. Foster" <RFoster@specgrp.com>
Subject: Re: Protecting Inheritance? Why?
John Leipold wrote:
<<<According to Jonathon Pond, the best executed estate planning ends up
with no estate to worry about. If you earned it, you ought to spend
it!>>>
<<<The best legacy one can leave one's heirs are good memories and
thrifty habits.>>>
Excellent comments.
This topic recently came up for discussion with my life insurance agent.
Basically, he was wanting me to buy a whole life policy that would allow
me to carry a multi-million dollar death benefit, regardless of health,
to my estate after I retire (and after I passed on, obviously).
I told him I had no desire to have my descendants cash in on my death.
Sure, each would get numerous family heirlooms along with a relatively
small cash provision but my wife and I have already discussed the matter
and it is our preference to distribute their inherentant while we are
still alive. (It's our feeling that we would rather be worth more alive
than dead.)
It's our hope that our children will be self sufficient by the time the
death benefit would get paid (it's a different story if they are not
self-sufficient, in which case justifies a large death benefit to care
for them until adulthood).
I would rather invest my money someplace where we (my wife and I) could
spend it in our later years.
>
>(Editor's Question - Anyone for Henry George, the 19th century economist
>(PROGRESS AND POVERTY) who advocated just one tax - a 100% estate tax?
>- -IK)
>
Interesting. Personally, *I* would rather decide where my estate goes instead
of the government. Assuming our children are grown, most of our estate is
going to charitable causes.
I think the less the kids get, the less potential family problems dividing
the estate. I've seen it happen before in the best of families. Our will
contains a clause that any contestants of the will are to be disinherited.
It may sound tough, but they didn't build the estate and they should be
happy with the smallest of gifts they receive.
Russell J Foster, MCSE
The Spectrum Group
rfoster@specgrp.com or rjf@mcs.net
(Speaking only for myself and not my employer)
------------------------------
Date: Tue, 8 Apr 1997 20:53:42 -0400 (EDT)
From: Kurt Nosack <KNOSACK@novell.com>
Subject: How Do I Handle Mortgage Refinance In Quicken?
I just refinanced my mortgage and was wondering what is the best way to
enter this in Quicken? Should I create a new account with the new
interest rate, principle, etc. and close the original? Or should I just
change the original? I am thinking of the former, but I am open to any
suggestions. On a related note, I have cancelled a number of credit
cards, so I don't care to see them in my account list. Is there a way to
archive them so they aren't in the way, yet accessible for reports, etc?
BTW, I have Quicken 4 for Windows. Is it time to upgrade? If so, is the
Deluxe Version worth the extra $?
Thanks in advance,
Kurt Nosack knosack@novell.com
------------------------------
Date: Tue, 8 Apr 1997 20:57:01 -0400 (EDT)
From: "David J. Churchill" <churchilld@worldnet.att.net>
Subject: International Student Needs Financing Proof for Student Visa
(Dental school student from overseas looking for financing $26K tuition.)
Just as an aside, your friend from outside the US may find that she has
to get someone to verify that her entire college-finance picture is paid
for before the US Immigration people will grant her a student visa.
------------------------------
Date: Tue, 8 Apr 1997 20:58:31 -0400 (EDT)
From: "Barry H. Rodin" <brodin@pica.army.mil>
Subject: Ira Should Get the Amazon IPO Prospectus
> So...Is Amazon the next Netscape?
>
>Ira
Ira,
Since you are involved with this company, why not get a (preliminary)
prospectus.
Please tell me (and/or persfin-digest) how to go about getting one.
Also, even if you decide to invest, you might not be able to get any
of the stock at the IPO (Initial Public Offering) unless you have a
strong ongoing relationship with a Full Cost Broker that is part
of the offering group.
Barry
------------------------------
Date: Tue, 8 Apr 1997 20:59:39 -0400 (EDT)
From: "Jackson, Anthony D." <JacksAD1@central.ssd.jhuapl.edu>
Subject: Historical Stock or Mutual Fund prices?
Does anyone know of a on-line quote service that allows me to get a
price quote for a certain date? I would like to put in a symbol and a
date and get the share price or NAV on that date.
Tony
jacksad1@jhuapl.edu
------------------------------
Date: Tue, 8 Apr 1997 21:00:44 -0400 (EDT)
From: Susan Mangiero <mangiero@shu.sacredheart.edu>
Subject: Gold Coin Buying Tips?
Can anyone give me some tips on buying gold coins? How does one find a
reputable dealer? Is there a difference in price other than that based on
weight? Thanks.
(Editor's Thoughts - There always seems to be a scandal about coin
dealers. New England Rare Coin Galleries was one that recently had mega
problems. -IK)
------------------------------
Date: Tue, 8 Apr 1997 21:01:50 -0400 (EDT)
From: Paul Fan <fan@math.ucla.edu>
Subject: Estimated Tax Question?
Hi -
My tax comes from wages and mutual fund distributions
that come mostly at the end of the year. Will the
IRS object if instead of paying estimated taxes, I
have my employer deduct more for taxes the last two
or three months of the year to cover the mutual fund
distributions?
Thanks,
Paul
fan@math.ucla.edu
------------------------------
Date: Tue, 8 Apr 1997 21:03:22 -0400 (EDT)
From: themerc@juno.com (The Mercenary)
Subject: Re: How Do I Evaluate Title Insurance Policies?
>I'm in the process of buying a house, and the lender requires "Title
>Insurance," which I suppose most people know, protects me and the
>lender if there is a future cloud (such as an undiscovereed lien) on the
>title.
Not exactly. More than likely 2 policies will issue. One protecting
and the other protecting the lender.
>My question is, how oes one evaluate a policy? From what I can tell,
>all the title companies are linked with lenders, and their prices don't
>vary by more than 5% from each other.
Title companies should not be "linked" with lenders.
Each lender prefers one or two agencies above others for various
reasons. And in order for a title agency to be on the "approved" list
they have to jump through some large hoops.
There are only really a handful of underwriters in the industry through
whom a local title company can issue a policy. Said policy and, most
generally, the rates charged are regulated by your state. The difference
is so neglible comparisons are a waste of time. Choose the agency who
is either closest to you or the one that is willing to go that
"extra" step
such as holding the closing before or after normal work hours, etc.
As a rule, an independent agent will work a lot harder for you than a
company that is owned and operated by the underwriter. Where the
company owned employees go home a 5 pm and the next day's work
be damned, the independent company's employees may work till
midnight or later getting your package ready for that 8am closing you
need to complete.
------------------------------
Date: Tue, 8 Apr 1997 21:04:17 -0400 (EDT)
From: "Wall, Steven" <walls@phibred.com>
Subject: Callable Cds ?
PFers:
Anybody have any advice/experience/information regarding 'callable' CDs?
Thanks in advance.
sj wall
walls@phibred.com
------------------------------
Date: Tue, 8 Apr 1997 21:13:04 -0400 (EDT)
From: lspoto@frk.com (Spoto, Leonard)
Subject: Capital Gains Question - Separate Rate?
I'm a rookie in the tax arena (this is the first time I've done my taxes)
and I've got a capital gains question....The only capital gain I had for the
year was for about $145, and on my 1040, I simply added this in with my
income (on line 13 and put CGD on the dotted line). Is this the correct way
to handle this? I thought there was a seperate rate for cap gains??? Can
you guys enlighten me?
------------------------------
End of persfin-digest V4 #19
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