Go to Jeff Salisbury LWGate Home Page.From: persfin-digest <owner-persfin-digest@shore.net>
Subject: persfin-digest V4 #85
Date: Mon, 22 Sep 1997 20:18:18 -0400 (EDT)
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persfin-digest Monday, September 22 1997 Volume 04 : Number 085
IN THIS ISSUE:
ADVERTISEMENT: MCI FAX BROADCAST SERVICE
RE: Life Insurance Trust Information
Re: Life Insurance Trust?
Re: Email While Traveling - Try the Palm Pilot
Re: Email when traveling - Try CyberCafe
Re: Questionable financial planner practice
Re: new tax law: gain on sale of a home
Re: New Tax Relief Questions
Re: Using a Computer Bill Paying Service - Satisfied CheckFree Customer
Do I Need to Separate Long and Short Term Gains?
Can my teenage daughter open an accessible saving account??
Re: Stockbrokers-Are They REALLY needed?
short term losses vs. long term gains?
Re: My Old Car
Re: My Old Car
Shopping for Home mortgages - Some Tips
Re: Advice for shrinking debt load
Re:New Tax Relief Questions
[Q]: Cap.Gains Tax
RE: Stockbrokers - Are They Really Needed?
shrink debt
Re: old car
income tax penalty on marriage
Re: Interactive Investment tech fund
Low-fee/No-fee IRA accounts
Check writing software?
Small Business Questions
Auto Accident-Pay Myself or Claim?
What is this all about?
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------------------------------
Date: Mon, 22 Sep 1997 19:48:28 -0400 (EDT)
From: "Cal Lester C.L.U." <Cal_Lester@classic.msn.com>
Subject: RE: Life Insurance Trust Information
(curious@sirious.com wrote)
I've been advised to set up an irrevocable life insurance trust because
my assets are over 600K and I'm single. I'm wondering if I could just
get a policy in my son or brother's name instead. I have only one
child, he's in college and I trust him completely. It seems a lot
simpler. Are there any ramifications I should be aware of?
Dear Curious:
This sounds like a Dear Abby response. An Irrevocable Trust is a vehicle into
which you place certain assets, which you give up control of from that point
on. You can never reclaim the asset. One of the common uses for an I.L.T. is
purchase & own Life Insurance on the life of someone who has a potential
Federal Estate Tax obligation. The Trust purchases the policy, and is the
beneficiary, and contains instructions to pay any and all Federal Estate Taxes
due on the death of the Testator. In this manner, the proceeds of the policy
are NOT included in the Estate of the Testator, and DO NOT INCREASE his / her
F.E.T. burden.
However, IF the Testator retains ANY control over the policy, then the ENTIRE
Death benefit IS included in the Estate, which will INCREASE the tax burden.
Your second suggestion, to have a Third Party be the purchaser, Owner &
premium payor, will have the same F.E.T. effect, provided YOU do NOT retain
ANY control over the policy. This is EXTREMELY important.
The primary difference, is that the TRUST is usually a Corporation, bonded and
almost guaranteed to be there when you need it. Whereas a family member may or
may not ! ! ! ! ! Remember, you have implicit faith in your Son, but do you
also have that same implicit faith in his "second wife" ???? Remember we are
talking about something that hopefully wont happen for at least a few years !
! ! ! ! ! ! ! !
Cal Lester CLU
------------------------------
Date: Mon, 22 Sep 1997 19:50:01 -0400 (EDT)
From: "Cal Lester C.L.U." <Cal_Lester@classic.msn.com>
Subject: Re: Life Insurance Trust?
> I've been advised to set up an irrevocable life insurance trust because
> my assets are over 600K and I'm single. I'm wondering if I could just
> get a policy in my son or brother's name instead. I have only one
> child, he's in college and I trust him completely. It seems a lot
> simpler. Are there any ramifications I should be aware of?
>
> I. Good
I'm afraid that I can't give a direct answer to your question, but I
would like to launch in here with a few peripheral observations, if I
may.
1) I have a strong hunch that your source of information about needing a
"life insurance trust" comes from someone who can sell you that kind of
policy. While there are many good products out there worth buying,
ALWAYS suspect that there may be a simpler or better deal than the one
someone may be offering you if it profits them also. Ask lots of
questions of different people with different viewpoints. You are doing
that here in this forum and are to be lauded for that.
>>>> Apparently you are NOT qualified. A Life Insurance Trust is NOT a
"policy". It is a Legal Document, that is designed to assume control over
assets.
2) Take the fullest advantage that you can of the $10,000 per year you
can gift out of your estate to your son. Start with illiquid assets
(home, other property) first, cash last.
>>>> $10,000 gifts, although Not Federal Gift & Estate Taxable,
may NOT be the wisest thing to do at this time, when the son is in
college. That GIFT becomes the property of the donee, who can then do
anything that he/she wishes with it.............
3) The retirement funds you accrue are due to your efforts. Enjoy them
to the fullest extent while conserving enough to last you through
somewhere around 89 years old. The ideal scenario would be to live well
and die penniless, but the odds of knowing our own time of departure off
of this world are remote. Therefore, prudence would dictate that one
side with the odds as far as lifespans, average cash flow needed, rates
of return for your style of investing, etc.
>>>> I know many people currently over the age of 89. I, based
on my family longevity hope to pass that milestone easily. Therefore,
since you know nothing about "curious", it is not a good idea to set time
limits for him.
In addition, you seem to have forgotten to take into consideration the
possibility that he might at some point in time require " Long Term Care ", a
very expensive item, which could cause some problems if he took your advice,
and "enjoyed his money to the fullest extent, with little left at age 89 ".
please use caution when making recommendations to other people on the
Internet. A qualified Estate Planner would most certainly do a COMPLETE fact
finding / feeling finding interview prior to making any recommendations at
all. Poor advice albeit well meant, can be disastrous.
Cal Lester CLU
------------------------------
Date: Mon, 22 Sep 1997 19:50:47 -0400 (EDT)
From: jeffcarp@usa.net (Jeff Carpenter)
Subject: Re: Email While Traveling - Try the Palm Pilot
>
>I travel a lot, but don't want to take my laptop. Uniden makes somewthing
>that receives e-mail. Does a PDA do it also? Any suggestions?
The PalmPilot, which is made by US Robotics (now 3Com), works very
well for this application. Most any external modem will work with the
Pilot through an approximately $20 modem cable. The software
"Handstamp" works with any POP e-mail server and SMTP server. The
Pilot has a built-in dialer which works with any PPP internet
connection.
Total investment, assuming you have a modem, is less than $400.
*************************************************
Jeff Carpenter Des Moines, IA
*************************************************
------------------------------
Date: Mon, 22 Sep 1997 19:52:17 -0400 (EDT)
From: rfrego@jas-net.de (Rodger Frego)
Subject: Re: Email when traveling - Try CyberCafe
>You do not need a laptop to get email. Their are phones from which you
>can now send and receive emails.
There are also lots of Internet cafe shops around the nation. I
am not sure how one would get a list of these shops, however.
Cheers,
Sarge
(Editor's Comment - I tried:
http://www.mailstart.com
>From there, you can read and write email. Sounds like you find a
CyberCafe, go to mailstart, and do your emails, thus saving telephone and
PalmPilot costs. -IK)
------------------------------
Date: Mon, 22 Sep 1997 19:52:43 -0400 (EDT)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: Questionable financial planner practice
Well, I'm not going to make specific comments without knowing all the
facts, but I will say that in general it does not make sense to put an
annuity in an IRA -- an IRA already gets you tax-deferred growth, so
why put a tax-deferred vhicle (an annuity) inside a tax-deferred
account? As you discovered you'll rack up lots of extra fees and lose
flexibility. For most people there is no point to doing this.
Did your planner explain to you why he was choosing an annuity? Did
you ask him why he was putting a tax-deferred vehicle in an account
that was already tax-deferred? What did he say? Were you satisfied
with the answers? Did he disclose to you how he was getting paid?
Did you make sure to get a copy of Part II of the ADV form he has to
file each year?
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Mon, 22 Sep 1997 19:53:24 -0400 (EDT)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: new tax law: gain on sale of a home
>under the new tax law, capital gains from the sale of a home that was a
>principal residence is excluded from taxes (upto a certain limit). does
>that mean that tracking cost of home-improvements etc. that add to the
>cost basis is no longer necessary?
Well, it depends. Most cynically, there's no guarantee that Congress
won't change the law in the future, and tracking all those
improvements may well matter again some day. More immediately, what
if you decide to rent your house (or part of it) out, or use part of
it as a home business? You may well need to know the current adjusted
basis in order to properly compute depreciation. It doesn't seem to
be that much effort to hold onto those receipts in case you ever need
them, and if you ever need them you are going to REALLY need them, so
I'd hold onto them.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Mon, 22 Sep 1997 19:54:52 -0400 (EDT)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: New Tax Relief Questions
[Disclaimer: this is my opinion, not advice. I am not a professional.]
> During 1998, taxpayers may convert traditional IRA's to Roth IRA,
> subject to an AGI limit of $100,000 (excluding the conversion
No. One may perform the conversion in *any* year from 1998 on (if
your AGI excluding the conversion is $100,000 or less). The magic of
1998 is that if the conversion is done in 1998 the "conversion income"
is spread over four years. If the conversion is done after 1998, the
"conversion income" is fully included for tax purposes in the year of
the conversion.
> itself). If a taxpayer is extremely close to this AGI limit towards
> yearend (1998), and various unknown compensation/bonus issues or
> mutual fund distributions could put them over this limit, does the
> conversion literally have to be completed in the same year? The mere
> timing of these issues could pose a dilemna at yearend 1998.
The consensus of the pros in misc.taxes.moderated, anyway, is that
you're basically screwed. If you end up going over the $100,000 AGI
mark, the conversion gets turned into an early IRA distribution -- you
get hit for income tax and the penalty. On top of that, the funds you
put into the Roth will probably be considered an excess contribution
and you'll have to back those out. A real mess.
What most suggested was to not do the conversion until as late in the
year as possible, to minimize the amount of uncertainty in AGI. Keep
in mind, though, that certain fund distributions made in January are
deemed to be taxable for the prior year.
Now, if it turns out that the IRS allowes conversions done before
April 15, Y+1 to be part of year Y (the way traditional IRA
contributions work now), then one should wait until then so that all
AGI issues are known before attempting the conversion.
Speaking of the $100,000 limit for conversion, that's evil, too. The
limit is $100,000 if filing singly, $100,000 if filing married
jointly, and $0 (that's not a typo) if filing married singly.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Mon, 22 Sep 1997 19:55:28 -0400 (EDT)
From: Energo Ed <energo@fwa.cioe.com>
Subject: Re: Using a Computer Bill Paying Service - Satisfied CheckFree Customer
Jeff Carpenter relates:
>>At least as important - and the biggest reason I won't consider electronic
>checks - getting screwups fixed. I've heard a couple of horror stories
>about incorrect debits, unpaid bills, etc - and getting these things
>_fixed_ - I've never heard anyone say "one phone call and it was
>straightened out".
>
>
>One call and it was all straightened out. Seriously.
I just used CheckFree's e-mail feature once or twice per problem (maybe 3
problems in the last 15 months since I have been using CheckFree. All
problems were resolved in my favor.
Ed, a satisfied customer with CheckFree
------------------------------
Date: Mon, 22 Sep 1997 19:56:47 -0400 (EDT)
From: Richard Voigt <sammy2@execpc.com>
Subject: Do I Need to Separate Long and Short Term Gains?
I make automatic monthly investments into a number of mutual funds. At
time of sale will I need to separate out the recent investments (last 18
mos.) and compute short term gains/losses as opposed to the portion I
held long term?
------------------------------
Date: Mon, 22 Sep 1997 19:57:37 -0400 (EDT)
From: "alkon" <alkon@hal-pc.org>
Subject: Can my teenage daughter open an accessible saving account??
My teen daugther has saved about $700 from various odd jobs over the
summer. She would like to have her own savings account or fee
free checking account that she can use to draw money from when she
needs it. What is available for her? We live in the Houston Tx
area.
Thanks, Al Kondo
------------------------------
Date: Mon, 22 Sep 1997 19:58:13 -0400 (EDT)
From: "Victor Daniel a.k.a the MacNut" <macnut@netaxs.com>
Subject: Re: Stockbrokers-Are They REALLY needed?
>Not true at all. If I own stock in a publically-traded company, I can
>most certainly sell my shares without having to use a broker. Once I
>locate someone who is willing to pay what I want for the shares, I
>accept his money, endorse the back of the certificate, and hand the
>certificate over to him. He then sends it to the designated transfer
>agent to be reissued in his name. Voila! I of course have to report
>the sale on my tax return. Also, the price paid should be quite close
>to what it was trading for on the exchanges that day, else there'll be
>an element of gift to the transaction that must be accounted for. But
>in any case, a private sale of a publically-traded security is
>perfectly legal and allowable.
>
Wow. I didn't even know you could do trade stocks THAT easily, without even
using an exchange. Thanks again, Rich for providing another piece of my
investment education. So, if I had XX shares of XYZ Corp for sale (at
market price of course), I could sell them directly to you, following the
above procedures, without involving a broker or any of the exchanges at
all? And it would be a perfectly legal transaction? Very cool.
Just one question; what do you mean by "transfer agent"? Would that be
someone at the Investor Relations Dept. at the corporation whose shares
were being traded?
The MacNut
| Victor Daniel a.k.a The MacNut Home page in progress at: |
| macnut@netaxs.com http://www.netaxs.com/~macnut |
| vdaniel@neptune.eng.temple.edu vdaniel@thunder.ocis.temple.edu |
------------------------------
Date: Mon, 22 Sep 1997 20:00:03 -0400 (EDT)
From: "Steve R. Rasmussen" <rasmuss@peak.org>
Subject: short term losses vs. long term gains?
What are the IRS tax rules for offsetting short term losses by long term
gains? Must both the long term gain and the short term loss occur in the
same year? Can a short term loss in one year be offset by long term gains
over several years?
Specifically, we had a lot of capital gains last year when bonds bought at
deep discounts either matured or were called. This year we could sell one
or two out-of-favor stocks at a loss. Also this year, we could sell some
greatly appreciated stocks to realize a long term gain to offset the short
term losses.
------------------------------
Date: Mon, 22 Sep 1997 20:01:07 -0400 (EDT)
From: David Martin <dmartin@seabreeze.hc.ti.com>
Subject: Re: My Old Car
Ravi writes:
>I bought a 1983 Accord in 1991 for $2,200. It had 81K then and now it
>has 128K mileage.
>What are my options ? ( Assuming the words of my mechanic are reliable)
>If I give it away to charity, I can tax-deduct. But I do not itemize. Also
>how to determine the value of the car ?
You can bring it to a junkyard and get about $50 cash on the
spot with no liability issues. $2,200 for 6 years of car isn't bad at
all. Hondas are good cars, but after 14 years of intensive use, it may
be time to put it to rest.
I wouldn't try to eke out the last cent from the car. Your
time would be better spent finding a good deal on another used car.
-David Martin
------------------------------
Date: Mon, 22 Sep 1997 20:02:34 -0400 (EDT)
From: Avrum Lapin <avrum113@cyberg8t.com>
Subject: Re: My Old Car
>I bought a 1983 Accord in 1991 for $2,200. It had 81K then and now it
>has 128K mileage.
>
>Of late, the brakes on the car are not effective and the car has failed
>State emission. There are other problems with transmission and the
>steering wheel. My mechanic tells me that, to bring it back on
>the road safely with minimal expense will cost me upwards of $1500.
>He advises me that it is not safe to drive my car as-is anymore.
>
>What are my options ? ( Assuming the words of my mechanic are reliable)
You could get a second opinion. You should be able to get more than
128K on an Accord. The car could have had 181K in 1991 (22K/year
is not unusual in California).
Brakes wear out and sometimes a small adjustment might fix the smog.
The next question has to be how serious the steering problem is
relative
to how you use the car. If the costs for these are are small and you
want to nurse the car along and risk transmission failure causing
inconvenient immobility then go for it.
>
>If I give it away to charity, I can tax-deduct. But I do not itemize. Also
>how to determine the value of the car ?
Edmonds and Kelly publish guides to used car prices - Available at
many
libraries, auto finance desks at Banks etc, and somewhere on the web.
The IRS would most likely accept a value based on these numbers. Here
in the Inland Empire (East of LA) if a car has a smog certificate and
it drives it sells for at least $750 from a dealer who would probably
pay $400 for the car if you drove it in. There are salvage yards who
will buy the car from you.
>
>If I sell it as is, what is my liability if the buyer is involved in an
>accident before the car is transfered to the buyer's name ? ( Considering
>the brakes are not effective and the buyer knows about this.)
In CA you can sell the car "as is". I think that the buyer also has to
acknowledge that he is responsible for smogging the car. You should
notify the DMV via certified mail of the sale. That notification
relieves you of liability. About 15 years ago the buyer of my "junker"
was involved in an at fault accident. The victim's insc tried to go
after me but they backed off when I sent them a copies of the bill of
sale and the DMV notification form ( not a lawyer - this last paragraph
is worth what you paid to read it)
Avrum Lapin
Upland., CA
------------------------------
Date: Mon, 22 Sep 1997 20:03:57 -0400 (EDT)
From: "Grady Cash" <cashg@gte.net>
Subject: Shopping for Home mortgages - Some Tips
It's been a while since I last wrote for persfin-digest. My wife and
I decided to move from California to a 'preretirement' home in
Florida. One of the perks of being a writer and speaker is that you
can live anywhere.
Anyway, we are now in the process of buying a home. The home
mortgage process was so convoluted I thought I would share my
'lessons learned' with persfin-digest readers.
1. Check for a loan on the Internet and in local papers. Our
paper ran a list of local mortgage rates weekly.
2. Shop around. The interest rates we were quoted, even _after_
pre-screening companies, varied by 3/4%.
3. Pay no points. A point - 1 percent of the loan - was charged by
some lenders as a processing fee or as a way to get a lower interest
rate. As an investment to get a lower interest rate, it didn't make
sense unless you held the loan for many, many years. Most people
sell before then.
4. Carefully check out all fees. One lender promised no
points in his ads, but then charged a $850 "origination fee."
Sneaky.
5. Seriously consider a 15 year versus a 30 year loan. On
average, the 15 year loan had a 3/8 percent lower interest rate.
6. Avoid PMI by putting 20% down. PMI - private mortgage insurance -
was the greatest hidden fee of all. It raised the monthly payment by
the equivalent of having a 0.9% higher mortgage interest rate. Since
you normally have to put down 5% of the purchase price anyway, you
can avoid PMI by putting down an additional 15%. The return on that
extra 15% worked out to be a guaranteed 10.5% per year.
By putting 20% down and choosing the 15 year loan to get a 3/8%
lower interest rate, my monthly payment will be _less_ than
it would have been for a 30 year loan. Of course, we are borrowing
only 80% of the purchase price instead of 95%. Still, we'll have the
house paid off in 15 years instead of 30.
Granted, you might do better by putting that higher down payment into
a mutual fund instead of a house. To each his own.
Grady Cash, CFP
http://www.healthycash.com/
------------------------------
Date: Mon, 22 Sep 1997 20:05:33 -0400 (EDT)
From: jleipol <jleipol@ibm.net>
Subject: Re: Advice for shrinking debt load
Jason asked:
I've been approached a few times recently by individuals selling mutual
funds, but a fairly large mortgage and 40K+ in credit card debt
precluded my involvement. I'll worry about acquiring stock later. If
some of you have any suggestions on a plan of action for debt
elimination, I'll be severly grateful.
Jason:
Whatever the highest interest rate you are paying now on credit card
debt, that is your guaranteed rate of return for any extra payments you
can make against the principal owed. If the credit card companies are
charging you 18% interest, that is money that is flowing away from you
at that rate. When you pay down the amount owed, you are giving yourself
a rate of return on your "investment" equal to the rate of interest you
are paying.
The sooner you get yourself out of the "paying high interest rates" side
of the equation, the sooner you can consider yourself ready to start
making investments that put you on the "getting a return on money" side
of the equation.
Recognizing the problem with credit card debt is an important step. Now
comes the hard work:
1) Live within your means. The standard joke is: How much does it cost
to live these days? A little more than you make! Living "within your
means" may have to include having fewer goodies (older car, smaller
house or apartment, etc.) but in return for having fewer goodies, you
can have the satisfaction of knowing that you are going to be a lot
better off in the future. You really don't want to be eating dog food
when you retire, do you?
2) Become more aware of the dynamics of cash flow in your life. Of the
two ways we all have of having more money, cutting spending is usually
easier than increasing income. You may be amazed at how much money you
are spending on things like eating out, movies, impulse buying, etc.
Either write checks for everything or save the receipt for cash
purchases, and after a few weeks or a month, divide them up into
categories and add them up to analyze exactly where the money is going.
3) Prioritize your spending of available cash. Whatever credit cards you
have that have the highest interest rates, make it a high priority to
get them paid off. If you must use credit cards, get rid of all but one
or two with the lowest rate. Cut up the rest and return them to the
issuers with a written request to close the account as soon as a zero
balance is attained.
4) Understand how you got so much credit card debt in the first place.
Are you a nut? Get some help. Are you lazy? Work more hours or get a
second job. Are you crazy? Exert some self-control. Are you paying for
past mistakes? Tighten your belt and make sure you've learned your
lessons so you don't have to repeat that class.
5) Look for ways to increase your income. Don't overlook educational
opportunities, and don't pass by chances to earn extra income.
There are only two things worth getting into debt for: your home (who
can afford to pay cash for a house?) and education (as long as it will
provide for you the skills and credentials that will enable you to make
more money).
Get a greater degree of self-control, work hard, and persevere. If you
do, odds are that you will make it.
John Leipold
------------------------------
Date: Mon, 22 Sep 1997 20:06:37 -0400 (EDT)
From: Steve Foulks <sfoulks@nmu.edu>
Subject: Re:New Tax Relief Questions
>Re: Roth IRA Conversions
> During 1998, taxpayers may convert traditional IRA's to Roth IRA,
> subject to an AGI limit of $100,000 (excluding the conversion
> itself). If a taxpayer is extremely close to this AGI limit towards
> yearend (1998), and various unknown compensation/bonus issues >or
> mutual fund distributions could put them over this limit, does the
> conversion literally have to be completed in the same year? The >mere
> timing of these issues could pose a dilemna at yearend 1998.
You don't have to do the conversion in 1998. If you don't you will have to
pay any taxing owing on the converted amount in the year of conversion,
rather than spreading it over 4 years as is permitted for 1998 conversions.
>Re: Education IRA
> Can a child contribute to their own Education IRA from a >previously
> established UGMA account? Of course, this would be directed by >the
> custodian (or parent).
My reading of the law says the answer is no - it is available for a
designated beneficiary who is your child, but I would be interested in the
answer to this question myself.
Steven M. Foulks, CPA, CFP, PhD
Professor of Accounting & Finance
Northern Michigan University
www.nmu.edu/instruct/business/sfoulks/
------------------------------
Date: Mon, 22 Sep 1997 20:07:17 -0400 (EDT)
From: borisv@ctron.com
Subject: [Q]: Cap.Gains Tax
Hi, netters!
I bought two lots (50 and 100) of the same stock with 3-week
interval. Now, my on-line broker (NDB, if you wonder) doesn't have an
option to specify lots in sell order form. Let's assume I will sell
them in two separate transactions (same sizes: 50 and 100 shares).
How should I calculate cap.gains? Do I have an option of using
real purchase prices or I must use an average price only?
Thank you,
- -Boris
Dover,NH
------------------------------
Date: Mon, 22 Sep 1997 20:08:21 -0400 (EDT)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: RE: Stockbrokers - Are They Really Needed?
>investment education. So, if I had XX shares of XYZ Corp for sale (at
>market price of course), I could sell them directly to you, following the
>above procedures, without involving a broker or any of the exchanges at
>all? And it would be a perfectly legal transaction? Very cool.
Yes, it would be. Even if you sell it at something other than market price
it will be legal, but in that case the difference will be reckoned a gift
or perhaps compensation (depending on exactly what was happening) and cost
basis will have to be adjusted accordingly.
Also keep in mind that the sale may have to be "at arm's length" to truly
count as a sale. Selling the shares to a spouse, a child, a parent, etc.
may not be considered a true sale by the IRS. Consult a tax pro for those
issues.
>Just one question; what do you mean by "transfer agent"? Would that be
>someone at the Investor Relations Dept. at the corporation whose shares
>were being traded?
No. The transfer agent is the entity that "keeps the book" of
shareholders and accounts for all the outstanding shares. When a
stock certificate is issued in your name, the transfer agent gets the
thing printed up and makes a record of the certificate number, your
name, address, and SSN, and the number of shares represented. When
you transfer the stock (by sale, by gift, by bequeathal, etc.) the
transfer agent will effectively strike out your entry and cancel the
certificate. It'll then issue a new certificate to the new owner.
The transfer agent is clearly indicated on the stock certificate (and
I'm sure Investor Relations or your broker can tell you who the
transfer agent is if you don't have a certificate in front of you).
While the corporation could act as its own transfer agent, the job is
usually farmed out to banks or similar companies who make a business
out of doing such things.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Mon, 22 Sep 1997 20:09:57 -0400 (EDT)
From: BOB FORD <BOB_FORD@compuserve.com>
Subject: shrink debt
>Subject: Do you have any advice on shrinking or eliminating debt?
>I have been reading your Q & A's on mutual funds for some time and
>have found the advice given to seem quite sound. I need help. I've
>been approached a few times recently by individuals selling mutual
>funds, but a fairly large mortgage and 40K+ in credit card debt
>precluded my involvement. I'll worry about acquiring stock later. If
>some of you have any suggestions on a plan of action for debt
>elimination, I'll be severly grateful. jasonwayne@rocketmail.com
JASON
Probably the best investment you can make is to pay off your credit card
debit. It is unlikely that you will find a mutual fund that will give you
a greater return on your investment.
GOOD LUCK
BOB FORD
BOB_FORD@COMPUSERVE.COM
(Editor's Comment - In addition, there's ZERO risk. Few "investments"
have that kind of risk-reward ratio. -IK)
------------------------------
Date: Mon, 22 Sep 1997 20:11:02 -0400 (EDT)
From: BOB FORD <BOB_FORD@compuserve.com>
Subject: Re: old car
RAVI
(THE USUAL WARNING)
I am not an attorney and the following is not legal advice. It is just my
opinion.
It is not wise to sell a car that is unsafe to drive. You could be open to
a lot of liability if the buyer has an accident in the car. I would not
even give a car to someone that is unsafe to drive for the same reason.
When you give a gift to a charity, the common procedure if for YOU to place
a value on the gift. HOWEVER, the IRS may ask you to prove the value of
the gift.
The cheapest miles in direct cost for a car is to keep it forever. You
just have what breaks repaired as it breaks. There are other cost
associated with a car that needs repair often that you must factor in to
see if this method is really the cheapest.
GOOD LUCK
BOB FORD
BOB_FORD@COMPUSERVE.COM
------------------------------
Date: Mon, 22 Sep 1997 20:11:46 -0400 (EDT)
From: yzheng@saturn.vcu.edu (Yan Zheng)
Subject: income tax penalty on marriage
I have a question and hope someone can help me. I got married early this
year. Both of us have fairly equal income and have no children. Recently I
did an estimate on our 1997 taxes. To my great surprise, comparing to
filing single, the taxes we have to pay to the IRS will be either $1,000
more if we file jointly or $700 more each if we file separately. Because
for married, the standard deduction is lower but the tax is higher. What a
punishment for being married! This definitely has proved my long time
hearing of marriage penalty. My question is how IRS would know a person's
filing status. Does it rely on a tax payer's honesty, or IRS does have the
info and matches each filer's status when it receives the tax return form?
I don't mean that I want to cheat, just wondering how IRS knows if someone
is married or not. I think it is so unfair that married people without
children become most discriminated by IRS.
My second question. After marriage, we both changed our tax withholding
status from single to married. Now we found that our tax withholding is not
enough due to the withholding rate for married people is lower than single.
We are told we will have to pay penalty if the underpayment is over $500.
Now we have to ASK FOR extra withholdings so that our tax due won't be over
$500 at the year end. My question is what if we only find out at the tax
time next year that we owe IRS a lot, I don't think we should pay penalty,
or should we? We followed the rules. It is the IRS withholding rate that
messes things up. Why will we get punished? Has anyone had such
experiences with IRS? Greatly appreciate any responses.
Yan
------------------------------
Date: Mon, 22 Sep 1997 20:12:30 -0400 (EDT)
From: Brian Michalak <brianm@pdt-cav.com>
Subject: Re: Interactive Investment tech fund
It's a good mutual fd. I've made 18.5% so far.
(Editor's Question - Over what time period? -IK)
Bought it in May and June '97. So far I'm 20% ahead.
You might want to confirm this, but I believe the S&P 500 index is up
the same amount over the same timeframe.
------------------------------
Date: Mon, 22 Sep 1997 20:13:17 -0400 (EDT)
From: sprasad@hsmpk12a-61.Eng.Sun.COM (Shankar Prasad)
Subject: Low-fee/No-fee IRA accounts
With the new tax law changes, I am thinking of opening an IRA for myself
and my wife, and I am also considering an Educ.IRA for my 2-year-old.
When I talked to mutual fund companies, it turns out that most of them
charge annual maintenance fees for IRAs. The fees are of the order of
$10/year/MF, so (for example), my IRA in two funds at Vanguard would get
a $20/year fee. Some of the fund companies additionally have other fees
which they apply when taking distributions or roll-over to different
company. Many funds offer waivers provided the IRA has a value of 10K/20K
etc - which is a long time away for me (I am just planning to open now,
and don't have any 401K rollover money etc). Particularly for the Edu.IRA
(with a limit $500/year), the maintenance fee is a very high percentage.
And, the spousal IRA are all charged separately.
I have also been wanting to open IRA with a discount brokerage (hopefully
with a wide range of no-transaction-fee mutual fund offerings) to avoid
having to keep doing 'rollovers' everything I wanted to (for example)
sell Invesco funds and buy Oakmark funds.
I am looking for suggestions about fund families / discount brokerages /
online brokerages who offer cheap or free IRAs, with a reasonable level
of access to no-transaction-fee mutual funds.
Also, "Dalmia, Bipin K." <DALMIABK@phibred.com> wondered whether we
should still track cost-basis of home-improvements etc, given the current
cap-gains exclusion on home sales. I would say, YES, track cost-basis
still. When the time comes to sell, there is no guarantee that you would
qualify for the cap-gains exclusion - maybe, due to personal reasons, you
had to move out of the house for a long time; maybe, (GRIN) the house has
appreciated so much that the gain is more than 500K; maybe, the law is
changed again and takes away this benefit. There are too many variables,
it would be wise to track cost-basis of your home. There is no significant
cost to doing so, I guess (I imagine that you would need to keep a small
statement of cost-basis, and supporting receipts with dates etc).
- --
Regards
Shankar Prasad
sprasad@eng.sun.com
------------------------------
Date: Mon, 22 Sep 1997 20:14:02 -0400 (EDT)
From: Vicki Simons <probe@scescape.net>
Subject: Check writing software?
My company is at the point where we need to purchase software that will
allow us to accept check information by phone, fax, or E-Mail, and write
the checks on our end. There are many such programs available
(including shareware), ranging in price from $20 to $395; we have
reviewed a number of the programs through downloadable demos, and have
been severely disappointed.
This past weekend, we found (and downloaded a demo of) a piece of
accounting software that includes check writing capabilities: Peachtree
First Accounting. According to the Critics Choice link on the company's
site <http://www.peachtree.com>, CD Rom World was quoted as saying
Peachtree Accounting is "Head and shoulders above Quickbooks."
I'd appreciate private comments from anyone who has used a Peachtree
product (How do you like it?), or compared Peachtree and Quickbooks
(In your opinion, how do they compare?). Thanks in advance.
- --
Vicki Simons Probe Consultants probe@scescape.net
------------------------------
Date: Mon, 22 Sep 1997 20:14:33 -0400 (EDT)
From: ANDREA WELCH <ACE.AWELCH@MEMO.ACEHARDWARE.COM>
Subject: Small Business Questions
I am currently in negotiations to purchase (with a partner) a
small Chicago coffee house that has been a profitable business for
the past six years. I really don't know where to turn for
guidance in this matter since this is the first time I've ever
considered such a purchase. I realize that a good attorney is
probably going to be required, but even in that regard I'm not
sure what type of specialty I should be looking for in legal
assistance.
I've already made the rounds of the Small Business Administration
web site and while helpful it's not really what I'm looking for.
I'd like to get information on just how to value the business to
see whether or not I'm being offered a good deal or not. I'm also
looking for guidance as to the best way to set up ownership for
such an enterprise. Also, with coffee houses being so popular
now, has anyone encountered specific information concerning this
type of business?
Any information furnished, referrals to web sites, book
recommendations, etc. would be very welcome. Thank you.
Regards,
Andrea
------------------------------
Date: Mon, 22 Sep 1997 20:15:11 -0400 (EDT)
From: dmak@tma-net.org
Subject: Auto Accident-Pay Myself or Claim?
I bumped into the front corner bumper of another car, causing some
paint to scrape off of the other car (but no damage to my car). I
estimate the repair to run maybe $200-$400.
Is it wiser to pay this myself so I won't have a record on my
insurance policy or let insurance pay since it's so small? My
insurance company says that claiming it will NOT affect my rates
since the accident was less than $1000 in damages. I have not had
any claims in 3 years with this insurance company.
------------------------------
Date: Mon, 22 Sep 1997 20:16:12 -0400 (EDT)
From: kristina@net.com (Kristina Miranda)
Subject: What is this all about?
I got this email the other day and I don't really believe it but I was
wondering if anyone else knows anything about such a group and what their
scam actually is? I'm guessing you pay alot of money and then they talk
down your debts or something? Any ideas?
Thanks,
Kristina@net.com
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------------------------------
End of persfin-digest V4 #85
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