Go to Jeff Salisbury LWGate Home Page.From: persfin-digest <owner-persfin-digest@shore.net>
Subject: persfin-digest V4 #123
Date: Thu, 29 Jan 1998 20:59:50 -0500 (EST)
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persfin-digest Thursday, January 29 1998 Volume 04 : Number 123
IN THIS ISSUE:
ADVERTISEMENT: LAN ACCESS TO MCI MAIL
Re: Capital Gains Distributions
Re: Inheritance Tax Question
Roth Vs 401-K
Re: How do u organize your finance records
Re: 28% cap gains distributions
Re: Real-Estate Taxes Question
Re: How do u organize your finance records
Dow Forecast for 1998
Liability Insurance for Computer Consultants
Re: Best Personal Finance Book?
RE: S&P 500 Index Fund
Ripoffs (sort of)
Tax Question: Board & Care Expenses for senile parent
Digging out of debt - Looking for Participants in News Story
Vanguard Tracking Newsletter?
Quicken tips Web Site
Re: AT&T
Tax deffered accounts...........
correction to Capital Gains.... post
Capital Gain Distributions, Massachusetts, and Vanguard
Re:The in-between years - Best Investment?
Beware of Roth IRA in MA (for now)
Re: UGMA vs. Education IRA
Investment calculators
Claiming Loss On Taxes Due to Unpaid Vacation
stock ex dividend - Reflected in Share Price?
Cost Basis Formula?
Will Impeachment Talk Affect Investments?
Inheritance Question
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Date: Thu, 29 Jan 1998 20:17:03 -0500 (EST)
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------------------------------
Date: Thu, 29 Jan 1998 20:17:50 -0500 (EST)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: Capital Gains Distributions
[Disclaimer: this is my opinion, not advice. I am not a professional.]
>line 13 of 1040 from said capital gain or loss attach schedule d page d-1
That is correct.
>of instructions use schedule d for capital gain distributions must be
>reported on sch.d in all case page 69 of publication 17 report capital
That is correct.
>gain distributions as long term capital regardless of how long you
>owned them
That is also correct.
>capital gain distributions will be show in box 1c of form 1099-div
>SHEDULE D NOW HAS 54 LINES
>i still trying to find more info. on it
As the instructions say, you report the entire Box 1c amount on Sched
D line 13 column f. You then report the part of Box 1c which
represents mid-term (so called "28%") gains on line 13 column g. Your
1099-DIV will either directly give you the number to put in line
13(g), or else the fund will send along a supplemental sheet which
will give you the information you need to compute the "28% gains" from
the Box 1c number.
------------------------------
Date: Thu, 29 Jan 1998 20:18:31 -0500 (EST)
From: "Ken Meinken" <kmeinken@bigfoot.com>
Subject: Re: Inheritance Tax Question
>
> If the deceased Betty Rubble wills 15% of her $200,000 estate to her nephew
> BamBam Flintstone, should Bam- Bam's inheritance be subject to any taxes?
> e.g. Income tax (Federal/State)? Inheritance tax?
>
> Wilma (Bam-Bam's mom) is the executrix of Betty's Estate. Wilma's lawyer
> told her that the inheritance will be subject to inheritance tax and that
> the $600,000 exemption applies to spouses only.) This sounds wrong to me.
> Any answers or resources would help, as Wilma asked me to look into it for
> her.
If a lawyer told her that the $600,000 exemption applies only to
spouses, I strongly suggest:
1) she find another lawyer or cpa
2) she report the current lawyer to the state bar for disbarrment.
Such advice (if indeed he told her exactly that) is so wrong that IMO
he ought to be jailed.
The marital deduction is unlimited. The $600,000 exemption applies
to others than spouses. (And it could be reduced if the deceased had
gifted more than $10,000 in one year to an individual).
The *estate* pays the inheritance tax before it is distributed. The
receiver does not pay any tax.
As for reference, I would suggest IRS publictions, or a good
financial book (check the library).
Ken
------------------------------
Date: Thu, 29 Jan 1998 20:19:06 -0500 (EST)
From: hrj@juno.com
Subject: Roth Vs 401-K
There has been a lot of discussion recently about Roth IRAs. One question
was whether a contribution to a 401-K was better than the same
contribution to a Roth IRA. One answer was that it was better to put
$2000 in a Roth than to put $2000 in a 401K(non matching). It is true
that you will have more money when you begin to take distributions if you
invest in a Roth assuming the investments appreciate the same and the tax
rates are the same when you invested and when you take the distribution.
But this answer is misleading as I will show.
To put $2000 into a 401-K you use $2000 of earned income since the taxes
will be deferred. If you took that same $2000 of earned income you will
be taxed on that amount if you invest it in a Roth. In order to make a
meaningful comparison, you should only consider the after tax amount
going into the Roth. Assume a 30% combined tax rate and a 300% return
before taking the distribution, Then you will have $1400 for the Roth
from the original $2000 of earned income. The 401-K amount will
appreciate to $6000 and be subject to the 30% tax, leaving a net of
$4200. Guess what happens to the Roth? It will appreciate to the same
$4200 and not be subject to taxes. With respect to taxes in our example,
the Roth is not better than a 401-K but gives the same result. In other
words, it is revenue neutral to the government.
Conclusions I draw from this, considering taxes and total return, but not
other factors:
1. If you believe that your tax rate will be the same in retirement, it
makes no difference return wise, if you put X-dollars earned income in a
401-K or Roth IRA.
2. If you believe that your tax rate will be lower in retirement, a 401-K
investment is superior.
3. If you will be in a higher bracket in retirement, the Roth is
superior.
If you believe the rates will be the same or lower, then you may want to
contribute up to the max in the 401-K before putting money into the Roth.
Then the Roth can be funded by any additional money that you have
available for retirement investments.
Other factors to consider:
The above does not address the flexibility offered by a Roth where you
can remove money from a Roth before you are 59 1/2 if you meet specific
conditions. Before considering the best way to mix a 401-K(or other tax
advantaged investments), you need to consider the whole picture. There is
not a one shoe fits all answer.
Harold Justice
------------------------------
Date: Thu, 29 Jan 1998 20:28:12 -0500 (EST)
From: Baynon <Toothdoc@Liii.com>
Subject: Re: How do u organize your finance records
I recommend going to a HOME/OFFICE store (like OFFICEMAX or STAPLES)
and getting a bunch of FILES that can be labeled. And possibly some
large plastic filing bins if you do not already have a file cabinet.
The best way to go through your belongings is using the "TRAF"
method. That is that EVERYTHING on your desk can be catagorized into
one of the following:
1) Trash
2) Refer (give to someone else to handle it)
3) Act on (bills to be paid, etc)
or
4) File.
My above recommendation will help you manage those that you deem
should be FILED.
Good luck,
Cliff Baynon
- --
mailto:ToothDoc@Liii.com
------------------------------
Date: Thu, 29 Jan 1998 20:29:09 -0500 (EST)
From: Steve Foulks <steve_foulks@up.bresnan.net>
Subject: Re: 28% cap gains distributions
>From: Rich Carreiro <<rlcarr@animato.pn.com>
>Subject: 28% cap gains distributions
>I don't know what other fund families are doing, but I just got my
>1099-DIVs from Vanguard today. They have explicitly reported the
>mid-term gains on the form (saving you the trouble of having to
>multiply cap gains distributions by percentages given in a
>supplementary sheet), even illustrating where on your tax forms the
>numbers go.
>Rich Carreiro
I have a problem with this process. I own some Fidelity and American
Century mutual funds outside of tax sheltered savings. They assume that
you use FIFO for determining your sale cost basis. But FIFO is
<underline>not</underline> required. I generally use specific
identification. I tell them to sell the following lots over the phone
when I chose to sell, and then follow it up with a letter. Of course
they could care less which purchase lots I sell. I do that for tax
purposes only.
The main point of my message is that they don't report the calculated
gains using their method of costing these securities. For most people it
is simple just to use their calculations, but you aren't required to do
so. Did you ever check to see if their calculation was correct? I would
be curious.
Steven M. Foulks, CPA, CFP, PhD
Professor of Accounting & Finance
Northern Michigan University
<<http://www.acs.nmu.edu/instruct/business/sfoulks/default.html/>
------------------------------
Date: Thu, 29 Jan 1998 20:30:06 -0500 (EST)
From: Steve Foulks <steve_foulks@up.bresnan.net>
Subject: Re: Real-Estate Taxes Question
>From: "David J. Churchill" <churchilld@worldnet.att.net>
>
>How does the 1997 tax law affect "recapture" of depreciation on rental
>property which was purchased in 1982? Prior to the most recent tax
>changes, recapture of depreciation was taxed, in most cases, at the
>taxpayer's marginal income tax rate? Has this now been changed to some
>other max rate such as 20% for long-term capital gain?
The real estate property you mention is what is referred to as "1231"
property and the "1231 gain" associated with this property has a special
maximum rate of 25%, under the new law. The process for depreciation
recapture for 1982 property has not changed however.
Steven M. Foulks, CPA, CFP, PhD
------------------------------
Date: Thu, 29 Jan 1998 20:30:42 -0500 (EST)
From: Steve Foulks <steve_foulks@up.bresnan.net>
Subject: Re: How do u organize your finance records
I think the first thing you need is a money management program (Quicken,
Microsoft Money, or Managing your Money). These are especially good for
tracking the information necessary to prepare tax returns, but you are
still required to keep the source documents for tax purposes. I keep my
investment data (data which has tax effects for many years) by security in
a separate folder. One thing that I have noticed a lot of people do is to
save everything they ever get from a company, say in a DRIP plan. All you
need to save is the last statement for the year which summarizes all
transactions.
I put the annual tax data (only effecting one year in a folder like you do).
Steven M. Foulks, CPA, CFP, PhD
------------------------------
Date: Thu, 29 Jan 1998 20:31:31 -0500 (EST)
From: "Grady" <gcash@volusianet.net>
Subject: Dow Forecast for 1998
Last year at the end of January, I issued a forecast for the Dow
Jones Industrial Average to close at 8,000 on Dec 31, 1997. (At
the time, the DJIA was around 6,600.)
On Dec 31, 1997, the DJIA closed at 7,908. It briefly traded over
8,000 on the second trading day of 1998. ...So that's a pretty
accurate forecast!
I doubt if I'll be as lucky this year, but I'll look into my crystal ball
for the December 1998 DJIA close in the next few days.
Meanwhile, persfin readers, where do you think the market will go
this year?
Will it be up, down, or sideways?
What will be the best industries for investment in 1998? I'm
especially interested in this... as it appears so far that 1998 will
be a down year for the Dow.
Grady Cash, CFP
------------------------------
Date: Thu, 29 Jan 1998 20:32:16 -0500 (EST)
From: "Steven J. Kroeger" <skroege@nswc.navy.mil>
Subject: Liability Insurance for Computer Consultants
Am looking for a source for Liability insurance 1megs worth as directed by
our CPA. Am wondering what the liabilities are as computer consultant and
what the cost of this (professional Liability) is? Any sources would be
appreciated.
------------------------------
Date: Thu, 29 Jan 1998 20:33:02 -0500 (EST)
From: "Rao, Bharat" <bharat@scr.siemens.com>
Subject: Re: Best Personal Finance Book?
> What's the best personal finance book available on the market? Any
> comments on "Everybody's Money Book"?
My favorite is Jane Bryant Quinn's "Making the Most of your Money" Make
sure you get the 1997 edition (subtitled something like "A Blueprint for
the 21st century") -- it is a revised version of a 1991 book with the same
main title.
Retails for about $30 in Barnes & Noble, but you can get it from
amazon.com for $21 +S&H
Bharat
R. Bharat Rao, E-mail:bharat@scr.siemens.com [PGP WELCOME]
------------------------------
Date: Thu, 29 Jan 1998 20:36:38 -0500 (EST)
From: "Rao, Bharat" <bharat@scr.siemens.com>
Subject: RE: S&P 500 Index Fund
1. I want to invest a S&P 500 Index fund. I like Vanguard's low
costs, but not their 3000$ initial minimum. For me, putting 3000$
is not a problem. But the swings of index may make me to buy at
the tops than at the bottoms. I am looking for a fund that has
lower costs; lower initial requirements and easier subsequent
purchases over phone. TR Price has lower initial if I chose their
asset builder. They are good at executing the purchases over
phone and money gets deducted from my local checking a/c
automatically.
But their costs are 0.40% - 0.45% comparad to Vanguard's 0.20%.
Seven Seas S&P 500 fund costs iaround .20%. But
they increased the initial fund requirements to 10,000$ from
12/27/97.
One reason index funds do not allow phone purchases, is because they
don't want people to use them for market timing -- quick in and quick out
market timers drive up the costs for the funds (which may tell you why TR
Price has higher expenses).
My question is : Is it worth to pay the extra higher costs for
a "chance" to buy the funds on times when market takes hits. If one
were to hold the fund for longer time, will the higher costs eat the
benefit of the initial savings ?
IMO, this is attitude is wrong. It is tremendously hard to time the
market without a lot of study, patience, research, and funds -- and even
so, you probably won't do a whole lot better than a coin flip. I'm not
saying that market timers die broke (though there are some who will say
that:-), just that its hard to do right. To be a market timer you need to
not only get out before it drops, but get back in at the right time.
Presumably you are investing in equity funds for the long haul -- in
which case, it will pretty much wash out in the long run. What will NOT
wash out is the higher expense costs; you will have to do consistenty 0.2%
better with your timing to just break even if you went with TR Price
rather than with Vanguard. Not worth the headache to me, but of course,
YMMV.
So, if you can afford the $3K as you say, then the lower expense 500
fund rates to be your better bet. (Also, subsequent purchases after
your initial $3K have substantially lower limits -- $500 or $1000.)
One more point -- if you have a young one, you can open a UTMA in
Vanguard, and these funds have a $1000 minimum; also IRAs have
a $1000 minimum.
2. My 401K plan offers S&P 500 Index fund, Medium Company Blend
and Medium Company Value, Small Cap Value and 4 Bond Funds. My
portfolio is heavy on S&P 500 as S&P 500 fund is beating all the other
offerings handily and consistently. Is it a good strategy to hold
S&P 500 fund as a major holding in 401K plan since S&P 500 funds
are supposed to tax- efficient anyway because of their low turnover,
but some dividend distributions.
Thats a pretty nice mix your 401K plan offers. As for what to do,
it depends on how much you believe in history. Before 1990,
small cap stocks significantly outperformed large-cap stocks
for about 70-100 years (14% vs. 10% roughly / year). In the
1990s, this trend has reversed, with large-cap stocks, being
the big winner. So does this represent a fundamental change
in the market, or is this an abberation -- different people will
say different things, but no one really knows.
My view is that in the long run (but the long run may be longer
than our lifetimes) market conditions should benefit well-managed
small and midcap companies, more than large cap -- but I'm
no investment advisor --caveat emptor.
You really can't go wrong by staying invested heavily in the
S&P500 -- thats roughly 70% of the US stock market. Some
diversification is probably a good idea though.
One way (and by far the simplest way) to do it, is to assign
a fixed %age to each of your funds (and the same %age to
your contributions), and "balance" the funds once a year/quarter
back to those %ages. So an example investment strategy
might be S&P 50%, midcap 20%, small cap 30%. This
"balancing" will allow you to do what you want - buy low,
and sell high. If you have an international fund, now
may not be bad time to start a small 5-10% investment in
your 401(k).
Another strategy is to try to time the market. Have a slider
of %ages for your investments -- say S&P between 30%
and 75%, and similarly for others, and try to pick the slider
positions every quarter based on how the market may swing.
Good luck. I'm a firm believer of KISS myself...
3. Can you suggest some good "Value" funds in LargeCap, MidCap.
Vanguard has a couple of funds that use the S&P Barra Value/Growth
indices. I think the value fund may be pretty good.
Caveat emptor: this advice is free, so you can guage for
yourself just how much it is worth:0-)
Bharat
R. Bharat Rao, E-mail:bharat@scr.siemens.com [PGP WELCOME]
------------------------------
Date: Thu, 29 Jan 1998 20:39:40 -0500 (EST)
From: BOB FORD <BOB_FORD@compuserve.com>
Subject: Ripoffs (sort of)
There are two recent developments in the consumer debt field that everyone
should be aware of.
The first is the practice of charging daily interest on your mortgage. On
a "normal" mortgage that is due on the first of the month, you have a
grace period of typically 10 to 15 days before a late penalty is applied.
If you pay the mortgage within the grace period, the lender considered it
to be paid when it was due. Some lenders now still give you a grace
period before a late charge is assessed but charge daily interest from the
due date.
For example if your mortgage was due on the first of the month and they
received your payment on the tenth of the month they charge you 10 days
additional interest. Although this is legal, there is no
requirement that the lender tell you they calculate your mortgage interest
this way.
The best thing you can do is check with your lender to see if the balance
owed on your mortgage is what you would expect it to be using "normal"
accounting or if they charge daily interest.
The second newly legal tactic for credit card companies to collect back due
debt is to threaten to give you and the IRS a 1099 for the amount owed
them. They can say they have written off the debt and the amount owed was
income to you and you should pay taxes on it. There is a big question of
what happens if they issue a 1099 and then you do pay the debt. The IRS
answer is that you have to file an amended tax return to get the tax you
paid back.
BOB FORD
BOB_FORD@COMPUSERVE.COM
Editor 57-56-55 CHEVY LIST
------------------------------
Date: Thu, 29 Jan 1998 20:40:42 -0500 (EST)
From: ADELE_FISCHER@HP-Sunnyvale-om5.om.hp.com
Subject: Tax Question: Board & Care Expenses for senile parent
I would welcome some information on how to treat charges that my mother
has to pay for her on-going board and care. She is suffering from
senile dementia and is 92 years old.
I use Quicken to prepare my mother's income tax returns and in the past
have not subtracted charges for her residential board and care nor
charges for her attendance 3x/week at community Elder Day Care.
Could any part of these charges be subtracted on her return? What IRS
publications should I be looking at?
Any help would be appreciated. Thank you.
------------------------------
Date: Thu, 29 Jan 1998 20:41:38 -0500 (EST)
From: Margi Mannix <MMannix@usnews.com>
Subject: Digging out of debt - Looking for Participants in News Story
A national news magazine is looking for consumers who are
digging their way out of debt (or who have recently done so).
We're primarily interested in how you are eliminating debt (what method),
how difficult/easy it is/was, what keeps you motivated, etc.
If you are interested in participating, please email me at the above
address. Thanks in advance for your consideration.
------------------------------
Date: Thu, 29 Jan 1998 20:42:05 -0500 (EST)
From: GeorgeS <pip@shore.net>
Subject: Vanguard Tracking Newsletter?
Hi,
Can anyone tell me the name & phone number of a newsletter that tracks
Vanguard funds.
TIA
george
------------------------------
Date: Thu, 29 Jan 1998 20:45:06 -0500 (EST)
From: Jason Kaufman <JHK@copper-mt.com>
Subject: Quicken tips Web Site
This site is a good start for all Quicken users...it talks about tips
and tricks to make Quicken behave like we want.
CNet has updated its list of tips for Quicken users. There are now
68 suggestions for making the popular personal finance program easier
to use and more powerful.
http://www.cnet.com/Content/Features/Howto/Quicken/
related page: http://www.investorguide.com/Software.htm
Jason H. Kaufman
Portland, Oregon 97204
E-mail: JHK@copper-mt.com
------------------------------
Date: Thu, 29 Jan 1998 20:46:16 -0500 (EST)
From: Scribler <scribler@geocities.com>
Subject: Re: AT&T
>>> I currently have $0.10/min. 24 hours a day with no monthly fee from AT&T.
>>> Normally, there is a $4.95 monthly fee, but if you ask, they will waive it
>>> for 6 months. I'm planning on calling back at the end of 6 months and
>>> getting them to waive it again.
>>> Chris Yohn
>>> yohn@saturn.med.nyu.edu
>>>
>>
>>Is this a residential phone? What is the name of the "plan" for this rate?
>>
>>TIA
>>Chen
>
>Yes, it is a residential phone. The name is "One Rate Plus." You can find
>more info on the plan on AT&T's web site at
>
>http://www.catalog.att.com/cmd/onerate/ They do not mention that they will
>waive the fee for 6 months - no surprise there. But all you have to do is
>ask. - Chris Yohn
I called them, and spoke with the superviser who offered to
give me certificates for $6.00 for next six months
which not only covers the monthly fee but leaves me with
a cool $1.05 in change!
- -Scribler
------------------------------
Date: Thu, 29 Jan 1998 20:46:46 -0500 (EST)
From: Nikhil Subhash Sarpotdar <nikhil@mozart.ee.umn.edu>
Subject: Tax deffered accounts...........
HI!
Since its tax time I was wondering if anybody of the learned
people has any inputs on these issues :-)
1) Does it make any sense at all to hold foreign stock in a Tax-deffered
or Tax free plans (an IRA for instance). I ask this because then you loose
the deduction for foreign taxes paid. Should one as a rule not own foreign
equity in such plans or is there a rule of thumb that you like to use and
if so I would love to hear it.
2) It is desirable that we hold low current income producing instruments
in your taxable accounts. Does this mean that REITS and REIT funds should
necessarily be owned in tax-deffered accunts as these are traditionally
(actually by law) high dividend producing investments.
Would appreciate any thoughts or inputs.
Thanks and have a nice day.
Nikhil
------------------------------
Date: Thu, 29 Jan 1998 20:47:32 -0500 (EST)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: correction to Capital Gains.... post
The 3% rate comes on line this year (i.e. tax year 1998), not next
year as I stated in my post. However, only the 5% and 4% rates were
active for tax year 1997.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Thu, 29 Jan 1998 20:48:10 -0500 (EST)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Capital Gain Distributions, Massachusetts, and Vanguard
People who are MA residents might realize that long-term capital gains
are now taxed at two rates by the state. The rate is 5% for gains on
sales of assets held 1 to 2 years and 4% for gains on sales of assets
held more than two years (holding period starts the later of 1/1/95 or
actual purchase fate). This carries over to capital gains distributed
by mutual funds -- the part of cap gains distributions from stocks the
fund held for 1-2 years is taxed at 5%, the part from stocks held more
than two years is taxed at 4%. If one is unable to figure out how to
apportion the cap gains distribution, it is taxed at 5%. Starting
next year a 3% rate comes on line (for gains on assets held 3-4
years), the year after that a 2% rate and so on down to 0% for gains
on assets held over 6 years.
I wanted to report that Vanguard has sent out supplemental sheets listing
the percentage of 1099-DIV Box 1c cap gains distributions that qualifies
for each rate of taxation (as stated only the 5% and 4% rates currently
exist).
Does anyone know if other fund families are giving MA shareholders these
breakdowns? Does anyone know if the funds are doing it as a customer
service or if MA law requires them to do so?
Thanks!
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Thu, 29 Jan 1998 20:48:45 -0500 (EST)
From: GeorgeS <pip@shore.net>
Subject: Re:The in-between years - Best Investment?
>What is the best investment (type) to provide for the years between
>"retirement" and age 55/60 when we will have unlimited access to our
>IRA's/401(k)s/etc.
SFAIK, you can tap these resources anytime all you have to do is withdraw in
equal amounts based on your projected life span according to government
publication XXX (sorry I cannot remember the number of the IRS mortality tables)
>The issue I guess is whether or not it is better to invest as much as
>possible in the tax deferred vehicles, and plan on paying the penalties
>when we withdraw the money, or paying taxes now and investing in index
>funds or other tax _managed_ vehicles.
Remember, except for Roth, income comming out of an IRA/401K/403B/Keough is
taxed as ordinary income (~39% marginal rate). Income comming from a
realized long term capital gain is taxed at ~18%, considerably lower than
the highest marginal rate.
------------------------------
Date: Thu, 29 Jan 1998 20:49:36 -0500 (EST)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Beware of Roth IRA in MA (for now)
If you are a Massachusetts resident, you might want to think twice
about opening (or converting to) a Roth IRA right away.
Massachusetts defines income by using the definition of income in the
Internal Revenue Code as it existed January 1, *1988* and then
modifying that definition for MA-specific stuff. There is, obviously,
no mention of Roth IRAs in the 1988 IRC.
According to CPAs and EAs in newspaper columns I have read, this means
that until MA changes its tax law *earnings in Roth IRAs will be
taxable by MA*
Now, it is fully expected that the law will be changed, especially
given the power of the mutual fund/financial industry in the state, so
one could argue that a change is inevitable before the year is out so
just go ahead.
However, until the change is actually passed, there's always the
chance (even if small) that it won't happen, so one might still want
to hold off opening any Roths until it is definite.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Thu, 29 Jan 1998 20:50:06 -0500 (EST)
From: krishnan@juno.com
Subject: Re: UGMA vs. Education IRA
Hi Persfiners,
A few months back, some one had given three specific reasons for choosing
UGMAs instead of Education IRAs?
I did not pay much attention then but now we have a new born in the house
and would like to start a small monthly ($25 or $50) automatic investment
plan for college.
Can some experts give me their take on this subject....[Also, what
happens if one opens an Education IRA and one's child decides not to go
to college. Please advice]
Krishnan
------------------------------
Date: Thu, 29 Jan 1998 20:50:48 -0500 (EST)
From: "Molly K. Parsley" <parsley@cybernautics.com>
Subject: Investment calculators
I have recently started using the Electra site as an investing reference.
It's a women's site but the money section is particularly helpful. There
is a page of Home Loan calculators that will figure out how much you can
save, which terms are better, etc. There is a section of investing
calculators as well.
http://www.electra.com
- -Best
Molly Parsley
San Francisco, CA
email: parsley@cybernautics.com
------------------------------
Date: Thu, 29 Jan 1998 20:51:18 -0500 (EST)
From: "mike morehouse" <mikemore@hotmail.com>
Subject: Claiming Loss On Taxes Due to Unpaid Vacation
Dear Persfinners,
I'm not asking for tax advice just for personal experience. I was laid
off by my former company in late Aug. 1997. We received no severance of
any kind. At that time I had 2 wks, of accrued vacation that I had not
used. At the Company, vacation was earned in one year to be used in the
next.
Since this was a benefit I was due but had not used - would the dollar
value of that (about $2000.00) be deductible on my taxes as a loss?
Any ideas or info would help. I will likly end up asking a tax
accountant this question but I'd be interested in any responses.
Thanks,
Mike Morehouse
mikemore@hotmail.com
------------------------------
Date: Thu, 29 Jan 1998 20:52:24 -0500 (EST)
From: Steven Klein <SKLEIN@snm.org>
Subject: stock ex dividend - Reflected in Share Price?
I own stock in pfizer. They declared a dividend payable on March 12, to
all holders of record on 2/6/98. The dividend is 3/16 per share. The
question is- When will this dividend be reflected in the share price?
Thanks,
Steve K.
------------------------------
Date: Thu, 29 Jan 1998 20:53:07 -0500 (EST)
From: aviray@juno.com (Avi Bistricer)
Subject: Cost Basis Formula?
What is the formula to calculate the cost basis of stocks?
I buy and sell odd amounts of shares many times a year.
(I may buy 3 shares one month, sell 10 the next, buy 2 the
next... etc) I also reinvest the dividends.
One trick is that I get a 10% discount on the purchase that
is reported as income to me on W2.
Thanks
------------------------------
Date: Thu, 29 Jan 1998 20:53:58 -0500 (EST)
From: "Grady" <gcash@volusianet.net>
Subject: Will Impeachment Talk Affect Investments?
As the fire storm surrounding the President grows, how will the
talk of impeachment affect the stock market? After all, this is
arguably the biggest event of the Clinton administration.
To find out, let's look at the Watergate proceedings two decades
ago.
>From the Watergate break-in on June 17, 1972 to Nixon's
resignation Aug 9, 1974, the S&P 500 dropped from 109 to 63... a
42% decline. It appears on the surface that all the talk of
impeachment means death to the bull market.
But when we look at the chronology of events leading to Nixon's
resignation, a different pattern appears.
Here's a brief look at events surrounding Watergate. For each
event, I've also indicated where the DJIA (Dow Jones Industrial
Average) stood at the 1st of that month. Sorry, I don't have the
data for the exact dates, but this should be close enough to make
the point.
Date DJIA Event
Jun17 72 929 arrest of burglars at Watergate
Sep15 953 Hunt, Liddy, others indicted
Jan 8 73 999 burglars convicted,
Feb 7 955 Senate Watergate committee
established
Apr 6 921 John Dean flips. Cooperates with
prosecutors
Apr 30 921 Attorney General Kleindienst and 3
Nixon aides resign
Jul 16 926 Nixon's tape recordings revealed
Aug 29 887 Judge Sirica orders Nixon to give up tapes
Oct 19 956 ***Arab oil embargo***
Oct 20 956 Cox fired as prosecutor. Attorney
General Richardson resigns
Mar1'74 846 Seven former presidential aides
indicted in cover up.
Mar 16 846 OPEC members lift oil embargo
May 9 802 ***House Judiciary Committee begins
impeachment hearings***
July 24 757 Supreme Court orders Nixon to
surrender tapes
July 27 757 House Judiciary Committee votes 27-11 to
approve impeachment for obstructing
justice.
Aug 5 678 Nixon releases tapes
Aug 7 678 Senior congressmen advise Nixon that
chances of avoiding impeachment by
house and conviction by Senate are
"gloomy"
Aug 8 678 Nixon announces that he will resign
Aug 9 678 Nixon resigns
Sept 9 607 Ford pardons Nixon
>From a review of the historical facts, several points become
evident.
1. Impeachment, should it even occur, will take a LONG time, not
days or weeks like TV pundits are claiming.
2. The stock market was not effected significantly until the Arab Oil
Embargo, marked by asterisks (***).
3. The next major decline (after the oil embargo and marked by
asterisks ***).) came only after the House Judiciary Committee
began impeachment hearings in May 1974, nearly two years
AFTER the Watergate burglary arrests.
The implications?
Earnings will have a bigger impact on the market in 1998 than talk
of impeachment, until - and if - the House Judiary Committee
begins impeachment hearings.
What are your thoughts?
Grady Cash, CFP
Disclaimer: Assume I was born yesterday.
------------------------------
Date: Thu, 29 Jan 1998 20:55:05 -0500 (EST)
From: Gigi Kent <gkent@postbox.acs.ohio-state.edu>
Subject: Inheritance Question
Recently, upon the death of my uncle, I came into an inheritance, and have
some questions I hope you can help me with.
The assets are/were in a living trust and the estate will pay taxes on the
trust through the date of death. My share of the assets will be
transferred, once a year for 5 years, into a Charles Schwab account which I
will need to open. The assets are in stocks, bonds and money market funds.
The letter I received states that I will be responsible "for paying taxes on
the increased value of the securities and dividends distributed to you after
that date (of death)." What does this mean? Certainly I'd be responsible
for increases related to dividend and interest, but what do they mean by
"value of the securities"? What is the cost basis in a living trust?
Since my uncle died in 1997, will I have any tax consequences in 1997 as a
result of the inheritance? The assets will be distributed beginning in 1998.
Are there any other questions I should be asking?
Thanks for your help.
Gigi
------------------------------
End of persfin-digest V4 #123
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