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Subject: persfin-digest V4 #136
Date: Sun, 22 Mar 1998 09:09:24 -0500 (EST)
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persfin-digest Sunday, March 22 1998 Volume 04 : Number 136
IN THIS ISSUE:
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Re: option quotes
Re: Math Compounding Question
Re: Stock Basis in Living Trust
Re: spousal Roth IRA - why the phase-out?
Option quotes
Re: In-Kind Gift Valuation
Re: State Income Taxes
Re: In-Kind Gift Valuation
Re: option quotes?
Option trades not reported on 1099 form?
Referrals on Financial Planners....
Re: NY State Income Taxes On Income Earned In Florida
RE: Conversion from Regular Non Taxed IRA to a Roth IRA
Re: option quotes?
Rules for 401(k) transfer due to merger
Bridge Loan: Is it a good idea?
Re: NY State Income Taxes On Income Earned In Florida
Long Vs Short term sales of Mutual Funds
Roth IRA for 81 year old Father In Law?
Updating portfolio in Quicken 4.0?
portfolio allocation?
House buying tax implications.........
IRA "Recaluation"?
Re: SFNB Bank Problem
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------------------------------
Date: Sun, 22 Mar 1998 08:33:01 -0500 (EST)
From: Randy Barnes <rbarnes@atl.mindspring.com>
Subject: Re: option quotes
>
> Can anyone tell me where I can receive option quotes? I am looking for
> a site which shows the security, various strike prices and dates all on
> one table. Any good ideas how to remember that cryptic syntax which
> must be entered to get a quote?
For quotes go to Wall St.'s forgotten stepchild the American Exchange at
http://www.amex.com click on options then Equity Options, and entry your
stock symbol.
you don't need to know the option codes here.
Find a good strategy lesson here:
http://www.numa.com/derivs/ref/os-guide/os-0.htm
I'm trying to figure 6 option trades into my tax return right now and
find that that's another thing entirely. Good luck!
- -Randy Barnes
------------------------------
Date: Sun, 22 Mar 1998 08:35:48 -0500 (EST)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: Math Compounding Question
>I am trying to determine the present value of a series of 20
>bimonthly cash flows. In the compounding formula, do I divide the
>interest rate by 20 or 26?
26, because you want to relate the annual rate to the per-period
rate, and there are 26 bi-monthly periods in a year.
>Same question for a series of 10 monthly payments: do I divide the
>interest rate by 10 or 12?
12, because there are 12 monthly periods in a year.
One question you may want to ask yourself is whether you should be
dividing the rate by 26 (or 12) or if you should be raising 1+rate to
the 1/26 (or 1/12) (i.e. is the denominator for the N-th period
(1+R/26)^N or (1+R)^(N/26)?) In some sense the latter is "more correct",
but the former can make sense, too (for example, mortgages *are* figured
by using the arithmetic monthly rate of R/12 where R is the annual rate
instead of the geometric monthly rate of [(1+R)^(1/12) - 1]).
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Sun, 22 Mar 1998 08:36:18 -0500 (EST)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: Stock Basis in Living Trust
>I have a question about how inheritance of stock would be handled with
>a living trust. If the stock is held in the trust at the time of death
>of the person who set up the trust, what is the cost basis for the
>successor trustees who receive the stock? I know that if someone
I don't know that your post has enough information to determine the
answer. If the trust is a (hope I get the buzzwords right :-)
revocable grantor trust, then there should be a basis step-up at death
as such a trust has no tax effect (on either income or estate tax).
If it was something more complicated you really should consult with a
pro because it could get complicated, especially if any gift tax was
paid on the assets placed into the trust.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Sun, 22 Mar 1998 08:36:44 -0500 (EST)
From: Rich Carreiro <rlcarr@animato.pn.com>
Subject: Re: spousal Roth IRA - why the phase-out?
>>Finally, assuming you are filing jointly, your allowable *Roth IRA*
>>contributions gets phased out starting at an AGI of $150,000 (if you
>>file separately, it gets phased out at an AGI of $0 (no typo)).
>
>I'm curious why married folks filing separately suffer a phase out
>starting at an AGI of $0. Do you know what the legislative reasoning
>was?
I don't know what it was, but I'll bet it's the same reasoning why:
(a) If spouses file MFS and one spouse itemizes, the other spouse's
standard deduction is -$0-.
(b) If spouses file MFS and a given spouse is covered by a pension plan
at work, traditional IRA deductibility starts to phase out at a
modified AGI of -$0-.
(c) In almost all cases, spouses filing MFS will pay more taxes than
spouses filing MFJ.
Rich Carreiro
rlcarr@animato.pn.com
------------------------------
Date: Sun, 22 Mar 1998 08:38:11 -0500 (EST)
From: Grady <gcash@volusianet.net>
Subject: Option quotes
>Can anyone tell me where I can receive option quotes? I am looking for
>a site which shows the security, various strike prices and dates all on
>one table. Any good ideas how to remember that cryptic syntax which
>must be entered to get a quote?
Go to
http://cboe.pcquote.com/cgi-bin/cboeopt.exe
No need to remember syntax. It will show most options for the
next two expiration dates.
Grady Cash, CFP
gcash@volusianet.net
------------------------------
Date: Sun, 22 Mar 1998 08:38:50 -0500 (EST)
From: Richard Zahn <rzahn@ix.netcom.com>
Subject: Re: In-Kind Gift Valuation
I accidentally deleted the information on the book (and source of the
book) which gives suggested values for in-kind donations to charitable
organizations. Could someone please either post it again or email me?
Thanks, Elaine <esslady@ix.netcom.com>
Elaine -- Just go to:
http://www.asiweb.com/lincoln/cashbook.htm
Dick Zahn
Grand Rapids
------------------------------
Date: Sun, 22 Mar 1998 08:41:31 -0500 (EST)
From: "Rodin, Barry H." <brodin@pica.army.mil>
Subject: Re: State Income Taxes
>Subject: Re: NY State Income Taxes On Income Earned In Florida
>From: Bob Hartwig <rph1@mindspring.com>
>(moved to New York, income in Florida, pays NY state taxes)
Bob,
I can't understand how it's legal but unfortunately it's true.
It's New York's way of getting a piece of everybody's pie. I work in
NY and live in NJ along with my fiance. When we marry, NY will also get a
piece of her income EVEN THOUGH SHE WORKS IN NJ because again, they
look at the federal number.
FYI, other states (Connecticut for one) do the same.
GP
- ------------------------------
I don't know about NY or FL, but in New Jersey you could file
"Married Filing Separately".
You have to have the same filing status on the NJ return
as on the Federal return. But, under some circumstances
it is worth it.
Try it both ways and see!
Also, the State of residence usually allows you to deduct
State Income Taxes paid to another State.
Barry
------------------------------
Date: Sun, 22 Mar 1998 08:42:25 -0500 (EST)
From: Dennis_Vik@somasf.unm.edu (Dennis Vik)
Subject: Re: In-Kind Gift Valuation
>Subject: In-Kind Gift Valuation
>I accidentally deleted the information on the book (and source of the
>book) which gives suggested values for in-kind donations to charitable
>organizations. Could someone please either post it again or email me?
>Thanks, Elaine <esslady@ix.netcom.com>
There is a web site that gives details of values for various items,
including clothing. The URL is http://www.smbiz.com/sbrl007.html.
------------------------------
Date: Sun, 22 Mar 1998 08:43:24 -0500 (EST)
From: David Peterson <peterson@pcocd2.intel.com>
Subject: Re: option quotes?
Discover brokerage (www.discoverbrokerage.com) offers option quotes
in the form that you are requesting. However, to see all of the
different quotes for each strike price you have to have an account
with them. Otherwise you have to click on each symbol to get the
quote.
------------------------------
Date: Sun, 22 Mar 1998 08:44:48 -0500 (EST)
From: Vittalbabu Srinivasan <vittalbabu.srinivasan@autodesk.com>
Subject: Option trades not reported on 1099 form?
Last year I wrote some covered calls and naked put options. Some of them
I bought back, I was assigned on a couple while the rest expired
worthless. I noticed that the 1099 (from Charles Schwab) did not report
any option transaction to the IRS. Only the assignments were reported as
buy/sell of a stock.
Is there a reason why option trades are not reported to the IRS?
Thanks,
- - Vittalbabu Srinivasan
------------------------------
Date: Sun, 22 Mar 1998 08:47:04 -0500 (EST)
From: "Canalita, Chris" <ccanalita@ea.com>
Subject: Referrals on Financial Planners....
Hi Persfiners....
I've been lurking for awhile now and I finally have a question.
Can anyone in the Fremont, California area refer me to a Financial
Planner?
These are a few topics we need to discuss with this person:
College Investment Planning
I went to the Charles Schwab site to figure out how much money my wife
and I would need to invest for our (2) children (ages 6 & 3). After
playing around with it, I discovered that I would need to invest about
$800.00 a month for both of them to be in a public college. There's no
way we could afford this amount. The most we probably could afford to
invest is about $200.00 a month....which wouldn't even put a dent in
their college tuition. Anyone out there have any suggestions on what
would be the most beneficial investment plan for our (2) children ???
401K Planning
I have no idea on how I should invest my 401K contributions. I know my
company has different funds that we could invest in but I have no idea
on which fund or plan would be the most beneficial. How much should I
invest per paycheck?? Can our fund contribution be monitored on the web?
Please email me directly if you have any questions.
Chris Canalita
Electronic Arts
ccanalita@ea.com
------------------------------
Date: Sun, 22 Mar 1998 08:47:57 -0500 (EST)
From: David Martin <dmartin@seabreeze.hc.ti.com>
Subject: Re: NY State Income Taxes On Income Earned In Florida
I don't know about New York, but many states, such as VA, will
give you a credit for taxes paid to another state. So, in such a case,
you don't end up paying twice, just the maximum of what you would pay
in either state. Of course, Florida doesn't have an income tax, so
there isn't any credit to offset the NY taxes.
Greg writes:
> I work in NY and
> live in NJ along with my fiance. When we marry, NY will also get a
> piece of her income EVEN THOUGH SHE WORKS IN NJ because again, they
> look at the federal number.
Just one more way in which the tax code makes it a bad
financial decision to get married.
-David Martin
------------------------------
Date: Sun, 22 Mar 1998 08:49:19 -0500 (EST)
From: "Cal Lester" <cal_lester@email.msn.com>
Subject: RE: Conversion from Regular Non Taxed IRA to a Roth IRA
I am reading conflicting information as to the possibility of using a
portion of the proceeds from an old Non Taxed IRA to pay the tax due after
the conversion. I read that it can be done with little or no penalty vs:
double penalty if done. Allow me to pose a scenario:
Existing IRA value $100K, owner over the age of 59 1/2, current tax bracket
(for discussion) 20%
Transfer ALL of the IRA to a New Roth IRA in 1998.
Tax due ( payable over 4 years ) $20,000 ( @ $5,000 per year )
Since the money in the Roth Ira is "after tax money", withdraw 4/1/99,
penalty free (FIFO) $5,000
Send $5,000 to IRS.
(Roth IRA should have earned more than 5% for the year, so you should have
more than $100K)
Repeat for next three years
Does anyone see any problem with this scenario?????
Cal Lester
Cal_Lester@msn.com
------------------------------
Date: Sun, 22 Mar 1998 08:49:58 -0500 (EST)
From: "Dalmia, Bipin K." <DALMIABK@phibred.com>
Subject: Re: option quotes?
hi: try www.cboe.com and go to 'market quotes' from their main page. it
is everything you need to get delayed option quotes, all on one table
and no cryptic symbols to remember.
bip
------------------------------
Date: Sun, 22 Mar 1998 08:52:48 -0500 (EST)
From: Jason Kaufman <JHK@copper-mt.com>
Subject: Rules for 401(k) transfer due to merger
Jerry writes:
We have been told that our balances now with Digital's 401(k) plan
MUST be rolled over into Intel's 401(k). The Intel HR folks cite
some rule about "same job, same desk" employment changes; that is,
if you change employer only because of a corporate take-over or
corporate spin-off, and your job stays the same, you have no choice
but to roll your 401(k) balance into the new employer's plan
(if he has one).
Has anyone heard of such a rule? Am I indeed required to roll
my 401(k) balance (with my old employer) into the new employer's
401(k)? If so, what's the reasoning for such a rule?
Frankly, I am not impressed by the choice of mutual funds in the
Intel 401(k) plan. And besides, I'd rather roll my 401(k) balance
out into an IRA and enjoy the greater flexibility.
Yes, Jerry, sad but true...however, Section 401(a), subsection
12 states that a participant must receive a benefit immediately after a
merger of a plan that is at least equal to or greater than the benefit
he would have received BEFORE the merger. So, maybe this helps, maybe
you will have to live with it, or change companies. Good luck!
Jason H. Kaufman
Copper Mountain Trust Corporation
Portland, Oregon 97204-3713
Corporate Web site: http://www.copper-mt.com
------------------------------
Date: Sun, 22 Mar 1998 08:53:18 -0500 (EST)
From: "Howard D. Lebowitz" <HDLebowitz@worldnet.att.net>
Subject: Bridge Loan: Is it a good idea?
I would like to get some opinions on the use of bridge loans. We found a
house we really like and are able to make the down payment from our own
cash. We still need to sell out current home, however.
Q: Is it better to just qualify for a regular loan on the new house and
hope the old one is sold before we close on the one or use a bridge loan
that pays off our current note and gives us an interest only load for say
up to a year?
Howard D. Lebowitz
HDLebowitz@worldnet.att.net
------------------------------
Date: Sun, 22 Mar 1998 08:55:26 -0500 (EST)
From: Roberta Kleinman <kleinman@cme.com>
Subject: Re: NY State Income Taxes On Income Earned In Florida
Bob Hartwig <rph1@mindspring.com> wrote:
>I moved from Florida to New York State in late 1997. Most of my 1997
>income was earned in FL. NY apparently requires that the "state
>wages" match the federal wages. Does this mean that all the income I
>earned in another state during 1997 is subject to NY state taxes?
>This seems to be absolutley outrageous to me.
I have moved into and out of New York State several times in my lifetime,
so I speak from personal experience. You do not owe N.Y.S. taxes on
income earned while you lived and worked in the State of Florida. As a
part-year resident of New York for 1997, you must use a different N.Y.S.
tax form to report your income than a full year resident would use. I
don't have my old tax files handy, and I don't remember the numbered part
of the form number you need to use (might be IT214), but the form number
also contains the letters "NR", where "NR" stands for "non-resident".
This form is for both non-residents and part-year residents. Call the
800 number in Albany and have them send you this form, which has two
columns. The first column should mirror the income and other entries you
have made on your federal 1040. The second column is intended to be a
sub-set of the numbers in the first column, and represents that portion
of your income and other entries that is attributable to!
the portion of the 1997 tax year you resided in New York State. E-mail
me if you need more information. Good luck!
------------------------------
Date: Sun, 22 Mar 1998 08:55:52 -0500 (EST)
From: Jerry Conley <jcrev@ncn.net>
Subject: Long Vs Short term sales of Mutual Funds
During 1997 I exchanged some of my holdings in Mutual Fund for the same
fund in an IRA account. At the time I didn't think about the exchange being
a taxable event. It's the first time I have ever sold shares in a mutual
fund. Now the tax man cometh and I'm not certain about the best way to
handle the sale. The mutual fund company reported the sale as using an
averaged purchase price to determine the taxable gain. With the new tax
laws that favor long-term capital gains it would seem best to me if I
identified the shares sold in making the declaration as long or short term.
I know that in some cases it would mean a greater amount of capital gains,
but if it means a lower tax rate it could be to my advantage. I'm also
concerned about establishing a method and having to stick with that method
for future trades. Do I have an option as to the method used with a mutual
fund? Are mutual fund capital gains afforded the same long or short term
options that stocks have? When an average price is used does it
automatically push the transaction into short-term?
I would appreciate whatever words of wisdom are available.
Jerry
------------------------------
Date: Sun, 22 Mar 1998 08:58:19 -0500 (EST)
From: Terry King <palace@asde.com>
Subject: Roth IRA for 81 year old Father In Law?
My father-in-law recently became a widower. There is some IRA
money in Mum's name which will need to be dealt with. What are some of
the issues that we need to approach carefully. Can this money be
converted to a Roth account? Also, he is retired, but works part-time.
Am I correct in believing that contributions to a Roth IRA can be made at
any age?(He is 81)
A second question, partially related to the first and partially
related to another family member, . . . If an IRA is rolled over to a
Roth IRA, is the tax computed by adding the taxable portion to the 1998
income, and than the taxpayer is allowed 4 years to pay for this
increase? Or, is 25% of the taxable portion of the rollover added to the
income for each of the years 1998-2002? This could make a substantial
difference in the amount of taxes owed, and perhaps the financial aid
formulas used for college funding.
Terry
------------------------------
Date: Sun, 22 Mar 1998 08:59:31 -0500 (EST)
From: Prabhat Mishra <Prabhat.Mishra@eng.sun.com>
Subject: Updating portfolio in Quicken 4.0?
Fellow Persfiners,
I have been worndering about how to update my portfolio without having to
key in all the numbers manually. This operation was easy with the free one
year subscription that came with Quicken but it has run out now and I dont
want to subscribe to it since this info has got to be available on the
web. Any pointers?
Thanks.
prabhat
------------------------------
Date: Sun, 22 Mar 1998 09:00:37 -0500 (EST)
From: sreeni@isi.com (Sreeni Tellakula)
Subject: portfolio allocation?
Couple of digests ago, some one asked about portfolio allocation.
First one needs to do assett allocation among - stocks, bonds, cash.
If you have a portfolio with morningstar (www.morningstar.net), it's
X-Ray view will give you the assett allocation for the portfolio.
Then dividing the stocks: There are multiple categories here
Value stocks
Growth stocks
International stocks
Real Estate stocks
Utiltites stocks.
There is a site - www.fundstyle.com, which gives the break-up for
each mututal fund in terms of large value, large growth, medium...
etc.
One sample example could be:
5% cash
20% bonds
75% stocks
75% stocks is divided:
10% international stocks
10% real estate stocks etc.
55% US Domestic Stocks (further divided)
25% Largecap Stocks (growth and value)
20% Midcap
10% Smallcap
These percentages vary depending on the individual. For example, for
last year or so, smallcap value stocks have been beating the smallcap
growth stocks by heavy margin.
Hope this helps.
- --
Sreeni Tellakula
sreeni@isi.com
------------------------------
Date: Sun, 22 Mar 1998 09:01:27 -0500 (EST)
From: Nikhil Subhash Sarpotdar <nikhil@mozart.ee.umn.edu>
Subject: House buying tax implications.........
HI!!
Hope everybody is doing great !!
I needed quick tax advice regarding home purchasing.
I am planning to buy a condo in the Bay area sometime pretty soon. It is
going to be a 2 bedroom X 2 bath unit. Since I am not currently married I
was planning to rent one of the bedrooms to one of my friends.
What are the tax consequences of renting a part of the Apt. Do I
*HAVE* to go ahead and consider it as a commercial property in the % of
rent paid and depreciate the same % of property. Can't I just add the
rent to my income as other income and report it to the IRS keeping the
condo as a private residence (treating my friend like a paying guest). I
have been getting conflicting reports from my friends.
The reason that I do not want to commercialise the property is
because then (if I am not wrong) I would have to pay tax on the same % of
the capital gain as the % that the property is commercial.
If you guys could point me to the relevant document numbers that would be
great !!
Thanks, Very Sincerely
Nikhil
------------------------------
Date: Sun, 22 Mar 1998 09:04:28 -0500 (EST)
From: dmak@tma-net.org
Subject: IRA "Recaluation"?
When an IRA holder must begin taking minimum required distributions,
they must make a choice whether or not they want the distribution
amount to be recalculated each year. I am trying to understand the
pros and cons of each choice, since once the choice is made, it is
irrevocable.
I know that one benefit of recalculation is that it guarantees that
you won't outlive your IRA balance and therefore minimizes the yearly
distributions. What are the other apparent and not so apparent
pros/cons to the 2 choices? Thanks!
------------------------------
Date: Sun, 22 Mar 1998 09:07:14 -0500 (EST)
From: rfrego@mail.tel-net.com
Subject: Re: SFNB Bank Problem
To the many investors who have emailed Mr. Hartz at SFNB I want to thank
you personally. Because of the numerous amount of emails that Mr.Hartz has
received over the last few weeks or so after I reported the incident to all
you fine members, Mr.Hartz feels that I should post you another email
regarding the situation.
As, I mentioned previously it was only after I
posted the message on Investors list and Personal Finance List that SFNB
came to their senses and agreed to pay me $100 interest, a written apology,
and several other gifts, along with my $750.OO that was held hostage for
approximately 8 months. The check from the treasury department was stamped
on the reverse side in capital letters, SECURITY FIRST NETWORK BANK,
ATLANTA , GA.
In several emails SFNB denied receiving this check. I have
still not received all the answers I wanted, ie; the name of the account
holder it was deposited in, and who exactly was responsible. I find it hard
to believe that an incident like this just " happens " and that
representatives feel that after they pay what is rightfully mine, that I
should just forget it, and pretend everything is hunky dorry. After all,
why should I take their word when they did not accept mine, even after a
senior finance representee told me that the check was received by SFNB. I
am glad that Mr. Hartz did help resolve this issue, but it does not change
the fact that they had my money for approximately 8 months, and put me on a
goose chase that led right back to their bank with big bold letters from a
check printed off the Treasury Department's microfiche machine.
Anyway, The interest and Principle has now been paid, and your letters have
surely helped a lot, and hopefully SFNB will realize that they cannot treat
customers as poorly as they did me. I often wondered how a young soldier or
lower income civilian would have went through if they were depending on
that $750.00 to buy their children food, medicine or shelter. Only to have
spent numerous hours over the course of 8 months playing ping-pong with
SFNB Reps who obviously did not do a full search as would seem appropriate
in the customer service business. It appears that they have to assume that
everyone is a crook and out to get money that is not rightfully theirs.
Anyway, I thought this issue was closed and have not commented on it since
being paid the interest, but Mr. Hartz keeps forwarding your replies to my
mailbox, wanting me to explain to each one of you that SFNB finally paid
the interest and my principle after holding my money in someone elses
account for many months. I told him in email not to forward all those
messages to me anymore, and he wrote back Subject: unacceptable.
In closing, again I want to thank everyone who has helped resolve this
problem. I will also encourage Mr. Hartz to listen to your concerns, and
respond to your emails individually since many of you also are SFNB
customers, and have a right to be heard.
I continue to maintain an account at SFNB, and my wife has a direct deposit
going to her SFNB account. I am very hopeful that this incident will not be
repeated, as Mr. Hartz has stated that corrective measures are now in place
to prevent this from happening again. If it happens again, I will close my
accounts in a heart beat.
Mr. Hartz, please let me know if there is anything I have left out. Your
support is greatly appreciated.
What I learned through all this is that it is a waste of time to deal with
customer representatives who do not put the customers interest above the
company. It is best to deal with the President, the Better Business Bureau
and the hundreds of people on the investment lists/ Internet. Only then do
people get out of their chairs and really dig for the truth.
My last comment is that I would like to thank the Better Business Bureau,
P.O. Box 2707, Atlanta, GA 30301, specifically a Mrs. Suellen Knight for
all her efforts in helping me receive my money back. Their new online
service is quick and very efficient. It is nice to have an agency available
that actually works for consumers.
Thanks again,
Rodger
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End of persfin-digest V4 #136
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