Jewish World Review April 5, 2000 / 29 Adar II, 5760
Beating the look-back period
DEAR BRUCE: I am 53, and my mother is 75 and lives in Arizona. She has about $115,000 in stocks that earns about $2,000 a year, which she declares on her taxes. She wants to give me the stock that is in her name and mine with the right of survivorship. She has ample other funds and is in average health. I am concerned about her going into a nursing home in the next three years. -- H.I. Frankford Square, Pa.
DEAR H.I.: Once again, the look-back period has to be considered. The money can be given to you without any taxable event if your mom claims against her lifetime exemption, which allows her, at this writing, $650,000 exempt.
If she stays healthy past the look-back period, the money is yours free and clear. Should she require government assistance in that period, they may make a claim against it.
You mentioned that she has other assets, which would probably get her through the first year or two.
DEAR BRUCE: I have read your column for many years. Contrary to the rest of the world, I lost money in the market in the last three years. One of the companies filed Chapter 11, which didn't help my portfolio. I now believe that I should take my money out and invest in a mutual fund. What do you think? -- D.G., Westchester, Pa.
DEAR D.G.: I would need to know a little more about your investments before I could comment. However, not everyone in the stock market makes money in the best of times. All it takes is one "big turkey" to offset any gains you may have made elsewhere.
Whether or not you have invested wisely is another story.
In the event that you wish to bail out of what you are currently holding, investing in a well-performing mutual fund is not necessarily a bad idea. You have to make a determination from time to time as to what your investments are doing and if the income can be improved.
I suspect what happened here is that you made your choices and when they started to sour, you stayed with them. Some people say that's the way to go; others say, cut your losses. I think for your own piece of mind, cutting your losses might be the way to go.
DEAR BRUCE: After just being laid off from a major corporation, I am not going to be able to find suitable employment except at minimum wage.
I have almost $60,000 in an IRA, and I would like to take out the money to live on. Do you think this is a smart thing to do, or should I wait until I'm 59-1/2? -- G.L. (e-mail)
DEAR G.L.: If at all possible, wait until you are 59-1/2. While I understand that things are going to be tough for you right now, this is money that you sweated for, and tapping into it should be a last
Send your questions to JWR contributor Bruce Williams by clicking here. (Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.) Interested in buying or selling a house? Let Bruce Williams' "House Smart" be your guide. (Sales of the book help fund JWR).
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