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Jewish World Review April 5, 2000 / 29 Adar II, 5760

Bruce Williams

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Beating the look-back period


http://www.jewishworldreview.com -- 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 resort.



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).

Up

04/04/00: Providing for retirement
04/03/00: Readers disagree on time shares
03/30/00: The road back to good credit
03/29/00: Pre-tax dollars in IRA taxed later
03/27/00: Gambling on business ventures
03/22/00: Old cars as hobby, not investment
03/20/00: Tax on foreign gifts?
03/16/00: How to buy government bonds
03/13/00: Buying treasury instruments
03/09/00: Subcontractors must pay S.S.
03/08/00: Real-estate lawyers are essential
03/07/00: Don't expect compensation for ideas
03/06/00: Too rich for a Roth IRA?
03/01/00: Is time-sharing a scam?
02/29/00: Paying for nursing-home care
02/28/00: Rely on a real-estate lawyer
02/23/00: Keeping child's money safe from divorce
02/16/00: Just how important is a 401(k)?
02/14/00: Shaky partnership buying house
02/11/00: Protection by residential zoning
02/09/00: Benefiting from a reverse mortgage
02/07/00: Ensure your insurability
02/04/00: Absurd community zoning laws
02/02/00: Money or securities?
02/01/00: Can we KO a custodian?
01/31/00: Why sell a home you love?
01/26/00: Everyone needs a will
01/25/00: Will splitting stocks affect rollover?
01/24/00: Should early retirees contribute to SEP?
01/21/00: Strategies for paying off debt
01/20/00: Is 15-percent growth achievable?
01/19/00: Selling a second home
01/18/00: Running from a time-share
01/14/00: Don't be a spendthrift!
01/13/00: Who gets the house?
01/11/00: It all depends on size of estate
01/06/00: Check references before hiring an advisor
01/04/00: Savings bonds a bad investment
12/31/99: Out of state ain't that great
12/29/99: Warranty rip-offs
12/27/99: Checking up on investment handlers
12/23/99: Options good only when company's strong
12/20/99: Capital gains tax sometimes best
12/17/99: Don't give up your nest egg
12/15/99: Small-claims court no panacea
12/13/99: Termite company not liable for termites?
12/10/99: Services provided must be paid for
12/06/99: How do we minimize house-sale gain?
12/06/99: Maximize your tax shelter!
12/02/99: My neighbor won't maintain even a modicum of civility
12/01/99: Long-distance rentals a bad idea
11/29/99: Mortgage strategy A-OK
11/18/99: Students can work and learn
11/16/99: Value is what will sell
11/11/99: Y2K: No big deal for real estate
11/08/99: Real life is tough luck
11/03/99: The right time to cash a savings bond
11/01/99: Slow road for savings accounts
10/29/99: What do you want from insurance?
10/27/99: You have a right to see your tax forms!
10/25/99: Why own a house at 65?
10/22/99: Online fine, but CDs?
10/20/99: Love, honor -- and separate credit
10/18/99: Find the value of your stocks
10/15/99: Property lien prevents trade
10/13/99: Clear up debt, only then tie the knot
10/11/99: If it ain't broke...
10/04/99: Should I stick with the company IRA?
10/04/99: Get a financial education!
10/01/99: Insurance: Not much one person can do
09/30/99: Lost tickets are lost cash
09/29/99: Trusting only one financial planner
09/27/99: Adult children should help out
09/24/99: Tips for first-time home buyers
09/21/99: Use the rule of 72s!
09/17/99: Legal strategy can be a pain
09/15/99: Teen drivers drive up insurance
09/13/99: Always use an attorney!
09/10/99: Whose taxes are they, anyway?
09/08/99: How do I roll over my 401(k)?
09/03/99: How can I work out my IRS payments?
09/01/99: When your company can't pay you
08/30/99: Beware of shady viatical investments
08/26/99: Landlords vary on security deposits
08/25/99: Educational IRAs must be spent on education
08/23/99: Finding out the value of old stocks
08/20/99: How to get an FHA refund
08/19/99: 100 percent financing is a scam
08/16/99: Will I have to pay a capital gains tax?
08/16/99: Thinking about PMI
08/13/99: Short-term mutual funds a-OK
08/11/99: It's your job to shop around
08/10/99: Sometimes, roots need to be uprooted
08/09/99: 'Pre-approved' doesn't mean a thing
08/06/99: Only you can determine your investments
08/04/99: Bank IRA the lowest-risk option
08/03/99: Reverse mortgages good for the elderly
08/02/99: Get the survey BEFORE you buy the house!
07/28/99: Get a lawyer -- it's worth it!
07/27/99: If it ain't broke...

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