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Jewish World Review Dec. 31, 1999 /22 Teves, 5760

Bruce Williams

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Out of state ain't that great


http://www.jewishworldreview.com -- DEAR BRUCE: I sold some used equipment to an out-of-state company. The owner did not want to have it shipped C.O.D., and told me that when the equipment arrived, he would send the check. The amount that we agreed upon was over $6,000. It has been six months since I shipped the equipment, and I still have not been paid. I contacted a lawyer to send him a letter. Still no results. The lawyer said that it would be difficult to sue and collect because he was out-of-state. -- B.M., Traverse City, Mich.

DEAR B.M.: You have done what so many others have done before you. Shipping merchandise to people you don't know on the strength of a telephone conversation is a very foolish maneuver. I disagree with your attorney, however. If he can't handle your case, I would get an attorney in the city and county where your "customer" is domiciled. That attorney can pursue this matter and if there is a decent chance of collecting. The attorney should take the case on a contingency basis, keeping 33 to 40 percent for himself. It seems like a lot to give up, but 60 percent of something certainly is far better than 100 percent of nothing.

DEAR BRUCE: We just sold a piece of property and realized $75,000 before taxes. We wish to use the money for college expenses for our two kids, ages 12 and 8. We have invested in some education bonds as well, but this will be the majority of their college fund. How should we invest this money in the meantime to maximize its earnings? -- G.D., via e-mail

DEAR G.D.: As soon as you say "maximize earnings," you must also say "I am willing to take a risk." The degree of risk is very much a handmaiden to the degree of the return. You may be knowledgeable about specific equities. This might be your choice. Obviously there are hundreds of mutual funds that adopt an aggressive stance which might suit your needs.

Remember, if you are looking for decent returns, you need to be prepared to lose. Over the long haul, that risk is minimal, but if you are the kind of person who can't stand to see things bounce around a little bit, you will have to settle for a minimal return.

DEAR BRUCE: One of my sons has kindly offered to enlarge his home and give me a separate apartment to live in. As a consequence, I no longer need my home. Is it better to put the house in my children's names now, or should I wait to pass it to them through death? I understand a tax advantage can be gained if I do it the right way. -- J.H., Norristown, Pa.

DEAR J.H.: I'm assuming that you are speaking of your principal residence. If there will be a large amount of profit, in my view it would be far wiser for you to sell the home. Any profit up to $250,000 would be washed away under the new tax law. You could then "gift" your children and their spouses $10,000 each every year. Alternatively, if your estate is relatively modest, you could claim against your lifetime exemption. If you speak to an accountant, I think he or she will tell you that transferring the house over to the children as a property may result in a tax liability that is easily avoided.



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

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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