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BETTER INVESTING
717 W Thirteen Mile Rd., Madison Heights, MI 48071.
Monthly, 1 year, $24. www.better-investing.org.
Review capital gains and losses
Certified financial planners, Alexandra Armstrong and Karen Preysnar, offered 10 guidelines for reducing your tax bill in the December issue of Better Investing. One of the suggestions was to review capital gains and losses and consider security sales to balance these amounts.
"As in the past, for a transaction to qualify as a long-term one, you must hold a security for more than a year. The new tax law taxes these long-term gains at a maximum rate of 15 percent effective for sales on or after May 6 of this year. Long-term sales prior to that date are taxed at a maximum rate of 20 percent. As in the past, assets that are sold and have been held less than a year will be taxed at ordinary income tax rates.
First of all, look at your 2002 tax return. If you had excess capital losses that you carried forward to this year, see whether you've taken profits this year that can be balanced by your carry-forward loss. (Isn't it nice to actually see some profits for a change?) Next, see whether you have gains in your portfolio you want to take to offset this loss. Keep in mind that if you still have excess losses at the end of this year, you can only deduct these excess losses at the rate of $3,000 per year. (If you like the stock and think it will continue to do well, you can always buy it back immediately, thus establishing a new cost basis.)
If you sold securities this year and have capital gains in your portfolio, review your positions for losses that you could take. However, remember that unlike when you sell for a gain, when you sell for a loss you cannot buy back shares within 30 days before or 30 days after the date of sale or your loss will be disallowed. Remember that a trade executed on Dec. 31 will count as a 2003 transaction even though it will not settle until January 2004.
We do not anticipate substantial capital gain distributions from the mutual fund companies this year because they probably have accrued capital losses from prior years that they can apply to any gains they take this year. If your mutual fund company has not provided you with capital gain estimates, check with your financial adviser or mutual fund company for this information."
THE LYKE REPORT
P.O. Box 290, Glenview, IL 60025.
Monthly, 1 year, $89.
Do not call list: When a stranger calls
John Lyke: "Government regulators at the Federal Trade Commission and the Federal Communications Commission, hampered by court decisions from enforcing a national do-not-call registry, released information on what you can do if called by telemarketers: Tell the caller to put your phone number on each company's do-not-call list and keep a record of the name of the company and the date of the call. Tell the caller you are on the national do-not-call registry and ask the telemarketer if he has that list. Make a note for your records in case you decide to file a complaint. File a complaint with the FCC by e-mail (donotcall@fcc.gov), telephone (888-CALL-FCC) or mail. The complaint should include your name, address and daytime telephone number, the telephone number involved in the complaint, and as much specific information as possible."
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