Augusta focus. ([Augusta, Ga.) 198?-current, April 27, 1995, Image 11

Augusta focus., April 27, 1995, Page 11, Image 11

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Newspaper Page TextSaving money in your child’s name F Charles Ross 'Y.OUR PERSONAL FINANCE ¢ The advantages i Making a financial gift to your hild is easy, whether you're deal ing with a bank, broker or mutual fund. You fill out a form naming the child as beneficiary and an g:igultuc\modian. Consider nam an adult other than yourself as custodian, a precaution in the event of your death. . ¢ Youcan make annual gifts of up t 0 SIO,OOO each without having to y any gift tax. If both spouses ﬁn in, you can giveaway $20,000. : Congress has severely limited thetaxbreak for savingin achild’s name rather than your own. The first S6OO earned is tax-free. The next S6OO is taxed at the child’s rate, presumably 15 percent. In vestment income above $1,200 is taxed at the parents’ top rate. The disadvantages If you are considering making a gift of money to your children, remember the money you give is actually owned by them. Youcan’t take the money back if you hit a financial snag. Once your child reaches the age stipulated in your. state’s law, usually 18 or 21, the custodial relationship ends and the child can spend the money as desired. This can mean college money may never make it to the school account. You cannot hide the gift since the child will see it when he or she is old enough to sign a tax return. The gift and college finan cial aid It’s possible that saving for col lege in your child’s name could Get facts about home improvements Rising interest rates are caus ing many people to remodel their homes rather than purchase new ones. But before you make any home improvements, do your homework. The Georgia Society of CPAs points out that some improvements enable you to in crease the resale value of your home, as well as save you tax dollars. Paybacks for improvements Kitchen fix-ups, the most com mon remodeling project among homeowners, typically yield the highest return when a home is resold. Adding a family room, a master bedroom suite, or a bath room also has a high resale val ue. Another renovation that in creases marketability in today’s market is a sun room. When makingrenovations, keep energy efficiency in mind. For ex example, replacing your furnace oradding new double-paned win dows may help you reduce heat ing bills. What’s more, to help make such improvements, utili ty companies may offer you a low-interest loan or a cash re bate. The tax benefits When you sell your home, you generally have to pay a tax on any profit — that is, the differ ence between your home’s net selling price (selling price less broker and legal fees, etc.) and its adjusted basis. To determine your home’s adjusted basis, add the cost of any home improve ments to the amount you origi nally paid for the home. Adding the cost of improvements to your home’s basis means that every dollar you spend toimprove your home could shave a dollar off your future taxable gain. That’s because the greater your basis, the lower your profit — and the less taxes you pay. What qualifies asanimprove ment? For tax purposes, the IRS dis tinguishes between improve ments and repairs. Expenditures qualify as improvements only if they add to the value of your home, considerably prolong its life, or adapt it to a new use. Examples ofimprovementsin clude converting an attic into living space, installing central air conditioning, adding another bathroom or bedroom, putting in new plumbing or wiring, or pav ing a driveway. Storm windows, lighting fixtures, skylights, new trees or shrubs, termite proof ing, and waterproofing alsoqual ify as improvements. One test to determine if a renovation quali fies as animprovement is wheth er it is permanent. For example, ‘. "'\‘ . o \ ‘ «,ﬁ,ﬂf \ ” Ay 4 i - 4 * A () ‘yf { ) ‘ 4 L /[."‘ L) o 7 4 y e e s{' .c" ' ‘1« !{ 4 ' 'i‘,‘. 1' ¥SO ”~ 5 A v 4 P ‘ 'x{ : ¢ "p“ / 'v, . 3 | <Ji 144 A v ; v t v & ALI g ’ Jll' g bt Al o f"h S ht L% TR J Pag v N h ‘ W Saipn ; ¢ e NG . Ao i 'IA‘ i‘,lﬁ LA A oy . S Fow e o Y 0 ! % v g ; a |A P ." gt ’5 9 2" ww % ““ 7 A - ” " d ol 48 RN i e - ﬁP e T P \"I‘! A ?”"*v A‘- sty (i a 0 ¢ N g R beot ot eT R A% ip TVRR e N oF p‘;,,,ffx, s ff o Forag s VAR e 8 43 ] A * 2 ? AAN PAR \ e A f‘ [l . L e -'r:-?‘x RO TR o PR A W PR a 1 R Y »:'bt ; 5 X t,"\n"‘ ; %:g;’ ," P”'"j:?}':; o ; &!:“ ; ) P B % 4 Ale . A o AT A %R AR |‘% }!,s‘ .n}.':ﬂ %y A w','v P 2 Rre ot W ':Q‘P)‘ kI f e L™ “%, ,{ y 4/ . . ; b e A Y 4 0 Y ik P . par 20 BB i o o g 7 : g Si,{ ' 14 y ,\"J“A;jﬂ BT é ? $1 } g ] § ! ¥ g 4 1 y v leave you with a higher tab to pay by pushing financial aid out of your family’s reach. To determine who qualifies for aid, colleges be ginby estimating how much of the bill the student and the family should be able to pay. Thedifference betweenthe fam ily contribution and the cost of the education is the need that can be filled by grants and loans. The you can add to your basis the cost of built-in bookcases or wall-to wall carpeting, while the cost of a free-standing bookcase or a room-size rug doesn’t qualify. What about repairs? According to the IRS, repairs differ from improvements in that repairs merely maintain your property in, or restore your prop erty to, good working condition. For example, fixing a leaky roof'is considered a repair. However, in stalling a new roof is considered an improvement. Thus, basic re pairs and maintenance, such as the cost of painting or repairing gutters, generally offer notax ben Susan Is Reclaiming Her Life One Meal At A Time. T i ._",‘-'12;:»,/‘/1.", G o it oA % o U i g Gl i e i e . T e a 0 A 2 Y Y % % P . 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M . 7 74 7 G ‘ 5 7 7 i 5557 Z ) 7 S Z 7 707 ©1993, SHPR Livingßetter ilustration: derick wells lower your income, the more like ly you are to qualify for financial aid, especially grants, and the more attractive it is to hold what savings you have in your own name. The standard government for mula requires that 35 percent ofa student’s assets be used for col lege education, but only about 6 percent ofa parent’s assets. Sothe efit since they cannot be added to the basis of your home. Financinghomeimprovements How you pay for homeimprove ments also can impact your tax bill. Your best strategy (depend ing on available interest rates)is to avoid paying interest charges by using as much cash as you can afford to finance the improve ment. If that’s not possible, you may want to look into a home equity loan. The interest paid on home equity loans or home equi ty lines of credit is usually less than the rate charged for other forms of borrowing. In addition, these types of loans offer a tax more money you have in yourown | name, the less the family will have to provide for financing college. Avoid traps when investing Investors should be aware of a number of investment traps. That'’s the message from expert investment researchers and mon ey managers. They say that the number of traps is growing and that several popular investment strategies need to be re-examined. Consumers are cautioned about investing too heavily in emerg ing-market mutual funds. These markets include Brazil, Malaysia and the Philippines. Many emerg ing markets have been over bought, yielding a huge inflow of money. Investing in over-hyped indus triesis anothertrap. Forexample, telecommunications companies may take years to generate the earnings to prove they are worth their high prices. Cyclical,Japanese, and con sumer-brand stocks Investors are also cautioned against keeping too much money in cyclical stocks. These are com panies in the chemical, paper and ‘ metal industries whose fortunes rise and fall with the economy. Too many investors are paying inflated prices for cyclical stocks that are unlikely to produce earn ings to justify those prices in the near future. These earnings may not materialize. ‘ And finally, investors should buy consumer-brand stocks like Coca-Cola and Proctor & Gamble. Consumer brands are cashing in ‘ as a result from high demand out- | side of the U.S. : break because the interest usu ally is deductible. (Some restric tions apply to certain high-in come individuals.) Keeping track of improvements When you file your tax return for the year in which you sold your home, you’ll need to com plete Form 2119, Sale of Your Home, on which you calculate the profit on the sale of your home. CPAsrecommend that you prepare a worksheet and keep a running record of all home im provements, along with bills, con tracts, receipts, and other sub stantiating records, from theday you become a homeowner. AUGUSTA FOCUS April 27, 1995 ASHA study: most college women sexually active but don’t use STD protection A new study of women college students, conducted by the Amer ican Social Health Association (ASHA), indicates that 85 per cent of women students are sex ually active but almost half of all the women surveyed use no pro tection against STDs. The study involved 1,000 respondents at two mid-Atlantic universities, in conjunction with National Sexu ally Transmitted Disease Aware ness Month in April. Of the 12 million new STD in fections in the U.S. each year, two-thirds are in people under 25 and one-fourth are in teenag ers. According to ASHA president Peggy Clarke, among the most ‘startling survey findings are the number of women who have nev erhad a pelvicexam, the number who have been forced to have sex and the number who have had oral sex. “It is startling and tragic that one-fourth of the women in this group — typically more educat ed and affluent than other wom en their age — have been sub jected to forced sex,” Clarke said. “Among the implications of this finding is its impact on STD transmission, since forced sex is unlikely to involve STD protec tion.” ASHA designed the survey to learn more about STD-related behaviors among young adults, a high-risk age group for STDs. The survey targeted college stu dents because they provide an accessible sample. “Our survey focused on women because they bear a dispropor tionate burden from STDs,” Clarke said. “Women — espe cially young women — are more susceptible toinfection, lesslikely toexperience STD symptoms and more difficult to diagnose. And in women, STDs can lead to se vere consequences including in fertility and ectopic or tubal preg nancy.” Dr. Linda Alexander, ASHA director of women’s health, who coordinated the study, cites alco hol as a “critical factor in risky sexual practices ...” Almost half of the survey population drink alcohol at least once a week, typ- Susan is a wife, mother of two and a volunteer literacy teacher. She's also one of the 58,000 American women between 30 and 60 who will suffer a stroke this year. }gt Lii & g In a matter of seconds, Susan lost | . . SESEEEI A many of the abilities most of us ~ Me™ 48 M_— 1 ) take for granted. Now, with the : 3 k.. - help of a highly specialized team of 9" wiluee— /" ¥ doctors, nurses and therapists, this % SNI ~! L ordinary woman is meeting the g 7 1™ e extraordinary challenges of sl o i , relearning the skills she needs to ‘ 4 care for herself and her family. P And she's making progress - one meal at a time. For more information on stroke rehabilitation, contact Walton Rehabilitation Hospital at (706) 724-7746 or 1-800-366-6055. WALTON "B REHABILITATION A -_HospiTAL Sponsored by St. Joseph Center for Life Inc. & University Health Services Inc. i 1355 Independence Drive ® Augusta, GA 30901-1037 706/724-7746 * 800/366-6055 Opening Doors To Greater Independence. R R AR According to ASHA president Peggy Clarke, among the most startling survey findings are the number of women who have never had a pelvic exam, the number who have been forced to have sex and the num ber who have had oral sex. ically having three to four drinks per occasion. About one-fourth have more than five drinks per occasion. More than half report ed that they usually or always get drunk as a result of drinking. According to Dr. Alexander, al cohol “lowers inhibitions and makes people less likely to use protection.” Communication is another important dimension of sexual health, she said. Before having sex with a steady partner for the first time, more than half of the survey respondents asked their partners how many prior sex partners they had had, if they had ever had unprotected sex, been tested for HIV, or had any STDs. Less than half asked steady partners if they had had STD checkups or had had same-sex partners. Less than one-fourth of the sample asked steady partners whether they had tried intrave nous drugs, had had a blood transfusion, or had ever ex changed sex or money for drugs. Only three-fourths were “very honest” with their steady part ner about their prior and current sexual activity. Founded in 1914, ASHA is a national nonprofit organization dedicated to stopping STDs. To order ASHA'’s free guide for wom en “My Health Matters: How to Talk to Your Doctor About Sexu al Health,” call (800) 972-8500. For free, confidential informa tion about STDs, call the Nation al STD Hotline, operated by ASHA, at (800) 227-8922. 11