Broker Check

November 25, 2002

Contingency Plans Worked       

          While emergency crews mobilized within minutes of the attacks on the World Trade Center and the Pentagon, technology vendors charged with keeping their customers businesses up and running were enacting their own contingency plans.
         At a command center that storage specialist EMC Corp. established in Hokington, MA, teams drawn from engineering, customer service and logistics staff and initially set up for a Y2K emergency, worked to solve the most pressing needs of the vendor’s 25 World Trade Center customers and the additional dozen or so in the immediate vicinity.  Within hours of the tragedies more than 1,000 EMC drivers were being trucked to New York.  At the same time, the company used its remote support technology to shut down hardware at locations where the temperature exceeded 140 degrees.
         Sun Microsystems had about 70 customers in the World Trade Center and about 500 more in the immediate area.  They faced an additional challenge because the office it used to serve these clients was in the Trade Center.  The message from Sun executives was to do whatever was necessary to help.  Within hours, Sun was plucking equipment from its manufacturing line and sending it to affected customers.
         American technology businesses stepped up to the plate and we all have a right to feel patriotic and proud. 12/3/01 p. 48

National Financial Raises Retirement Account Fees

          Effective January 1, 2003 fees will increase for all Traditional, Roth, Rollover, Beneficiary Distribution Account, SEP and SIMPLE IRA’s and Money Purchase/Profit Sharing Plan Accounts which are maintained at National Financial Services.  The annual retirement maintenance fee will increase from $30 to $35 .
         New accounts with balances over $25,000 will no longer have their first year annual maintenance fee waived.
          The termination fee will increase from $50 to $75.
          The fees will not impact the current 2002 fee billing cycle.
          The fees are not applicable for retirement accounts maintained with us that are direct at fund.
         If you have any questions, please call Nadine. Securities Service Network Newsletter-November 2002

Almost Worthless Securities   

          Stocks that no longer have value can be a source of irritation and a tax savings waiting to be had.
         The problem often arises that there is no market that exists for the security which may not actually be worthless.  Lisch Investment Services can now offer a courtesy solution for our clients.  If no market exists for the security, our broker dealer will buy the entire position from you for a $1 fee plus a commission.
         If you think we can be of service, please call us.

New Jersey Tax News          

          In regard to 401(k) “catch-up” contributions, any “catch-up” contributions are exempt from New Jersey income tax in the same amount as for Federal purposes. N.J.S.A. 54A:6-21
         However, in regard to 403(b), SEP, SIMPLE and 457 plans, the “catch-up” contributions are taxable because the New Jersey Gross Income Tax Act taxes contributions to these plans.
         New Jersey filing requirements for a limited liability company (LLC) electing “disregarded entity status” depend on Federal tax treatment.  The organization is treated the same for State purposes as it is for Federal purposes. N.J.S.A. 42:28:-69(b)  If the single member of the LLC is considered a corporation for Federal purposes, the member corporation will be subject to New Jersey Corporation business tax.  If the member is not recognized as a corporation for Federal purposes, income from the LLC will be reported as gross income on Form NJ-1040.  New Jersey State Tax News Vol. 31 Numbers 2/3

No Need to File a Schedule B                   

          if you have less than $1,500 each of dividends and interest.  Prior floor was $400, which had been in place since 1974.  You still have to pay tax on the interest and dividends, you merely do not need to file the form.
         We, however, will continue to file the form using it as a method to track your dividends and interest from year to year.
         The easing does not affect filers with foreign bank accounts; they must file Schedule B no matter how much interest and dividends they have. The Kiplinger Tax Letter 9/27/02

Special Tax Break         

          is available for buyers of the Toyota Prius.  The IRS says the car is a hybrid, uses a gasoline engine as well as an electric motor.  Purchasers can deduct up to $2,000 of the cost of the vehicle on their returns as an above-the-line deduction in the year purchased.  Prius buyers who have not claimed the write off can file amended tax returns.
          Soon, to the Honda Insight and a special Civic will qualify. IRS News Release 2002-97

Health Club Membership May be Deductible         

          as a medical expense.  In a recent private letter ruling, the IRS indicated the cost incurred to join a health club can be treated as a medical expense if done primarily to alleviate obesity.  But agency officials are expressing dismay about this ruling.  They say that health club fees are never medical even if ordered by a physician.  We expect the ruling will be reversed by the Service. The Kiplinger Tax Letter 8/16/02

Swimming Pool Maintenance May Be Deductible         

          A disabled homeowner and his handicapped son used a swimming pool daily at home for therapy.  The treatment was recommended by their physician.  The pool had no diving board and other family members did not swim there much.  The Tax Court said the pool was used mainly for medical care.  It allowed the taxpayer to deduct the cost of chemicals for the pool and equipment and electricity for its operation.  But not its cost. The Kiplinger Tax Letter 8/16/02

    If you have any questions about these or any other financial matters, please call us.

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