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February 26, 2009

Hey Wayne, I was right

You may remember, back in October, when H. Wayne Huizenga was trying to sell the Miami Dolphins, he made a crack about getting the deal done before then-candidate Barack Obama doubled the capital gains tax.

Huizenga didn't have his facts straight, I pointed out in a blog at the time. What Huizenga said didn't match what the Obama campaign was saying.

Today, in President Obama's budget, we have the facts. And there is no doubling of the capital gains tax in sight.

According to reports on Bloomberg and in Congressional Quarterly, Obama's budget proposes to raise the tax rate to 20 percent from 15 percent on capital gains and dividends, but only on the highest income families. That would be singles with $200,000 or more in income and married couples with $250,000 or more.

That's a 33 percent hike for the rich. And it is a return to what the capital gains tax rates were six years ago, under President Bush.

Huizenga was wrong, but I can understand rich folks feeling miffed at this point.

Obama would also restore higher tax rates for top income families and his budget would cut back on some of their deductions, including mortgage interest.

All in all, tax bills for those at the top of the income scale do go up under Obama's plan, if Congress approves it.
But Wayne's deal is done. He sold the Dolphins in January in a $1.1 billion transaction. My colleague Sarah Talalay tells me he completed the deal the morning of Jan. 20, the day Obama was inaugurated.

Was that just to be safe? You think?

POSTED IN: Taxes (41)

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February 25, 2009

UBS: Bailouts and tax evasion

A reader on the island of Palm Beach adds up the news:

-In October, UBS, the Swiss banking giant, asks for and gets a $60 billion bailout from the Swiss government.

-In December, UBS sponsors Art Basel show in Miami and puts on a dinner of stone crabs and super jumbo shrimp for 800 clients in a tent on the beach.

-Last week, UBS, in a deal struck in federal court in South Florida, agrees to pay $780 million in fines, penalties and interest to defer prosecution on charges of aiding its clients to evade US taxes. The Justice Department is trying to force UBS to disclose the names of 52,000 wealthy U.S. customers that it suspects may have evaded taxes.

Bailouts and lavish dinners? Art and tax evasion? Swiss banking and criminal investigations?

What do you think? What's your experience with UBS?

POSTED IN: Wall Street (26)

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February 24, 2009

Florida's Un-Sunny Outlook

Floridians’ consumer confidence fell in February, as hopes dimmed that the nation would find a quick fix for the troubled economy. Nationwide, consumer confidence is now at an all-time low.

The University of Florida says its index of Florida’s consumer confidence fell three points to 63. Survey Research Center Director Chris McCarty of the Bureau of Economic and Business Research said the indicator fell because “the novelty of
a new administration met with the sustained reality of a faltering

February's Consumer Attitude Survey index was four points above the all-time low of 59.

The index has five components and each one declined. They are: Expectations for the nation’s economy over the next five years, expectations about personal finances one year from now, current perceptions of personal finances and consumers’ view on whether now is a good time to buy big-ticket consumer goods.

Consumer confidence is considered a key economic indicator. But consumer attitudes won’t turn up until consumers see a clear signal that things are
improving, McCarty said.

"There is no doubt that we will be
working through this recession through this year and into 2010," he predicted.

POSTED IN: Economy (42)

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Coping in tough times: Save on Car Buying

Send in your questions about making it through this recession. Submit them at the right and watch for the answers on Wednesdays.

The stimulus legislation set up a sales tax deduction for car purchases. Will Floridians get to take that as well as the deduction for state sales taxes?

Congressional leaders may have thought about piggybacking one tax break on top of another. But that’s not what happened.

If you purchase a passenger car or light truck, between Feb. 17, 2009, and Jan. 1, 2010, the new law allows you to tack the amount of the sale tax you pay - within certain limits - onto your standard deduction. That’s for people who don’t take itemized deductions.

But many Floridians do take itemized deductions. One reason is that we have the choice of writing off state sales taxes as an itemized deduction. In other states, unlike Florida, where there is a state income tax, taxpayers there can take state income tax as an itemized deduction.

In the year you buy a vehicle, however, you already are eligible for an extra-large sales tax deduction. That’s because Floridians can use an IRS estimate of what taxpayers spend in sales taxes, and add on actual sales taxes paid on certain major purchases, such as a car or a boat.

You don’t get to do that and take the new deduction, says William Massey, senior tax analyst at the tax and accounting business of Thomson Reuters. You either take the sales tax as an “above the line” add-on to your standard deduction or you take it as an itemized deduction for sales taxes.

POSTED IN: Coping in Tough Times (21)

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February 23, 2009

Should You Bet on Bank Stocks?

If the government buys into Citicorp, should you?

Sounds like a solid idea.

In concept, what could feel more secure these days? The government picks the winner, backs it up with cash, and probably will be there for a long time to watch over its investment.

And it came in when the price was so low, too. Not too bad.

I don't like the idea, mind you, that we're in this terrible economic situation, where our huge financial institutions are teetering and in need of help.

I don't want to start speculating on who is next, because the list of banks in trouble is very long. Banks everywhere are weak.

The terms aren't entirely clear, as to what will eventually be there for shareholders. And of course, nobody should make a single bet. Any stock you buy should be in the context of a diversified portfolio.

But if it's time to start placing bets on who will be here ten years from now, then my list would begin with any bank the government buys into.

POSTED IN: Your Money (256)

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February 20, 2009

Madoff Trustee: No Stock was Ever Bought

Two weeks.That's how soon letters could go out to the 2,350 investors who have filed claims with the trustee who is liquidating the assets of Bernard Madoff's securities firm. Irving Picard said this morning that he has recovered about $650 million, but has found no evidence that securities were ever bought for Madoff's customers. Picard said he's plowing through 7,000 boxes of documents and trying to uncover accounts at Madoff's offices.

What investors can hope for will not be any sort of restoration of what they thought they had with Madoff. The trustee said he'll be looking to pay claims based on the amount of cash put into Madoff's firm and the amount investors took out. Their statements of what their investments were worth won't be used. One investor asked if they could get interest on what they'd put into the firm and the answer was no, because that's not allowed under the provisions of the Securities Investor Protection Act.

Maximum payout: $500,000 from the Securities Investor Protection Corp. for now. They may be more later, if the trustees uncover where Madoff put their money.

But the likely scenario is that everyone will "share the pain" of not getting all their money back.

POSTED IN: Madoff (14)

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February 17, 2009

Coping in tough times: Homebuyers tax break

The Sun Sentinel answers your questions about the downturn every Wednesday. To submit your questions, use the form at the right.

How has the first-time homebuyers tax credit changed with the economic stimulus law?

Under the old law, first-time buyers could get a tax credit up to $7,500 for a home purchased between April 9, 2008, and July 1, 2009. You’d take the credit on your 2008 return. You must pay this credit amount back over 15 years, starting two years after the purchase.

Under the stimulus law, the old law stands. But now, the credit limit is raised to $8,000 and it applies to homes purchased between Jan. 1, 2009, and Nov. 30, 2009. This would not have to be repaid unless you sell the home within three years of the purchase.

The new rules don’t apply to purchases in 2008. So last year’s buyers will have to repay
The confusing part: If you buy in the first half of 2009 but were planning to take the credit on your 2008 return under the old law, you would not get the extra $500 credit.

And although some think they should have been informed about this before they set a date to buy a house last year, the law wasn’t in place until the end of 2008. So all who bought houses April 8, 2008 or earlier are simply not eligible for this credit.

POSTED IN: Coping in Tough Times (21)

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February 13, 2009

Here's Something for Students in Stimulus Bill

College students, Congress handed you a break in the stimulus bill.

You'll now be able to buy computers and other technology with money from a Section 529 College Savings Plan.

Money in a Section 529 plan can be withdrawn tax-free when it is used for the educational purposes spelled out in the law. Previously, you could only use these funds for tuition, books, room and board and fees, but not for that laptop.

It's not a great big refund check, but it's a break you and your parents can appreciate.

POSTED IN: Your Money (256)

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Post-Madoff Rules for Investor Self-Protection

These are my Post-Madoff Rules for Investor Self Protection. Feel free to send me yours, to add to the list. And remember, I'd love to hear from people who invested with Madoff.

-Nobody’s Smarter than You.
If they’re so smart, they can explain their investment strategy.
If they can’t, they aren’t worth trusting.

-There are no secrets.
It’s a joke to think there’s some super wonderful way to invest that beats out everyone else.
In this age of information, do you think anything stays secret? Anything good?
Anything bad sure doesn’t.
If your investment manager were smoking hot, he or she would not be hiding.

-Don’t let the guy or woman who gives you advice hold your money.
Generally, if the advice comes from one place and somebody else executes the trades or has custody of the money, you have a check-and-balance system against fraud.

-Don’t let the guy or woman who gives you advice control your money.
For goodness sakes, make your own decisions.
Which means, get up to speed on personal finance.
It’s what you have to do.

-There’s no excuse for not looking over the advisor’s shoulder.
There’s no excuse, other than you being mentally incapable of figuring out what makes common sense, for you not knowing what your money’s doing and why.
The theory behind investing isn’t rocket science.
You can get it.
Don’t leave it in someone else’s hands.

POSTED IN: Madoff (14)

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February 11, 2009

Are you a Madoff victim?

There are about 2,000 people in South Florida who were victims of Bernie Madoff. Are you one of them?

Tell me your story. I want to hear how people found him and what Madoff told his investors. I want to have a look at a statement, to see if it seems real to me. I want to find out if there's anything that can be done now. I'll bring in all the experts I can find to try to develop some sort of strategy for recovery, if there is one. Meanwhile, other reporters here are tracking the case, working on finding out how this crime unfolded.

If you have a Madoff story to tell, I'm listening.

POSTED IN: Madoff (14)

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February 10, 2009

Coping in tough times: I lost my job. What about my 401(k)?

I’ve been laid off. What should I do about my 401(k) plan?

Your retirement is the one part of your financial picture that you can put off making decisions about right away.

That’s because many employers will allow you to leave a 401(k) account at your former workplace, if it’s above a minimum amount.

Your other options include rolling the money over to your next employer’s 401(k) plan or transferring it to an Individual Retirement Account.

The IRA’s a great choice if you can find one with low fees and plenty of diversified investment options.

You’ll have to set up the new account, then return to your old employer and fill out the paperwork to release the money. This isn’t as easy as an IRA-to-IRA rollover. But a direct transfer – without the money going through your hands – is the best way to make sure your transfer doesn’t run the risk of looking like a withdrawal to the IRS. That could cost you plenty in taxes and possible penalties.

POSTED IN: Coping in Tough Times (21)

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February 5, 2009

Homebuyers, A Big Break

The Senate is handing homebuyers a $15,000 tax break.

This is way bigger than the previous version of a break for homebuyers.
By a voice vote, the Senate decided to hand anyoone, not just first-time homebuyers, a tax credit of up to $15,000 for homes purchased this year. It's still not law yet, but, Wow.

More details later.

The Stimulus bill, which is moving through the Senate, may come up for a vote later on today.

And did you hear there's another tax credit proposed for interest and sales tax on car purchases? That's not as big, but still, we need all the breaks we can get.

POSTED IN: Your Money (256)

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February 4, 2009

Coping in Tough Times: Filing a Tax Return Can Produce a Windfall For the Working Poor

The Sun Sentinel answers your questions about surviving during the recession. Please use the form at the right to submit yours.

How Do I Qualify for the Earned Income Tax Credit?

Like a lot of people, the possibility that you can get a refund for the Earned Income Tax Credit of as much as $4,824 is worth exploring.

It’s a tax credit that puts billions into the hands of those who work but earn little.

To get the Earned Income Tax Credit, you start the whole process by first having earned income, which, to my surprise, is somewhat confusing to people. This means you worked and got a paycheck, so those living off their investments or pensions or retirement benefits don’t qualilfy.

And you have to have a Social Security number. This, too, trips up some noncitizens who file their returns with a Taxpayer Identification Number. If you don’t have a valid SSN, you can’t claim this tax credit.

You don’t have to have children to get it.

But you do have to have modest income.

The limits for your adjusted gross income are:
$41,646 if you are married and filing jointly and have two or more qualifying children.
$36,995 fo marrieds filing jointly who have one qualifying child
$15,880 for marrieds filing jointly who don’t have children.

There are plenty of other requirements, but these are the basics.

POSTED IN: Coping in Tough Times (21)

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Free Tax Filing, How to Find Help

You don't have to pay someone to do your taxes. Really.

Generally, if your income is $42,000 or less, there are dozens of locations in Palm Beach and Broward where the Volunteer Income Tax Assistance program will help you with your taxes free of charge.

To find out where to go and what to bring:

In Palm Beach County, look here:

In Broward County , look here:

POSTED IN: Taxes (41)

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February 2, 2009

Tax Help

Here are answers to the most common questions I received this weekend about taxes.

The Earned Income Tax Credit applies to earned income, such as wages from your job. If you didn’t get it in a paycheck, you probably don’t qualify.

You don't have to take a minimum distribution from an Individual Retirement Account this year. new law suspended that requirement for those age 70 and a half or older, for 2009 only.

The best way to find free tax preparation help is to dial 211. In both Broward and Palm Beach counties, the folks at those call-in centers can direct you to the nearest Volunteer Income Tax Assistance sites and give you their hours of operation.

The IRS offices that are going to be open Saturday, Feb. 7 and Saturday, Feb. 21 in South Florida to help you with your taxes from 9 a.m. to 2 p.m. are:
Broward: 7850 SW Sixth Court, Plantation
Palm Beach: 1700 Palm Beach Lakes Blvd., West Palm Beach
Miami-Dade: 51 SW First Ave.

What you must bring to get free tax help:
Driver’s license or photo ID
Social Security cards
Dates of Birth
All you income statements, W2, 1099, Social Security, Unemployment, or other benefit statements
Dependent children’s Social Security numbers, name and address

Phone complications:
If you can't reach 211 -- there are some complications -- try 561-383-111 if you are dialing from a phone in Palm Beach County to find a Palm Beach site, or 561-383-1112, if your are looking for a Palm Beach site but are dialing a phone from outside the county. If you can't reach 211 in Broward or are callling from outside Broward looking for a Broward site, try 954-537-0211

POSTED IN: Taxes (41)

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About the author
You've got the job of managing your money. No one in school taught you how. But you and I, we can teach each other, how to handle it, how to save for retirement, how to make money last, how to educate the kids, how to make a budget work. The conversations I have with my readers are fun. Money's important, but discussing it does not have to be boring.

Harriet Johnson Brackey Harriet Johnson Brackey, the personal finance columnist for the Sun Sentinel, is an award-winning business reporter. Her columns for 2008 were named "The Best in the Business," a national award chosen by her colleagues at the Society of American Business Editors and Writers.

Brackey has worked at Business Week magazine and at USA TODAY, where she was a founder and part of the original staff of the Money section at the country's first national newspaper. After nearly 11 years there - spent covering the 1980s bull market, the insider trading scandals, the 1987 crash - Brackey left Washington, D.C., and came to The Miami Herald. She spent the next decade writing a column about personal finance that chronicled the stock market's Internet boom and bust, as well as the popular Money Makeover features.

Brackey also has done commentaries for Marketplace Money, which airs on National Public Radio and The Nightly Business Report which is broadcast on more than 250 PBS television stations nationwide. She also has been a radio guest on WLRN’s Miami Herald News.
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