Church seeks practical advice on a cash problem

Q: I am the assistant treasurer in a small church. We have a negative cash flow due to insufficient collections. To pay current bills, we liquidated a $25,000 CD and put it in a bank account. We are also drawing on a mutual fund, which is down to about $4,000. We also own a rental residence, which provides $1,250 per month in income. But at this point, we are putting the rental income into savings for future repairs to the property. Is this the best way to handle our cash shortfall?

R.D., Bath, Maine

A: "We don't know how much your shortfall is each month, but it sounds as though you have done what you need to do to meet current obligations," says Gary Schatsky, an attorney and fee-only financial planner in New York.

Tap into the $25,000 account and use it carefully, Mr. Schatsky says. If it is ever depleted, turn to the $4,000 account. Do not do anything dramatic with the house, he says, since it is your main financial asset.

"As soon as possible, get an appraisal of the house," he says. Find out what it would fetch in a sale. If you were to sell it, "do it in an orderly way, retrieving the full value." But selling the house should be a last resort.

Q: I probably should know this, but I'm not certain about the answer. I'm about to get married, and will be taking my husband's last name. Should I notify the IRS about the name change?

Name withheld, New York

A: According to Ed Slott, a CPA based in Rockville Centre, N.Y., one should notify both the IRS and the Social Security Administration whenever getting married or divorced. He discusses this issue in detail in his 1998 booklet "Your Tax Questions Answered."

You can report your name change to the IRS by filling out Form 8822. (The form can be downloaded at www.ustreas.gov.)

For Social Security, call 800-772-1213 and ask how to get a new Social Security card with your new name. You will probably have to provide identification showing both your old name and your new name.

It is important both agencies have the same information, Slott says, so that they can match up your earnings records for proper credit.

Questions about finances? Write:

Guy Halverson

The Christian Science Monitor

500 Fifth Ave., Suite 1845

New York, NY 10110

E-mail: halversong@csps.com