Your kids may thank you, but the tax man won't

Q. In 1998 I gave gifts of $7,000 each to two relatives. Can I deduct these gifts from my 1998 taxes?

J. M., New York

A. You cannot, says Ed Slott, an accountant based in Rockville, Centre, N.Y. You can give gifts of up to $10,000 to any number of individuals per year, free of gift taxes. But you can't then claim them as deductions on your tax return. Still, Mr. Slott notes that by giving gifts you have removed the money from the total value of your estate, which someday could help reduce your estate tax, if any is eventually due.

Q. My mother got stock in my father's company as part of a divorce settlement. We don't know how to trace how much it was worth when it became hers 15 years ago. The company doesn't have any information.

L.N. via e-mail

A. If you can't get information from the company or the father, you'll probably need to estimate the price, says Slott. To make an estimate, go to the library and look up the stock's value in back issues of The Wall Street Journal.

Alternatively, don't sell it. In the event of your mother's passing, the stock becomes part of her estate. The past value of the stock becomes irrelevant because its given a "stepped up" cost, namely, the price on the day of her passing.

Q. My bank keeps sending mailers urging its clients to pay for a service to check out the accuracy of credit reports. I don't use credit cards all that much. Is it a good idea to do this?

A.S. via e-mail

A. Most consumer counselors suggest you check out your credit report at least once a year, to make certain there are no inaccuracies.

You could use your bank's service - which likely gets its data from major credit-reporting bureaus Or you can contact one of them directly, such as Experian (800-682-7654) or Trans-Union (800-916-8800). There will be a modest charge depending on the state where you live.

If you are denied credit for any reason, you can usually obtain a free report from the firm that handled the credit check.

It is particularly important to check your credit if you're the victim of credit-card fraud.

Questions about finances? Write: Guy Halverson The Christian Science Monitor 500 Fifth Ave., Suite 1845 New York, NY 10110 E-mail: halversong@csps.com