In search of a mutual fund that avoids Uncle Sam
Q I am an 85-year-old retired teacher and I have managed to save several thousand dollars. Is there a fund where I could put this money that I would not have to pay taxes on?
M.E., Westwood, Calif.
A Look for a tax-managed fund, says Pat Schipper, a financial consultant with Prism Financial Group in Overland Park, Kan. These funds, which are offered by most major mutual-fund groups, aim to hold down dividend and capital-gains distributions, and hence, the year-end tax bite.
There are well over 100 tax-managed funds including multiple-share classes, Ms. Schipper says. To get a list of tax-managed funds, go to the Morningstar Web site (www.morningstar.com).
Q I have a five-year-old granddaughter and six-month-old grandson. How can I best utilize their birthday and Christmas gifts of cash? The gifts total $200 to $300 on these occasions.
R.C., Sayre, Okla.
A Consider setting up education IRAs for your grandchildren, says one financial adviser. You can contribute up to $500 per year per child.
Alternatively, you could put the money into growth mutual funds, using a custodial account. Check with major fund companies, and they will send you the necessary paperwork.
Q I'm a small stockholder and I plan to sell some stock that was acquired as a result of the breakup of AT&T into numerous Baby Bells back in the mid-1980s. I believe I'll need to know the share value at the time they were acquired for tax purposes. I should have kept better records. Can you help?
H.G., Fullerton, Calif.
A According to Eileen Connolly, a financial information officer with AT&T, you should contact the Baby Bells, or their successor companies. (Several of the original Baby Bells have merged or split off into different companies.)
The Baby Bells have share-price information in their computer databanks. AT&T, for its part, has price data for shares it issued immediately after the breakup, Ms. Connolly notes. Contact AT&T shareholder services at 1-800-348-8288.
AT&T, however, does not have records on Baby Bell share prices after they went their own way, Connolly says.
Questions about finances? Write:
Guy Halverson
The Christian Science Monitor
500 Fifth Ave., Suite 1845
New York, NY 10110
E-mail: halversong@csps.com
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