Personal Finance: Ask the Experts

Q: I filed my federal return on May 10th and received an amended 1099 dated March 15th, then a second amended 1099 dated April 1st, and then a 3rd amended 1099 dated April 15th! The total net changes are less than $20. Filing a 1040x for 2012 seems like a lot of pointless work. Can I account for these changes on my 2013 federal return rather than file a 1040x for 2012? Thanks for your help.

John
Elkton, Maryland

Q: My wife and I are retired and she is required to take funds out of her retirement IRA. Several years before we retired, we established a living trust which includes most of our assets. Now, we want to transfer her retirement IRA to the trust. We have been told that, by transferring her IRA to the trust, she would be required to pay substantial income tax. Is it possible to make the transfer without having to pay taxes at the time of the transfer?

Clarence
CA

My wife and I are both retired and have no mortgage. Because of this we use the standard deduction and have a very simple tax return. We each receive a 1099R and a SSA-1099. We also receive a consolidated form 1099 for investments. We have no other dependents or deductions.

My question: How do you find a tax preparer who is willing to give you an estimate of the cost BEFORE you have them start your return?
Thanks for your time.

Richard
Corning, CA

It's high school and college graduation season and we know what that means: gift cards. Lots of 'em. (For other graduation gift ideas, see my Sunday column.)
An ever-popular graduation gift, billions of plastic gift certificates are purchased every year - but an estimated $1.7 billion a year sits on gift cards and never gets spent.

For graduates who get too many gift cards to retailers they don't like or want, Nerd Wallet personal finance expert Joseph Audette suggests swapping them.

Sites like CardPool.com, CardCash.com and GiftCardGranny.com let you unload those unwanted cards for cash. The sites cover hundreds of retailers, everyone from Sports Authority and Macy's to Burger King and Starbucks. You can also buy gift cards at a discount off the card's remaining balance.

For instance, CardPool.com will buy your card for up to 92 percent of its value; it sells cards at discounts up to 35 percent off face value. Currently, among dozens of American Eagle gift cards for varying amounts on CardPool.com, a $100 card is listed for $80, a 20 percent discount.

In California, gift cards cannot expire, except in very specific situations. If the gift card's value is less than $10, it can be redeemed at the retailer for cash. But if the company goes out of business, you're basically out of luck.

So if those gift cards are gonna gather dust in a drawer or sit unused in your wallet, exchanging them through an online swapping site could be an answer. Some card-swapping sites have fees; do a comparison before you decide.

And note: One longtime card-swapping service, PlasticJungle.com, announced this month that it is no longer in the business.

My wife and I each have one son from a prior marriage. They both are college graduates. We own two homes that are not of the same value. My wife wants to get things sorted out so that when she dies her son is well taken care of. She has been talking about a trust. I am not too concerned about my son. I believe that he can take care of himself and that we do not have to save our money for them. I feel she is more concerned about taking care of them from the grave than taking care of us. To make peace, I am about to go see a financial planner. My heart tells me it is not the right thing to do. We have a good relationship. What is your position on this matter?

Due to federal furloughs, the IRS is closing all its offices and toll-free hotlines on five days through summer: May 24, June 14, July 5, July 22 and Aug. 30. All of those dates, except Monday, July 22, are Fridays.

That means some 400 IRS taxpayer assistance centers, such as the Sacramento office at 4330 Watt Ave., will be closed, as well as all IRS customer service lines. Many of the IRS website's tools, such as "Where's My Refund?" also will be shut down.

But it doesn't mean that taxpayers will get any breaks on their tax-filing deadlines. Taxpayers are still required to file their returns and pay any taxes due as usual.

The only break: If an IRS deadline to provide documentation falls on a furlough day, you'll get the next business day to get your paperwork turned in.

Q: I made $80,000 and TurboTax said I was disqualified from deducting the interest I paid to federal government on the parent loan and/or the tuition I paid. Out of pocket, both totaled over $20,000. I know I would only have received the tax education credit on the out of pocket tuition I paid but since I can't take it, can my son?
Although he was a full-time student, he made about $20,000 working part time at a restaurant and singing at a church. My status is a qualified widow..because my husband died in 2011 I was able to file joint and married.. so the threshold was 160,000 ..he had been disabled and had no income it was same source of guns..seems to penalize non married people whose income is same as two married people. Anyway if I claim my son, can he take the deductions I was not able to? I assume TurboTax was correct in saying I wasn't eligible.

Teresa
Sacramento, CA

Q: I own a property with a sibling in a 50/50 Percentage Ownership. With depreciation tax deductions, do we divide that depreciation deduction by the percentage of ownership? That is what I understood is the federal tax law. My sibling's tax preparer states that we cannot divide it, that only one person can claim it and that we can take turns claiming the whole deduction. Thanks for any clarification you can provide.

Ricky,
Sacramento, CA

Several Bay Area coupon sites have launched Mom-friendly ways to save and give back at the same time.
One is CouponsforChange, started last August by Michele Boal, co-founder of Mountain View-based Coupons.com.

Whenever someone uses three of the site's 200 grocery, restaurant and personal services coupons, CouponsforChange will donate to national food bank - enough to feed one family.
"It's a Mom-to-Mom thing. You're saving your family money while helping other mothers struggling to put food on the table for their own family," said Boal, the site's chief philanthropy officer.
The donations go to Feeding America, a nonprofit that helps sponsor food banks in numerous cities, including Sacramento. Boal said in the last 10 months, CouponsforChange has donated enough to cover more than 100,000 meals through local food banks.

Another Bay Area coupon site, CommonKindness.com, donates to a charity or nonprofit that you select. How it works: For every grocery coupon you print off its site, CommonKindness donates 20 percent of the advertising fees it receives from the food manufacturer. Consumers can choose from dozens of local and national charities, from pet shelters to arts groups.

In both cases, the consumer gets the full value of the coupon.
"It's a way for someone to feel good saving money for their own family, while giving back without taking anything out of their own pocket," said Boal.

Q: I just turned 71, so I received the allotted amount from an IRA account and from an ICMA account. My husband and I live comfortably with our pensions right now and don't need this money yet. We have health insurance, but we don't have long-term care insurance. Where can I invest the money, so it will produce a decent amount of interest and be available if the need arises?

Alicia
Woodland, CA

Q: My wife and her sister were deeded their mother's home 15 years ago. Their mother bought the home 45 years prior. What would be the tax base for determining capital gains?

Sam
Sacramento

Here's a novel idea for a Mother's Day gift: financial security. In launching a new monthly financial blog, Financial Planning for Everyone, the Certified Financial Planner Board in Washington, D.C., says mothers often overlook their own financial needs.

"Perhaps it is time for those of us who love and value the mothers in our lives to step it up a bit," said Eleanor Blayney, the CFP Board's consumer advocate, in a statement. "This year - along with the carnations and chocolates - consider making an IRA or other savings contribution for mom."

As the family's "domestic CEO", women generally live longer, are often single for more years and may not have as many years in the paid workforce. They need to become a little more selfish, says Blayney, about what they'll need to live on long-term.

She recommends that moms consider these steps:

Our recent column on "how to improve your online image" offered tips on making sure that a Google search of your name or company yields the best possible results.

Here are some more tips:

Social media savvy:

Locally, the Social Media Club Sacramento is hosting its next monthly gathering on May 16: "Guerilla PR Strategies for Tech Startups," where five Sacramento-area tech company CEOs will discuss how they "create buzz about their product or service without spending a fortune."

The free event, from 6:30 p.m. to 8:45 p.m., takes place at the Urban Hive, 1931 H St., in Sacramento.

The five panelists are: Elizabeth Dodson of HomeZada; Aaron Klein of Riskalyze; Alexander Lowe of iSnap; Robb Moore of ioSafe; and Brett Owens of Chrometa.

Founded in San Francisco in 2006, the Social Media Club hosts local chapters in 300 cities and countries, bringing together individuals and business to share "digital media literacy." The Sacramento chapter hosts monthly meetings and quarterly workshops to share ideas, tools and tips on using social media effectively.

Help from Yelp:

Small business owners are invited to "Wednesday Webinars" that cover how to use Yelp.com's free tools, including how to respond to positive/negative customer reviews.

This month's webinars are May 15 and May 22.

Small business owners can set up a free account at biz.yelp.com, which lets them access their business listing to update hours, add photos and interact with customers, both publicly and privately.

Since launching in San Francisco in 2004, Yelp says about 80 percent of its 39 million posted reviews are positive, at least three-stars or above.

"Thanking the consumer who writes those (positive comments) is always a plus," said Morgan Remmers, manager of Yelp's local business outreach.

For the negative reviews, she suggests taking "a deep breath" and waiting 24 hours before responding. That lets the comments sink in and helps avoid "any kind of defensive attitude, snarkiness or emotional tone" in your response.

Generally, brevity is your best bet: "Thank you for your comment. We appreciate customer feedback and will discuss your concerns with our staff."

Even though a nasty review feels like a personal attack, by politely responding and acknowledging their complaint, you can often defuse the anger, said Remmers. And if you're lucky, she noted, the writer might soften or even pull down his or her negative quotes.

In the 1990s we established an A/B family trust and have always placed all assets in the name of the trust with us as trustees. We do not expect to exceed the $5 million estate threshold and wish to convert to a simple family trust.
How will this affect all the documents established as "James and Mary, Trustees Under 1990s Family Trust?" We have invested in several real estate trust deeds. Must these documents be quitclaimed to the simple trust or can the simple trust be stated as just a revision to the A/B trust? Thanks for your help.

James and Mary, Elk Grove

What can Spider-Man teach your kids about money? Plenty, according to the creators of a first-ever financial literacy comic book for kids: "Avengers Saving the Day."

On Saturday, free "Avengers" copies will be given away at comic book stores in Sacramento and across the country, part of the 10th annual "Free Comic Book Day." The event, sponsored by comic book publishers like Marvel and DC Comics, is expected to give away 4.5 million copies of various titles from America's favorite superheroes, from Batman to Sonic the Hedgehog. Participating stores in the Sacramento area include Big Brother Comics, Empire's Comics Vault, Metropolis Comix, and River City Comics + Games.

"Avengers: Saving the Day" is a special collaboration between Marvel and Visa Inc.'s "Practical Money Skills for Life" website. It features Spider-Man and other Avengers battling bad guys, while slipping in messages about budgeting, banking, saving and other money-minded wisdom.

He may not have graduated from high school yet, but Sean Burris is already airborne with his first business venture: Classic Jet Tours.

Fueled by his passion for vintage jet airliners from the 1950s and '60s, the 18-year-old has organized two charter flights with paying passengers: on a Douglas DC-8 from McClellan Field in Sacramento and a British BAC 1-11 out of Dallas, Texas.

His company's next charter: a 50th anniversary flight in October aboard the BAC jetliner.

For his entrepreneurial efforts, the Bear River High School senior recently earned a $1,000 college scholarship from the National Federation of Independent Business. He's one of five California high school seniors to win college scholarships in the NFIB's annual competition, which awarded 100 scholarships to business-minded students across the country.

Burris, a Lincoln resident, is majoring in entrepreneurship this fall at Northeastern University in Boston.