Personal Finance: Ask the Experts

Get advice on money matters from The Bee's Claudia Buck and a panel of local experts

April 29, 2013
Sticker shock on high school prom: There's an app to avoid that

Got a teenager attending prom this spring? This year, the average U.S. family will spend $1,139 on high school prom night. That's everything from dinner to dancing shoes. And it's up 5 percent from last year.

Not surprisingly, most of that expense comes out of Mom and Dad's wallet. According to a recent survey of 3,000 families, most parents plan to pay for 59 percent of prom costs, while their teens will cover the remaining 41 percent. "With parents subsidizing this much of the total prom spending, there is little incentive for teens to cut costs," said Visa Inc., which sponsored the annual survey as part of its financial literacy program, Practical Money Skills for Life.

To help keep spending under wraps, Visa just unveiled a new, free, smartphone app, "Plan'it Prom", available on iTunes or Google Play. It lets you create a prom budget that includes the dress, shoes, flowers, hair and makeup, even the pedicure. You put in what you want to spend, then keep track as you shop.

April 29, 2013
Is an attorney required to change the beneficiary to our trust?

We need to change the beneficiary in our revocable living trust. Must that be handled through an attorney or can we make that change ourselves? If on our own, must the change be witnessed and notarized? Thank you!

Susana, Folsom

April 26, 2013
What are the advantages of holding title to real property as community property with right of survivorship?

Regarding the recent question in the Bee on changing title of your home to community property with right of survivorship, what is the overall benefit of making the change? We paid off our house about a year ago and wonder if changing the title is something recommended.

Barbara, Sacramento

April 25, 2013
Am I required to report a gift that is within the annual exclusion amount?

I am selling my house and wish to gift my sons from some of the proceeds. I understand they can each receive $14,000 from myself and $14,000 from my husband. This will be a one time event, so will not trigger gift tax. My question is, is there any paperwork involved and do we need to file special forms when we file our taxes? My husband and I use turbo tax and used the standard deductions last year. Thank you!

Linda, Orangevale

April 24, 2013
Should a spouse be named as beneficiary of a Health Savings Account (HSA)?

I just opened an online Health Savings Account (HSA). On the Designation of Beneficiaries Form, it asks for the name and address of the individual, or a trust that I would like the money to go to if I die. My husband and I have a trust together. Should I designate the trust, instead of my husband directly, as the beneficiary?
This leads to my second question. Our regular checking and savings account are titled under our trust. Should I have done the same for this HSA savings account? It is in my name only, not my husband's. Thank you.

Julie, Granite Bay

April 24, 2013
Are you a "squeaky wheel" on consumer complaints?

Do you know how to complain and get results? We're doing a story how to effectively complain to a company when something goes wrong with a consumer product. If you had a customer problem and got it resolved by talking/writing/emailing/blogging to a store or company, we'd like to hear your experience. Please contact personal finance writer Claudia Buck at: (916) 321-1968 or

April 24, 2013
Should I cancel or borrow from a whole life policy?

Q: I am uncertain whether to cancel or borrow from a whole life policy (with a $100,000 benefit) that is a little over 10 years old, in order to pay off credit card debt. The policy's cash value is $13,000 and the credit card debt is $10,000. I would reinvest the difference in stocks and bonds.

The bigger picture is that I want to buy a term policy for $1,000,000 because a different existing $400,000 term policy has recently run over its term and is incurring premiums that are too high.

On top of that, I found out that I am paying too much for another group policy through my employer (for $300,000). I want to get rid of that as soon as possible; unfortunately, I am unable to until the end of the year. An additional $100,000 coverage is paid for by my employer.

I have read so many different and often opposing opinions about whole life policies in the past few days that I am thoroughly confused and don't know whether I would be wiser to keep than to cancel it.

The reason for the total coverage of $1,000,000 (20-year term) I'm seeking is that my wife is disabled and cannot work. I want to know she is secure enough that, in case of my death, she can live off the interest. I am 46, my wife is 49.

Clearwater, FL

April 23, 2013
Do I have to provide a copy of my entire trust when applying for refinancing?

I have a friend trying to refinance her home under the HARP program and her home, her only asset, is in a trust. She has been told by USAA and another lender that she would have to submit her entire trust to them for evaluation before she can refinance. More recently she was told that lenders cannot refinance a property held in a trust and that it is against the law for the lender to refinance without a full copy of the trust. She is not willing to give that information to a group of strangers. Are there new federal laws that are going to make having a revocable trust obsolete?


April 21, 2013
How can my cousin and I agree on a fee for her services as trustee?

I am the single beneficiary of an irrevocable trust and my cousin is the trustee. The trust does not state how much the trustee can/must charge for services. She is hesitant to take any pay, but I would like to pay her. Is it possible to pay her out of the trust? She is the only one who can write checks for the trust but feels uncomfortable writing a check to herself, even though I approve.
What is the common practice? How can we handle this comfortably?

Anne, Sacramento

April 19, 2013
Beware phony charity scams tied to Boston, Texas tragedies

Consumers are urged to be wary of fraudsters trying to prey on public sympathies for victims of the Boston Marathon bombing and the West, Texas fertilizer plant explosion.

Just a day after the Boston bombing, for instance, the Boston Better Business Bureau reported that one phony charity scam had already surfaced "and more are likely."

The IRS, in a new warning on its website, said "Scam artists impersonate charities to steal money or get private information from well-intentioned taxpayers." The phony solicitations can arrive by email, phone, social media or in person.

Some fraudsters pose as charities, calling to solicit money or financial information. Others send emails, steering people to bogus websites that solicit funds, allegedly to benefit victims. The fake websites often mimic those of legitimate charities or use similar names.

"Social media make it very easy to reach a lot of people quickly, when emotions are running high and people feel the need to take action, any action, to help," said a statement on the BBB's website.

If you wish to donate, be sure you're dealing with a reputable charity or organization. Check out a charity's reputation with the BBB's Wise Giving Alliance or the state attorney general's office.

If donations are solicited on behalf of a family, look for indications of how funds will be used. If a family sets up its own assistance fund, be sure it goes through a third party, such as a bank, CPA or lawyer, said the BBB.

Other tips: Do not give or send cash; donate by credit card or check so there's a record of your donation. Do not give your Social Security, credit card or bank account numbers to anyone who solicits a contribution. Report phony emails to the IRS or the Anti-Phishing Working Group.

April 19, 2013
What are the pros/cons of JP Morgan's Efficiente 5-Year CD?

Q: Hello, I am a recent widow and I am for the first time handling my personal finances. I spoke with my bank's financial planner and he recommended the JP Morgan Efficiente 5-Year CD. It appears to have the benefits of a CD in safety, but has the ability to grow like an equity mutual fund. What are some of the pros and cons of this investment? Could you explain the associated costs?

Sacramento, CA

April 18, 2013
MoneyWise Teens: Rio Americano students win video award

What's "human capital"? As part of an economics class project, a group of 12th-grade students at Rio Americano High School entered - and won - a video contest that explains the definition of investing in yourself.

Their 4-minute video placed third in a "MoneyWise Teen" contest, competing against 32 other Northern California high schools.

For their third-place finish, each of the four Sacramento students and their teacher received $150 in ceremonies last week at the Federal Reserve Bank of San Francisco. They are: Rio Americano economics teacher Allie Armstrong and students Mondana Koshfam, Max Hayden, Victoria Quach and Colin Savage.

April 18, 2013
BBB hosts free paper-shredding event on Saturday

Want to get rid of financial paperwork safely?
The Northeast California Better Business Bureau is hosting a free paper shredding event on Saturday, April 20, from 10 a.m. to 1 p.m., at the Mel Rapton Honda dealership, 3630 Fulton Ave.

A mobile shredding truck will be on site to instantly shred file-size boxes of paperwork.
Individuals can bring up to six boxes for shredding: The first three boxes are free; for the rest, a $3-per-box donation is requested, benefiting the Boys & Girls Club of Sacramento.

To prevent identity theft, consumers are urged to shred anything containing financial information, account numbers, PINs, birth dates or Social Security numbers.

"Identity theft is a perpetual problem for everyone and damages so many aspects of our lives," said BBB president Gary Almond, in a statement. "The first step in protecting yourself is (shredding) all sensitive items."

In 2012, the Federal Trade Commission said identity theft was the No. 1 complaint reported by U.S. consumers.

April 16, 2013
Is it necessary to file an estate tax return after a spouse dies?

Q: I have a living trust and am getting different opinions from friends about whether or not I needed to file an estate tax or death tax return after my husband passed 6 years ago. I am very confused. Thanks for any help you can give me. Some say it is not necessary if you have a trust.
Betty, Elk Grove

April 15, 2013
Will changing title from joint tenancy to community property, with right of survivorship, cause increase in property taxes?

Q: My wife and I own our home free and clear as community property. How do we change title to "community property with rights of survivorship" without causing the property to be reassessed for property tax purposes?

Patrick, Auburn

April 13, 2013
Countdown to April 15: Where to find last-minute tax help

It's down to the final weekend: Monday is the April 15 tax-filing deadline. Need some last-minute help? Here's where to find it:


The IRS announced Friday that its taxpayer phone lines will be open Saturday and for extended hours on Monday to help consumers with tax-related questions. The consumer help line - (800) 829-1040 - will be taking calls on:
Saturday, April 13: 9 a.m. to 5 p.m., local time
Sunday: Closed
Monday, April 15: 7 a.m. to midnight, local time
(For business-related tax help on Monday, call (800) 829-4933 from 7 a.m. to 7 p.m., local time.)

Both the IRS and the state Franchise Tax Board have 24/7 information on their websites, including tax calculators, frequently-asked questions, tax extensions/credits. You can download tax forms, e-file your return, pay your tax bill, request a six-month extension to file.



The Sacramento office at 4330 Watt Ave. in Sacramento is open with extended hours from 8:30 a.m. to 6 p.m. You can pick up tax forms, make payments and get help with questions from volunteer tax assistance . Other Taxpayer Assistance Centers are in IRS offices statewide.

April 12, 2013
Getting a tax refund? Here's where to spend it

If you're the average taxpayer, you're getting a $2,755 from the IRS and about $787
from the state. What're ya gonna do with the money?

While it's tempting to cash it in or charge up the credit card, think twice. Here are some money-wise ways to use those extra refund $$$, courtesy of the National Endowment for Financial Education:

1) Pay off credit cards. One of the smartest uses of a tax refund is to pay down credit card debt. Start with the card carrying the highest interest rate.

2) Start an emergency fund. Put a chunk into a savings account to cover unexpected expenses. Aim for three to six months' worth of income. If that seems too daunting, even $500 in a savings account could help in a financial emergency, like a flat tire, medical bill or other expense.

3) Save for retirement. Invest your refund in an Individual Retirement Account (IRA), where it'll grow tax-free.

4) Do repairs. If you've put off needed home repairs or car maintenance, use your refund to cover those expenses.

5) Prepay bills. Prepay your mortgage, car loan or student loans, or even your annual insurance bill. Be sure there are no prepayment penalties.

6) Splurge a little. If your borrowing/saving are in good shape, use your tax refund for a big purchase: a vacation, a new TV or other pricey technology.

April 12, 2013
'Money Matters': Teen's hip-hop video on finances wins award

Most hip-hop music is often about bling: spending it, not saving it. But in a recent contest tied to National Financial Literacy Month, teens rapped their way to $3,000 in prizes based on their money-saving lyrics.

The Money Matters Music Mogul contest, which drew 54 entries from across the country, is sponsored by the Charles Schwab Foundation in San Francisco and Boys & Girls Clubs of America, based in Atlanta.

Why hip hop? "Let's face it, personal finance in itself may not seem all that interesting to teens, so we're always looking for fresh ways to light a spark," said Carrie Schwab-Pomerantz, president of Charles Schwab Foundation, in a statement. "We thought hip hop was a genre they would find relevant, and the success of the contest proved us right...I can't get this year's winning song out of my head!"

Blake McGuire, 15, of Indianapolis won a $1,000 scholarship plus $500 for his local Boys & Girls Club with his winning entry, titled "Money All That Matters." The other four finalists each won $500 scholarships.

The song's music video was produced in Atlanta by Kevin "Khao" Cates, a Grammy-nominated music producer. You can hear McGuire's song and/or download an entire album, "M4: Money Matters Music Mogul$" album of winning hip-hop videos on personal finances.

April 11, 2013
K-6 teachers: Win your students free piggybanks

Are you an elementary teacher giving your students money-saving skills?

As part of National Financial Literacy Month, the Comerica Bank branch in downtown Sacramento is offering two Sacramento-area K-6 classrooms a chance to win free piggybanks for every student.

"We want to raise awareness of financial literacy," said Susan Siravo, Comerica's vice president of corporate communications. "It's really important to teach kids the importance of saving and how far you can stretch a dollar."

Siravo said teachers can submit a 100-words-or-less description of a money-managing concept they've been teaching or how they include financial literacy in their classrooms. Two winners will be selected by drawing. Each teacher will receive ceramic, yellow piggybanks for all their students, along with a financial literacy classroom lesson by a Comerica banker.

The deadline to submit an entry - by email to: - is April 30. Winners will be announced the first week of May. For questions, call (916) 491-1329.

April 11, 2013
How much detail should I submit with my tax return?

Q: I'm filing a Schedule D and Form 8949 for an inherited property held as an investment. The property was sold in 2012 and there is a net loss after deducting the real estate commission and expenses incurred to improve the value of the house, such as new kitchen floor, refinishing the wood floors, painting exterior and interior, and the cost of staging the house. Is there a way to itemized these expenses on either Sch D or form 8949 so the IRS can understand why I am claiming a net loss? Or should I not bother to itemized the expenses? Thanks

San Francisco

April 10, 2013
Can I put my current savings in a 401(k) plan from a former employer?

Q: I have about $50,000 just sitting in a regular savings account, not gaining much interest. Recently, I was sent a 401(k) account statement from a job I had over 12 years ago. It only has $100 in there now. Would I be able to use that account and incorporate some of my savings into it and manage my investments? My hope is to place some money in the account where I can gain some interest. I would be open to stock account or an IRA as well, but I am not too familiar with these. I could use some help.

Roseville, CA

April 9, 2013
Am I able to deduct loss on sale of condo?

Q: In Feb. 2006 I bought a condo for my personal residence for $175k and put $35k down. I lived there until Nov. 2008 when I purchased a home here and moved. From Nov. 2008 until Sept. 2012 I rented the condo out at market rate. I short sold the condo in Sept. 2012 for $52k with the mortgage balance at $120k. There was a write off amount on the mortgage which I plan to counter by demonstrating insolvency. Am I able to write off any of my capital loss on the condo?

Roseville, CA

April 9, 2013
What are tax implications in gifting funds from the sale of my home?

Q: As an unmarried trustee for a small (approximately $1 million) family revocable trust, I am considering a long-term relationship with a widowed friend, who also possesses a family trust. We wish to maintain separate trusts. Predictably, my home is the major asset in my trust -- with the remainder being CD's, annuities and cash.
What are the tax implications if I wish to sell my house and distribute the proceeds among my five children as part of their inheritance? I understand that the IRS has a $14,000 per year gift consideration, but what if I choose a larger amount, say $100,000 per child? Help.

Bill, Lincoln

April 9, 2013
Can I file using head of household filing status?

Q: My accountant told me something I found unbelievable, and I felt I had to get a second opinion. I have been spending a substantial amount of money in recent years to support my uncle, who lived in an assisted-living facility until he died in early 2013.

I claimed him as a dependent through the years that I've been aiding him, and he's been in the nursing home. But I also filed my taxes under "single" filing status. This year, my accountant claimed that the IRS rules had changed, and that I could file as "head of household" because of my support of my uncle, even though he never lived with me.

This would save me a lot of money. But I can't believe it's legal.

Thanks much for any help you could provide.


April 9, 2013
ScholarShare, the state's college-savings plan, hits $5 billion in assets

State Treasurer Bill Lockyer announced Tuesday that California's college-savings plan, ScholarShare, has reached a record $5 billion in assets held by investors.

That's more than double the $2.24 billion held in ScholarShare accounts five years ago. Since 2007, the number of individuals and families opening ScholarShare accounts has grown from 170,600 accounts to more than 243,000, according to Lockyer's office.

Named for a section of the IRS tax code, ScholarShare and other so-called 529 Plans allow anyone to open a tax-advantaged savings plan for a child's future college education. 529 plans are offered in nearly every state in the country.

California's plan, managed by TIAA-CREF, offers investors a choice of 19 investment options for their contributions. Deposits start as low as $25. When used for tuition, books, fees and other qualifying expenses at public/private colleges or trade schools, the 529 plan withdrawals are free from federal and California taxes.

April 5, 2013
Should I override my tax software or file a paper return?

Q: I refinanced my mortgage in 2012, which left a points balance that I had not yet fully deducted over the life of the loan. The IRS says I can deduct the remainder all at once in 2012 -- unless I refinanced with the same lender. Which I did. However, TurboTax and other online software programs do not make provision for a refinance with the same lender, instead, they are giving me the entire deduction for the points from my previous loan. In reality, I need to combine the points remainder with my new points -- and deduct all of them over the life of my new loan. I can juggle the numbers to make my return come out right (i.e. fake out the tax software), but I am thinking it might be safer to fill out the paper forms and mail them in. Advice? Thank you.

Sacramento, CA

April 4, 2013
What are the pros/cons of doing my own tax return?

Q: What are the advantages or disadvantages to doing your own taxes electronically rather than going to a professional tax preparer?

April 3, 2013
Facing financial hardships? State tax officials offer help

With the April 15 tax deadline just days away, the state Franchise Tax Board urges financially challenged taxpayers to contact the FTB for assistance.

"There may be people waiting until the last minute, who realize they can't pay what they owe," said FTB spokesman Daniel Tahara. "The most important thing is not to ignore it, because interest and penalties mean you could pay significantly more. We want people to know there's help available."

April 3, 2013
April is California's Financial Literacy month: Here's what's for you

No fooling: April 1 is the start of California's Financial Literacy Month (it's happening nationally, too), with free events, workshops and online tools to help us better manage our money.

"It doesn't matter what age we are or what our income is: We all make financial decisions every day," said Alana Golden, spokeswoman for the state Dept. of Financial Institutions, which oversees the state's financial literacy events. "There are so many free resources available that most of us don't take advantage of. You can attend a workshop, log onto a chat line, pull up a brochure on a many things to help us make well-informed decisions."

Here's a rundown of some of the events/tools getting attention this month:

California Financial Literacy Fair - Held annually at the state Capitol, this free event - April 10, 12 noon to 1:30 p.m. - is a chance to pick up info from some 30 nonprofits, state agencies and companies covering varied consumer financial topics: student loans, credit counseling, home mortgages, banking, taxes. It's co-sponsored by state Assemblyman Roger Dickinson (D-Sacramento), state Sen. Pro Tem Darrell Steinberg (D-Sacramento) and state Controller John Chiang. It'll be outdoors on the Capitol's north steps.

Neighborhood Financial Events - Four neighborhood sessions offer free information on consumer fraud, foreclosure, bankruptcy, mortgages, estate planning, investments, scholarships, banking and taxes. Sponsored by state Assm. Dickinson and state Sen. Steinberg, the dates/locations are:
April 10, Arthur F. Turner Community Library, 1212 Merkley Ave, West Sacramento
April 11, Greater Sacramento Urban League, 3725 Marysville Blvd.
April 16, Clunie Community Center, 601 Alhambra Blvd.
April 18, Fruitridge Community Center, 4000 Fruitridge Road;
All events are from 5:30 p.m.-7:30 p.m.

Mexico Consulate Financial Week - Running daily, April 22-25, from 9 a.m. to 1 p.m., the Consulate General of Mexico office at 2093 Arena Blvd. in Sacramento is offering free Spanish-language advice on banking, credit and other financial topics.

California Financial Literacy Month blog features a daily writeup on different local programs that revolve around money matters, from Bank of the West's "Moonjar" money-saving boxes for kids to Golden 1 Credit Union's financial workshops and webinars.

"Do Something" - During tax month, the nonprofit has teamed up with H&R Block to encourage young people - age 25 and under - to spread financial wisdom. Now through April 30, teens and 20-somethings can host a personal finance workshop with at least two friends, then be entered for chances to win $10,000 and $1,000 scholarships. There's no cost to host a Do Something workshop: free online handbooks are provided on three topics; debt, credit cards and personal finance.

Senior Financial Fraud webinar - The state's Senior Gateway is sponsoring a Financial Fraud webinar on April 23 at 11 a.m.,

FoolProof - This new site - aimed at teens and 20somethings - in April is hosting a series of "gullibility" quizzes - to test your financial smarts on everyday purchases.

April 3, 2013
Why did I get a 1099-R reporting a distribution from my IRA?

Q: I contributed to my Roth IRA in 2011, but discovered when preparing my 2011 federal tax return that I wasn't qualified to make a Roth IRA contribution because of my income level. So I recharacterized my 2011 Roth contribution to a traditional IRA in March 2012. In August 2012, I converted this money back to my Roth IRA. My understanding was this series of transactions are considered legal and correct. I received a 2012 1099-R from my mutual fund, and it says this money I pulled out of my traditional IRA is taxable. I don't understand this, because I didn't deduct the recharacterized contribution to the traditional IRA on my 2011 tax return.

April 3, 2013
Are there any local resources that teach young adults about personal finances?

Q: Are you aware of a local resource (such as an adult learning class) that teaches a young adult how to handle personal finances? Topics would include banking ins and outs (such as fees and how to avoid them), bill payment, budget creation and the like.

Rocklin, CA

Meet Our Financial Experts

Claudia Buck

Claudia Buck is The Sacramento Bee's personal finance columnist. Read all her columns here. Contact her at

Terri Carpenter

Terri Carpenter offers advice on job hunting, retraining and career counseling. Carpenter works at Sacramento Works Inc., the career and job training arm of the Sacramento Employment and Training Agency (SETA). With 15 years in the field, she has hands-on experience with everyone from first-time job seekers to career professionals seeking advice after a layoff or looking for a mid-career change. Ask her a question.

Carlena Tapella

Carlena Tapella is a partner in the law firm of Webb & Tapella Law Corp. in Sacramento. The firm specializes in estate planning and probate, such as estates, trusts, conservatorships and litigation. She is a past president of the Sacramento County Bar Association's Estate Planning & Probate Section. Ask her a question.

Kimberly Foss

Kimberly Foss, certified financial planner, is the founder of Empyrion Wealth Management in Roseville. With nearly 30 years in the financial industry, her clients include women in transition, small business owners, retirees and "pre-retirees." Ask her a question.

Jesse Weller

Gregory Burke, a CPA and tax expert with John Waddell & Co. in Sacramento since 1984, worked as an IRS tax auditor for six years. He’s a past chairman of the California Society of CPAs. Ask him a question.

Daniel Tahara

Daniel Tahara takes your questions about California taxes. Tahara, a spokesman for the state Franchise Tax Board, has 10 years of experience as a tax auditor. Ask him a question.

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