“Family loans save on taxes (Worcester Telegram & Gazette)” plus 3 more |
- Family loans save on taxes (Worcester Telegram & Gazette)
- Loans save lives in Japanese city (Omaha World-Herald)
- Credit Card Debt Horror Stories (PRWeb)
- Credit Card Debt Horror Stories (PRWeb via Yahoo! News)
Family loans save on taxes (Worcester Telegram & Gazette) Posted: 27 Dec 2009 04:33 AM PST
Estate planner Richard Behrendt helped his client make $5 million loans to each of his children this year, avoiding gift taxes of 45 percent and saving the kids as much as $837,000 apiece in interest.
Rates for so-called intra-family loans have declined as much as 53 percent since 2008. The timing of it was clearly tied to the rock bottom of these rates, said Behrendt, who works for Robert W. Baird & Co., based in Milwaukee, Wis. The loans may be the perfect holiday gift to help relatives this year, according to Carol Kroch, head of wealth and financial planning at Wilmington, Del.-based Wilmington Trust. For wealthy taxpayers, they can be used for estate planning purposes, since gains earned will be free of estate and gift taxes. Thats because low interest rates and depressed asset values mean theres a greater possibility investments purchased with an intra-family loan, such as stock, will appreciate more than the loans cost, Kroch said. The rate for an intra-family loan made in January 2010 for less than three years is 0.57 percent. The rate is 2.45 percent for a loan of three years to nine years and 4.11 percent for a loan of nine years or more, according to the Internal Revenue Service, which sets the rates monthly. That compares with an average rate of 10.55 percent for a personal bank loan in the New York metro area and 12.51 percent for a credit-union loan, based on data from Bankrate.com. The chances are they are going to go up, the only question is how fast or how soon, said Bill Fleming, managing director of New York-based PricewaterhouseCooperss Private Company Services Group, referring to rates for intra-family loans. Behrendts client, who has a net worth of $100 million, loaned each of his three children $5 million for nine years. The children invested the money in a balanced portfolio seeking at least a 5 percent return, said Behrendt, a former estate tax attorney for the IRS. Any amount above the 1.65 interest rate, which was the February rate, should pass to the clients children free of estate and gift taxes, he said. The Standard & Poors 500 Index has increased 36 percent since February as of yesterday. The borrowers also saved on interest costs because of the low rates. Each will owe $82,500 in interest annually, compared with $175,500 if the loan had been made in February 2008 when the rate was 3.51 percent. Current federal law taxes estates exceeding $3.5 million for an individual or $7 million for a married couple at as much as 45 percent. Any gift to an individual of more than $13,000 annually may also be taxed as much as 45 percent with a $1 million lifetime exclusion per donor, according to the IRS. The estate tax is scheduled to expire for a year on Jan. 1 under the provisions of a tax-cut bill enacted in 2001. It comes back in 2011, taxing estates valued at more than $1 million as much as 55 percent. Senate Finance Committee Chairman Max Baucus, Democrat of Montana, has vowed to extend the estate tax in 2010 retroactively.
Five Filters featured article: Chilcot Inquiry. Available tools: PDF Newspaper, Full Text RSS, Term Extraction. |
Loans save lives in Japanese city (Omaha World-Herald) Posted: 27 Dec 2009 04:18 AM PST KURIHARA, Japan (AP) — Four years ago, suicides in this northern city were running at nearly double the national rate, and as the global financial meltdown hit Japan, they might have been expected to go even higher. But Kurihara has fought back, with impressive results. The reason is simple — a recognition that Japan's high suicide rate is not so much a feature of Japanese culture, drawing from samurai or kamikaze traditions, but is tied to the health of the economy. So instead of treating the suicidal just for depression, as has long been the practice, the city offers financial and legal counseling, along with "hope loans" — or "nozomi" loans in Japanese — to get the needy out of debt. The suicide rate in Kurihara fell from 48.6 per 100,000 people in 2005 to 27.5 in 2007, and city officials expect it to decline again in 2009, even as the rate rises nationwide. Now other municipal governments are looking to this city of 80,000 for inspiration. Makoto Ishikawa said his life was saved by a nozomi loan. The 47-year-old has an office job and also runs a family rice farm. Last year, he began drowning in debt to pay his two children's college fees and buy new farm equipment. "So many bills began piling up," he said. "I realized I needed help." His plight sounds much like that of millions worldwide in these tough times, but Japan is different. Here banks set stringent conditions for loans, forcing borrowers to rope relatives and friends into guaranteeing repayment. This can plunge a defaulter into extreme guilt and despair, said Yasuyuki Sawada, lead researcher for a report published last year by the University of Tokyo that showed a particularly high correlation between the suicide rate and economic indicators such as gross domestic product. Yasuyuki Shimizu, a leading anti-suicide campaigner, said: "Japan is a society in which the weak are beaten down, and they are beaten down more quickly than other places. Japan is not an easy place to live." "There's a notion in the West that Japanese people commit suicide because of some noble ideal depicted in literature or art," said Kurihara's mayor, Isamu Sato. "But it's not true. People are driven to suicide because they are struggling in their daily lives. And I'd like people to know that even a little city in rural Japan can take steps to effectively tackle the problem." The mayor commissioned a survey of 500 residents that found a high number of middle-aged, self-employed men who had contemplated suicide because of financial strains. Ishikawa, partly self-employed, was typical of the hard-luck cases in this city of rice farms, cattle ranches and hot springs. But rather than abandon hope, he went to the bank, which referred him to city hall. The city assigned him a caseworker, who got him legal advice and eventually a 10-year personal loan of 8.2 million yen ($93,000), at 7.9 percent interest, which he used to consolidate his debt. A similar loan from a consumer credit company would have charged double the interest. The nozomi loan still requires a guarantor, but he or she can be an immediate family member, such as a spouse, with the idea that the couple would work together to pay off the loan. Ishikawa's debt payments are about $1,000 a month — half of what he had struggled to pay. "The loan gave me breathing room, and now I actually have some money left over every month," he said. "The nozomi loan saved me before my troubles drove me toward suicide." Japan's suicide rate of 25.3 per 100,000 people trails only Russia, parts of Eastern Europe and, more recently, South Korea. Suicides jumped dramatically during a financial crisis in 1998, and more than 30,000 people have killed themselves every year since. In the first 10 months of this year, 27,644 people took their lives, a pace that could rival the record of 34,427 deaths in 2003. Three years ago, the Parliament passed a suicide prevention plan. "The law itself represented major progress," said Tadashi Takeshima, director of the government's Center for Suicide Prevention. "People began to realize that suicide was a serious problem. Before that, it's not something that the country recognized as a national crisis." The government upped this year's prevention spending by 10 percent to $175 million for research, mental health services, job training, education, debt-counseling and help lines. In late November it unveiled a "100-day suicide prevention plan" for the holiday season, traditionally a time when suicides climb. The Tokyo district of Adachi began teaching public employees this year to identify and counsel potential suicide victims. It has distributed educational pamphlets and is considering expanding training to volunteer groups. Kazu Yamazaki, who heads Adachi's program, estimates the district has lost 1,600 people to suicide over the last decade, and expects it may take 10 years to make a difference. "Suicide is really not something you can solve quickly," he said.
Copyright ©2009 Omaha World-Herald®. All rights reserved.
This material may not be published, broadcast, rewritten, displayed or redistributed for any purpose without permission from the Omaha World-Herald.
Five Filters featured article: Chilcot Inquiry. Available tools: PDF Newspaper, Full Text RSS, Term Extraction. |
Credit Card Debt Horror Stories (PRWeb) Posted: 27 Dec 2009 12:03 AM PST Personal loans do keep accumulating over time especially with such loans as school loans, vehicle debt and of course we must not forget the credit card payments! Beverly Hills, CA (PRWEB) December 27, 2009 -- Thousands of companies are stealing money right from people who need it the most! Illegitimate companies offer to set up debt consolidation assets and suggest credit counseling to people who are in debt. Many are stealing from ordinary people. For this reason a blog has been set up which is updated daily with tips and other up to the minute information and can be found at : www.sandboxarticles.com One of the first debt advice which a legitimate loan counsellor will suggest is to try to manage the household income and assign chunks towards repaying debt. For example a good idea is to take around 35% of the household income and use it to repay loans. Many try to pay the larger loans first, this is normally an error because the larger loans for example home or house loans normally have a smaller interest rate than their counterparts such as credit card debt and other unsecured loans such as appliances or vehicular loans, so debtors should start paying off the loans that have the most interest. This way payments are more effective and debtors avoid accumulation of more interest fees. Others do the error of paying too much for their loans, some people even paid around 80% of their total income and in the process they fight with their spouses due to the fact that they do not have enough money for everyday chores. Credit counsellors would definitely not suggest to anyone to pay more than 40% of his income towards a loan. It would be rather crazy to pay more than this. Credit counsellors can help someone who cannot cope with his debt. ### Five Filters featured article: Chilcot Inquiry. Available tools: PDF Newspaper, Full Text RSS, Term Extraction. |
Credit Card Debt Horror Stories (PRWeb via Yahoo! News) Posted: 26 Dec 2009 11:01 PM PST 1 minute ago 2009-12-27T15:14:01-08:00 Five Filters featured article: Chilcot Inquiry. Available tools: PDF Newspaper, Full Text RSS, Term Extraction. |
You are subscribed to email updates from Add Images to any RSS Feed To stop receiving these emails, you may unsubscribe now. | Email delivery powered by Google |
Google Inc., 20 West Kinzie, Chicago IL USA 60610 |
0 comments:
Post a Comment