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Stock
Trading: “Keeping Records and Basis”(continued
from previous page)
every transaction, most local
and national brokers will provide a year-end statement of transactions.
If the broker does not provide a year-end summary, a statement should be
prepared detailing all purchases, sales and related transactions throughout
the year. This statement along with the issuance of Forms 1099-DIV
and 1099-B, usually will provide us with the capital gain or loss information
to file an accurate tax return.
The
retention of these records from year to year is an essential task since
the majority of stock trades span over more then one tax year especially
with mutual funds, which tend to be held for longer periods. These
records are very important in the computation of the cost or basis of stocks
and mutual funds.
Computing
the basis of a stock or mutual fund can be complicated. The most
common methods for the basis computation are FIFO (first in, first out),
an average cost when sold shares are unidentified. Also there are
software programs and |
Internet
portfolios that can do all the calculations with nominal cost and a little
data entry.
Changes
in Social Security Benefits
President Clinton recently signed legislation, passed
by Congress that allows people, age 65 through 69, to work and receive
all of their Social Security benefits. Because the law became effective
January 1, 2000, you may be eligible for benefits for the first few months
of this year. In order to become eligible for payments back to January
1, 2000, however, you must contact Social Security by phone (1-800-772-1213)
or visit any Social Security office before July 31, 2000. If you
would like general information about the new law or Social Security benefits,
visit the website www.ssa.gov on the Internet.
If
you are eligible to receive benefits now but delay benefits until you reach
age 70, you will receive special credit for each full month in which you
are eligible for, but do not receive, those benefits. This credit
will increase the amount of retirement benefits you will receive
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or increase
the benefit amount your spouse receives if you die.
The
amount of credit you could earn depends on your year of birth. The
following chart shows the amount of the credit that would apply for each
year that you choose not to receive benefits. If you choose to receive
payments for only a part of a year, partial credit will be given.
As the chart below indicates, if you were born in 1934, for example, and
choose not to receive benefits until age 70, your benefit would be about
27.5 percent (5.5 percent for 5 years) higher.
Delayed Retirement Credits
| Year of Birth |
Annual Percentage Increase |
| 1930 |
4.5% |
| 1931-32 |
5.0% |
| 1933-34 |
5.5% |
| 1935-36 |
6.0% |
If you are unsure about the
status of your benefits, Social Security can answer most of your questions
over the phone.
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