| OCR Text |
Show E8 The Salt Lake Tribune BUSINESS Sunday, ib 26, 1999 Donation of Stocks Could Be Utah: A Century Of Business Smart End-of-Year Tax Move liabilities. KNIGHT RIDDER NEWS SERVICE There’s a gift you can give this holiday season that can give you something back — a big tax Continued from E-1 luction. ee highly-err Richmondin 1904. “Growing up, it was not unusual for families to have one philanthropic while minimizing your tax liability, according to tax experts and non-profit agencies. “It will make the cost of [do- the year,” said Cliff Voorhees of Leland. “And I know it was that way in my grandfather’s day as well.” Utahns found work in sugar- nating] fairly inexpensive to you,” said Aubrey Rhodes, an Augusta tax attorney. It works like this: You purchase 100 shares of a company’s beet processing plants, as teachers and in the growingretail arena. stock for $10 a share, an initial investmentof $1,000. The stock’s Voorheesstill lives on 35 of the 100 acres of land his grandfather, C.O. Hansen, settled just west of Spanish Fork in 1873. But he too value climbs to $100 a share,giving your investment an appreci- ated value of$10,000. found it tough to make living from farming. slaughtering and meat-processing plant now employs about 20 people including several membersof his family. The farm is used to raise quarter horses and to grow food for the family’s cattle-feeding operations. Utah agriculture and agribusi- nessstill accountfor about 100,000 jobs and pumpabout$1.3 billion in annual payrolls intothestate’s economy. Yet compared with othersectorsof the Utah economy — retailing, services, construction and manufacturing — the state’s farming economyhaslost ground and now accounts for only 1 percent to 2 percent of Utah's gross state product. Thestate also had a majormilitary presence in 1890, with 785 service personnel stationed in Utah in 1890. Thelink to the mili- tary would expand dramatically after World War If and become an integral part of the economic activity in Utah. Miningalso continued to play a dominant role in the Utah economy until late into the 20th Y2K Bug: ‘Father’ Tried Let’s say it’s not worth liquidating the stock because it Cliff Voorhees checks out sides of beef at his Circle V Meat caret: Leland, in The. ‘eat. . triggercapital-gains taxes(20 perprocessingplantis located on the land his grandfather used for farming more than 100 years ago. ~ cent if the stock was held more century. “As late as 20 years ago, Utah’s economystill was heavily dependent on mining and natural- resource extraction,” said Jeff Thredgold, an economist who heads his own economic consultingfirm in Salt LakeCity. Mining employmentpeaked in Utah in 1981. That year, 20,000 people were employed in mining or about 3.6 percent of the state’s work force, said Ken Jensen, chief In 1900, the mining industry employed about 7,000 Utahns, or about 8.3 percent of the work force. The roots of the modern min- ing era can be traced back to the early 1900s. By that time, the state’s easily accessible surfaceore bodies had becomedepleted. Outside capitalists began consolidating the major mining districts of the state — Tintic, Mercur, Bingham and Park City, They “So I don’t think anyonein the world did more than me togetrid of this horrible two-digit field,” Bemer was not just any computer programmer. As part of his work with two common business-oriented language. He also developed a technology called ASCII, for American Standard Code for Information Interchange. It opened computing by letting machines communicate with each other. He also invented a technology that enabled laser Utah entrepreneurs embraced new technology that led to the state becoming recognized as a center of innovation and technol- ogy. Home-grown businesses such as computer software developers Novell and WordPerfect flourished As manufacturing activities declined nationally and moved overseas, the service sector rose nationwide. learned just might be that an embrace of a new technology should be better thought through and done with a great deal more Bemer has reams of reports and other papers to document how often he objected to the implementation of a two-digit year field to IBM and others. “This is a computer disaster that should never have been,”hesaid. Where It : At the time, IBM was oneof the few computer powers in an infant industry. In 1964, the companyintroduced the System 360 mainframe, which used a two-digit field and set the the way Microsoft's Windows operating system now dominates the desktop market. Frederick Brooks, an IBM mainframe executive during the 360 era, confirmed that Bemer warned IBM executives about the potential problems. But he said absolutely nothing else but a two- of potential class-action lawsuits and ensured that defendants would be held responsible only for the share of damages directly traceable to them in mostcases. Legal experts also said any case against IBM would be inherently weak because the technology of the 1950s left little choice but to adopta two-digitfield. “Certainly people may file suits against IBM if big problems law. though IBM may not be legally responsible, it could not absolve itself of societal responsibilities if significant Y2K difficulties devel- op. “If there are problems from Y2K, you can be sure thatfingers will be pointed at IBM,”he said. : For its part, IBM defers speaking specifically about its historical involvement with ‘2K. The evolution of the Y2K issue is bigger than any one company or the industry itself, said Glen Brandow, an IBM spokesman. the two-digit, four-digit issues could notbe readily resolved. have eaten enough memory to complaint, said Stephanie Moore, an analyst at Giga Lateiyeaed enuefar in advance to disarm a computer bug that they often the- orized had been fabricated by technology firms in search of new profit sources. Peter de Jager, one of the world’s leading experts on has spoken publiclyon the problem for the past nine years. He said audiences of corporate executives and government and agency leaders were unreceptive as recently as two to three years ago. aena thimanitate was not going to nue, 80 WI Meher the the Toronto analyst ls So among all the contra- make the machines almost useless, according to Brooks. “Using anything then but a two-digit field would have been irresponsibl id stupid,” said Brooks, now and a computer- science professor at the University of North Carolina. In recent years, corporations and institutions around the world haverewritten more than 900 billion lines of computer code at a cost of more than $300 billion in preparation for Y2K. Although the history of the Y2K bug could be traced to IBM,a half dozen legal experts interviewed said the company is unlikely to be held legally accountable in court for its actions, or lack ofactions, Congress in July passed limiting corporate iggeges for Y2K problems. bill capped punithe scope ete os Group, a market research pany in Westport, Conn. “ "IBMbhee ergir straightforward with from the Dog- wood “We've this van since we opened}tije facility in 1995,” said Armeh’ Boyajin, Hoe and Girls Clube; t director. “Mr. He basically said the imioney could used for that.” Hebbard, who was a club member as a youth in the 1950s and 1960s, has given the nonprofit group more than $200,000 worth of stock during the last three years, He said he purchased the Sun Microsystems stock about two years ago. Hebbard,52, said the donations not only help ‘with his tax planning, but give him a chance to give back to an organization he said helped him stay outof trou- bleasa youth. growing, thanks in part to Utahthat make disposable medical products. Wholesaling and retailing activities in Utah also have grown and now account for another 25 percent of the jobs in the state. “We have been helped there by the booming national economy,” Christensen said. ‘Although his new place doesn’t havethe bustle of Phoenix, Bemer is not exactly holed up in a back- REFRIGERATOR, DISHWASHER, NATURAL GAS RANGE, WASHER & NATURAL GAS DRYER ON SALE! MAYT: NEPTUNE SUPER puters. A huge Christmas tree stands off the living room, with toy trucks and stuffed toy animals surrounding it. Roots: Bemer, born ina small town in northern Michigan, was an only child. His father was a school superintendent, his mother an English teacher. He holds a bachelor’s degree in mathematics and, before retiring in 1982, worked for a half dozen companies as a top programnting In a career that spanned more BIG REBATES ON r, ENERGY EFFICIENT § 1962, when refrigerator-sized machines hadthe intelligence of today’s simplest desktop Bemer, the man behind the Bemerdeveloped the year field in the computer programming tructure that would enable machines to operate, fine-tuning it so abe could work with a four“4 for panne —oratwo-digit field — “58,” for example, which computers would translate into “1958.” But what happens when machines encounter “00”at the turn of the millennium? Do they understand that the year is 2000? Or do they assume that the world has reverted to 1900, when William a fashionable dance? “Thatis a very good question,” hesaidsoftly. He said the world has done a remarkable job in preparing its machines for the millennium. ‘inks nothing is kidding themselves,”he said. Perforina Save Up To Aiother WANs) $100 On the night when something may or may not Perey New Year’s Eve, Bemer and his wife disputed technology, does not lookatall like a Dr. Frankenstein whose work could lead to global problems. Instead, he has an easy smile, and offers lunch and a place to Dns MAYTAG stay overnight even to visitors who insist on dwelling on the work that has made him famous, or infamous. He loves cs about his six children, 11 children and four greatgrandchildren. When he’s not questions about Y2K, he fishes and does woodwork. Bemer and his wife, Bettie, lived in Phoenix t Still, maybe technology giants risk youth computers. Walter Effross, a professor at Washington College of Law, said memory, and the operating system ran on 12 kilobytes. Any year solutions over many years instead of just reaping the benefits of a computer revolution. But many companies wouldn't allocate rev- your income-tax and estate-tax 15-passenger van, born businesses such as those than 40 years, he worked at IBM only seven years, from 1955 to field larger than two digits would should have eased in Year 2000 deduct a whopping $10,000 from new ae Milton Ruben Chevrolet, help transport at- Utah economy,employing around 25 percent of the state’s work force. Unlike the national economy though, Ene still . executive. But as hard as Bemer argued, digit field could be adopted. He said typical 360 mainframes had between 16 and 32 kilobytes of Your $1,000 investmentresults in a $10,000 tax free gift to a good cause while allowing you to chase a ers to theater employees and yers is the largest sector in the because they'll be judged from the perspective of the time when the two-digit field was developed,” said David Miranda, a lawyer in Albany specializing in technology IBM's a year, your incometax rate if held less) and bump you into a higher income-tax bracket. So you donate the shares to charity. The nonprofit organization used the shares, which had a value greater than $50,000,to pur- work- develop from Y2K, but I don’t think any of them will stick IBM did act quicker and more efficiently than many other technology eee ee in its software and ‘ines, and telling consumersA client companies what is and is not Y2K printers to function. owner of Hebbard Electric, an woods shack. His modern, airy two-story home overlooks a lake and has four bedrooms. His cluttered study has two desktop com- el and four digits, he worked along- side Grace Murray Hopper, a computing legend. Together they developed a standard programming language called COBOL,for state. Computer programmer <= DRT err ree: Bemersays withfrustration. “But nobody wouldlisten.” Yet even as mining and the state’s defense industries were starting the decline in employ- Robert Bemer David agreed with Bemer, and appealed the matter directly to Taking It to the Top: Rather Today the service industry, representing a hodgepodgé of slightly. nology is never as simple as it looks, and what you accept today may come backat you tomorrow,” said John Searle, a professor of philosophy at the University of California at Berkeley. tion, Nixon asked him whetherhe nonprofit Utah Foundation. “If youlook at our economy today,it business from health-care commerce. “Who knows what'll happen, but anyone who thinks nothing will, is kidding themselves.” caution. “Look,I love the Internet, but you have to rememberthattech- than: acting on David’s informa- try to do business would have seem absurd to the caudillos of forces were at work upon the appeal to the White House has been reported before. In 1970, he rounded up nearly 90 top scientists and prestigious technical could help in repairing his TV set. oneofthe bestplaces in the coun- is very similar to the national economy,”hesaid. industry was concentrated in the Northeast, the idea that Utah would be recognized nationally as ment of Workforce Services. dictions, the clearest lesson to be Nixon. A hundred years ago when Service industries thrived in Utah as well, said Michael Christensen, an economist with the ment in Utah in the 1980s, new @ Continued from E-8 associations to argue the case with Edward David, who was President Richard Nixon’s science adviser. provided the money for further development. economist for the Utah Depart- To Stop Menace White House. Bemer’s accountofhis last shares of Sun Microsystems stock to the Boys and Girls Clubs of Augusta by John Hebbard Jr., electrical contractor. or both parents working away from the farm at least for part of A meat cutter, Voorhees opened Circle V Meatin 1965. The An example of this strategy in action is last week's gift of 700 Peau RUS. eeeae ie Tay 167-0900 PA 90609 5S. STATE 562-0900 |
