OCR Text |
Show ftp 6 FEBRUARY 9, 1970 OIL & MINING JOURNAL 000 VDai? 0fflODy - BICHABP BLACKBURN Dear Mr. Blackburn: You wrote some time ago about the tax advantages of giving stock to children. Im sorry that I didnt save your column then. Would it be too much to ask that you repeat itAfany thanks in adnvace. Mrs. RJR Dear Madame: That was several months ago so there is no harm in repeating the information now. I am glad. you ask the question as this is an important area many parents overlook. At one time, gifts of securities or cash for the benefit of a minor almost invariably required the trouble and expense of establishing alegal guardianship or formal trust. Today, however, the Uniform Gifts of Minors Act has so simplified the making of such gifts that all SO states and the District of Columbia have adopted the Act in one form or another. The most or obvious advantage of a gift in custody for the benefit of a minor is that it provides a relatively uncomplicated way for a parent or relative to start a young person on the path to financial security and also work toward specific objectives, such as higher education. There are also advantages in the area of tax benefits. If certain conditions are met, all income and capital gains realized on the gift property may be taxable to the minor. If the minors total income is less than $900 in any year he incurs no federal tax liability. In addition, the minor may be able to take advantage of the $100 dividend exclusion. Also, even if the minor should earn more than $900, his parent or the other person responsible for his support can still claim a $600 dependency exemption (if more than one-ha-lf of the minors support is furnished by the parent or other person and if the minor is under 19 years of age or a student). However, to the extent that the gift property or any income which it produces is used to support the minor, income is taxed to the parent or other person who is legally responsible for his support. Beyond income tax advantages, there is also the possible benefit of moving assets out of the donors estate and the lessening the immediate impact of inheritance taxes. Dear Mr. Blackburn: I cant seem to do anything right in the market. I buy at the top. Then when its gone down and stays low, I decide to sell for a tax loss...immediately it starts to go back up after my sale. I get out of a stock that seems to have leveled off and the one I switch into goes down while the one I sold starts to move up. Just what am I doing wrong'Name withheld on request. Dear Sir: Dont feel too badly. There are many in that boat with you. Part of the problem might be your own impatience. financial advisor. And part might be an listed what they called Standard and Poors Corporation 7 Hidden Mistakes in investing. You might cut this list out for future review (or mail to someone that fits the picture). (1) The Itch to Take Small Profits. The Wall Street adage that you will never lose out by taking profit is a dangerous half-trutIt could put a sharp brake on your success with Too many investors sell too soon-satisf- ied potential. weans small potato gains. Impatience all too often missing out on the turly worthwhile gains that more usually come investor. to the longer-terTicker Tape Jitters. All stocks fluctuate in price (2) if not hourly! Such fluctuations more often than not daily, have no bearing on the true worth of the stock. (3) Looking Back Over Your Shoulder. Far too many investors are defeatists; having missed out on some gib gains in the past, they now lack courage to try again. Opportunity only knocks once, they say, when in fact in the stock market opportunity comes time and again! (4) Postponing Action. We ail know that procrastination is the thief of time. It can steal profits right from under your nose. When youve made up your mind on the basis of good information, act positively and affirmatively. g Stocks. Dont cling (5) Staying Married to to disappointing stocks. You would be far wiser in most in cases to weed out your poor performers and stocks with better prospects. for for Income. Dont over-reac- h (6) income. Dividends are fine, but dont buy them at the expense of quality or potential capital gain. (7) Buying the Market Averages. This is a dangerous market-as-a-whopractice. Even during periods when the seems on a sharp rise, as many as 40 of all stocks traded may not rise at all or even go down. Successful investors buy stocks on the basis of their individual prospects. They make their choice based on research, investigation and over-aggressi- ve Penny Market down, but by no means out Somewhat before the Big Board and the American Stock Exchange began to shatter dreams and hopes, the Salt Lake area penny market had already come down from its high crest of a year ago. It had in the process abided the criticism of the Securities &. over-the-count- er Exchange Commission, seen one of its broker members belly-u- p into bankruptcy court, and endured trading suspension hung on a couple or so of its participants. Now, pretty well shaken out, it appears to have reached a measure of stability and promise while the New York and the American stock exchanges recently have been groping for bottom. The Salt ' Lake area penny market is made up of about ISO stock issues of varied credentials and values, or lack of same. It was born of the uranium boom, petered out when the Atomic Engergy Commission began to stretch out its purchasing calendar, came to life again new mineral prospects that only embraced uranium, gold, silver and petroleum and marketing of dodge cars for amusement parks. By providing the opportunity for capital acquisition, the pennys market will do more Utah business and industrail development than all the agencies put together, says Edward Mawood, partner in Farker-Mawoo- d. There is no Standard & Poor or Dow index to measure the penny market. But brokers agree, however, that if there were an index, it would certainly be well down from a year ago. It has been hit by the same dwindling of confidence and lack of money that took the New York and American exchanges. But on the other hand, it has evolved into a special situations market, that brokers believe, will be aloof to any of the vagaries of the big markets. Richard Parker, president of Inc., firm the generated reported Parker-Jackson-Man- n, These range from more profits during December than in any other month of the year. No doubt, the penny market is the place for those who want a little faster action. But the high and the speculative flush as of shells characterized trading is oyer. And early last year now we have some good solid with money in the companies bank; with properties; with good ideans. inventions to the manufacture Restrictions on trading on not but as well. And, more recently, it has been the vehicle for some new under writing or trading of several new Special situation stocks far removed from minerals. development of fluidic - smaller price stocks by the New York Stock Exchange member houses has tossed a lot business to the benny tockbrokers, Mr. Parker adds. While interest and price on some highly speculative stocks have dwindled to practically nothing since last January, some company issues are holding up with good trading support, says & Co. lyle Davis of Wilson-Davi- s Buy-sal- e ratios and trading volume are about the closest the penny market can come to a measurable index. They show, at least, reasonable trading stability for the past four months -though off about half from a year ago, says Mr. Davis. The brokers who have survived the cresting of the last penny market have emerged pretty strong, says David Weston of Weston & Co., Investment Securities. One of the big problems has been data processing. His own firm recently installed a $60,000 computer office. think the bucket shop image is waning and were getting a more credible broker in the community. He shares the view that the penny market can be a spawning i ground for new business and industrail enterprises. This area has a tremendous reservoir of talent. There are more new ideas here per capita than any place in the country. State House passes strict surface mining law The Washington House has passed a bill 8S-regulating surface mining in Washington and sent it on to the Senate. 8, The bill would reauire stripmine operators to file a reclamation plan before obtaining a state permit. The House also placed administrative responsibility of the act with the director of the Department of Environmental Quality, which has not been created yet. A Senate committee reportedly has amended a similar bill to give jurisdiction to the State Department of Natural Resources. Under the bill the definition of mining does not relate sole ly to precious metals, but also to such operations as gravel pits. h. m Slow-Movin- re-inv- Over-reachi- ng le analysis. Interior eyes changes (Continued from Page 1) and development in extracting oil from shale. The congressmen, in turn, have informed Secy. Hickel of their concern that a policy be adopted which does in fact encourage proper development of our oil- - shale resources within central guidelines of national welfare and security. The Nixon Administration has an opportunity to sweep away the web of emotionalism and fear that has pervaded the issue and look anew at the bright aspects for development of a very important new energy take a lot of capital investment source, Mr. Wold and Mr. to develop shale land, Mr. Lloyd said. Hansen said. Previous administrations He said Utah officials have have been intimidated by claims conferred federal that aother Teapot Dome government on with two matters: scandal is inherent in any The state be allowed to loosening of the tight vise placed select some of its unfilled land around development of oil rights in the area, to shale, Mr. Lloyd said. provide larger land packages. Mr. Hansen said state -- To combine about 25,000 from state royalities oil lands acres of state lands with 30,000 start a five percent and are acres of contiguous federal lands graduated to 12H percent. in the middle of the Uintah Normally royalty payments Basin, also to provide large land open at 12 percent, but we package which might encourage figure the first few years will oil shale development. In Utah, the majority of the oil deposits are feet under the surface. 2,000 THOUGHT FOR THE WEEK: This may require the use of No success can compensate for failure in the home. nuclear explosives to stimulate David O. McKay oil extraction from underground formations. The state is ITS YOUR MONEY appears weekly in the Oil & Mining attempting to conduct such an Journal. If you have a question, write: experimental project in the Richard Blackburn, Las Vegas SUN Uintah Basin, using the services P.O. Box 4275, Las Vegas, Nevada 89106 of CER Gconuclear, Las Vegas, oil-sha- most-desirab- le Nev. le |