
                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: MONDAY, November 15, 1993                   TAG: 9311130007
SECTION: MONEY                    PAGE: A-8   EDITION: METRO 
SOURCE: MAG POFF
DATELINE:                                 LENGTH: Medium

DIVERSIFY IRA FUNDS FOR PROTECTION AND INCOME GROWTH

My wife and I both have Individual Retirement Accounts of approximately $31,000 each at our local credit union. They are earning about 4 percent interest. We are both 59 and we are not planning to start drawing from our IRAs for a few years.

America's Utility Fund Inc., in which we have investments, has an IRA plan with a much higher yield. Would it be wise for us to roll over our existing IRAs and start investing with the fund's IRA, or would the risk be too great?

You do not have to put all of your IRA money in one place. You can, if you wish, split your money, keeping some in cash for safety and investing some in one or more stock mutual funds for growth. Your IRAs are large enough to seek the protection of diversification.

America's Utility Fund is a so-called sector fund because it invests in only one industry. Utilities have a good return and a low risk. Right now utilities are a hot investment in the market, but you never know when the market will turn its back on an industry - with or without reason.

Besides, you said you already have some money in that fund. You should be seeking more diversity. Virtually all mutual funds offer IRA programs.

Many people put their retirement money in conservative mutual funds with their portfolios spread among many industries. These are balanced funds - balanced between stocks and bonds - or growth and income funds, which seek both appreciation and dividends.

Others with less risk tolerance seek a fixed-income fund that invests in short- and intermediate-term bonds or a Ginnie Mae Fund. Read investment magazines for listings of good no-load funds.

Deducting depreciation on home computers

My boss said he deducted the cost of his home computer because he uses it exclusively for work. I want to do the same thing. What form do you use for this? What are the regulations?

J. Patrick Budd, a certified public accountant with the Roanoke firm of Budd, Ammen & Co., said self-employed people can deduct a share of depreciation for a home computer if it is used predominately for business purposes.

An employee, however, cannot claim a deduction unless the employer requires purchase and use of a home computer (or a car, or any other home equipment). Use of the computer must be a condition of employment for the convenience of the employer.

In both instances, Budd said, people must maintain a contemporaneous log of personal and business usage. This must be as detailed as a log for a car that is used for both business and personal matters.

You can deduct a share of the depreciation for the ratio of the time the equipment is used for business.

You would use Form 4562 to compute the depreciation. This amount is then transferred to line 4 of Form 2106.

Survivor collects from joint account

If you're half-owner of a certificate of deposit with your mother and your mother passes away, does all of that joint CD become yours, or does it have to be added into her estate?

The money belongs to you.

When people own accounts jointly, the money passes to the survivor even if there is a will stating otherwise.

The money cannot escape taxation, however, if your mother's estate is worth more than $600,000. If the estate is worth that much, the account must be calculated as part of the estate and taxes must be paid. But if her estate was worth less than $600,000, this is not a problem.

Stock certificate valueless

Enclosed is a copy of a stock certificate for five shares in The New Burlingame Telegraphing Typewriter Co. Inc. in Arizona in April 1912. The certificate was issued in 1913 to my deceased husband's grandfather. Could it possibly have any value today?

Sorry, the certificate has no value - and hasn't had value for a very long time.

Peter Milward, manager of the Roanoke office of J.C. Bradford & Co., asked the firm's librarian in Nashville to research Burlingame.

She found that it went out of business in 1929. There is no record of such a company after that date. Milward said Burlingame seems to have been a victim of the stock market crash in that year.

If you want to research the matter further, you can write to the state corporation commission in Phoenix.

Mag Poff will help find answers to your personal finance questions. Send them to her at the Roanoke Times & World-News, P.O. Box 2491, Roanoke 24010. Or call (703) 981-3434 and when asked for a mailbox number, press 66639 (MONEY), followed by the # symbol.

by CNB