Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, August 1, 1994 TAG: 9408010016
SECTION: BUSINESS PAGE: 6 EDITION: METRO
SOURCE: Mag Poff
DATELINE: LENGTH: Medium
A: There is no truth to that announcement, or else there was a misunderstanding.
Kenneth Prickitt, a certified public accountant with the Roanoke firm of Young and Prickitt, said trusts themselves are taxed more quickly on less money. Tax rates for trusts start at 34 percent and work up rapidly. Perhaps the speaker at the seminar was talking about taxes on the trust itself.
For the beneficiary of the trust, on the other hand, the money is treated as any other income. All your income will be added to determine your tax bracket. It might be true, in individual cases, that $7,500 would push someone into the 39.6 percent bracket, but this is not a general rule. Prickitt said trust income would be treated the same as wage, dividend or interest income.
Old money worth looking for
Q: When I was a little girl, 4 or 5 years old, I played with a girl whose father had his arm cut off in an accident. When he got money for his accident, he put money in the Raleigh Bank at Bluefield or Beckley, W.Va., in my name and his daughter's name. What do they do with this money if no one claims it? I am now 62 years old.
A: Under current law in West Virginia (as in Virginia), abandoned bank accounts are escheated (or reverted) to the state in which the funds are located. A person who can prove the money belongs to him or her can claim it at any time, but abandoned accounts generally do not earn interest.
A half-century or more ago, however, the laws were not so formal. Your account may simply be lost.
Dwight Smith, spokesman for the division of unclaimed property in the West Virginia treasurer's office, said the escheat laws were not passed in that state until 1967. He said the law required banks to send the state all abandoned accounts dating back to 1954, but few of them complied retroactively.
In your case, we are talking about the 1930s. Smith said the account probably was not escheated, but a search is worthwhile.
All claims for escheated property in West Virginia must be submitted in writing by the person seeking assistance, he said. You should include your maiden name, your Social Security number, the full name of the depositor, number of the account if you have it and any other information that might assist the search. Send your letter to Office of the State Treasurer, Division of Unclaimed Property, State Capitol, Charleston, W.Va. 25305.
The Bank of Raleigh was acquired some years ago by Bank One of Charleston. A spokeswoman there said she knew of no records that old, but the bank will search. Send the same information as above to Bank One, West Virginia, Charleston NA; 707 Virginia St., Charleston, W.Va. 25301. Address the letter to the attention of Michelle Townsend in the marketing department.
Let the money build
Q: If I drew on a tax-deferred annuity in 1993, can I draw on it again this year without disclosing to the IRS the full amount I have in the deferred annuity? Since it comes due in 1995, would it be wise to wait until 1995 before drawing on it? I don't need the money at this time anyway.
A: J. Patrick Budd, a certified public accountant with the Roanoke firm of Budd, Ammen & Co., said you can pay taxes on the amount of money you withdraw without disclosing to the IRS the balance in the annuity.
Whether you take the money this year or next year depends on the return you are receiving from the annuity, he said. If you could earn a higher rate in a taxable investment, then you should take the money and reinvest it. You also must consider whether the annuity policy has a penalty for early withdrawal. If you cannot earn more money elsewhere, you should let the money build up on a tax-deferred basis.
Most people buy annuities so that they can have income when they really need the money. You can, therefore, let the money build while you delay paying taxes.
by CNB