Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, October 31, 1994 TAG: 9410310006
SECTION: BUSINESS PAGE: A6 EDITION: METRO
SOURCE: MAG POFF
DATELINE: LENGTH: Medium
I notice in the newspaper that some of those are marked "strips." Can you tell me what that means?
A: You can buy U.S. Treasury securities from a broker or from a bank, but you will pay a fee if you use this method. The fee will probably be about $50.
You have to use a broker to buy these securities on the secondary market for previously issued bills, notes or bonds.
If you want to buy new issues, you can become a so-called "Treasury Direct" customer of the Federal Reserve Bank. You will pay no fees for using this service, but the interest must be deposited directly into a bank account. Nor will you receive the security. All transactions are handled by wire.
To enroll, you should write or call the Federal Reserve Bank in Richmond. The telephone number for Treasury Direct is (804)697-8372. This is a toll call. Or you can write the bank at P.O. Box 27622, Richmond 23261-7622. Tell the bank representative that you want to become a Treasury Direct customer. The bank will send you a packet of information and forms you need to enroll.
Once you are enrolled, you can maintain the account virtually indefinitely.
Richard Wertz, vice president-investments at the Roanoke office of A.G. Edwards & Sons, said U.S. Treasury strips are a specific type of investment. They are U.S. Treasury securities that have been stripped of the coupons, which are sold separately. Without the coupons, you will not get interest, only the principal at the time of maturity.
As you might imagine, strips sell at a large discount from face value, since you will receive no interest. Wertz cited the example of strips that sell at $120 for each thousand dollars of face value. Strips are purchased through brokers, but they are not suitable for people who need income. Their value is the gain for people who can wait until maturity to claim the full face amount.
Paper trail
Q: I have an insurance policy originally issued by Union Life. I learned eight years ago that it had been transferred to Gulf Insurance Co. on Peters Creek Road.
I cannot find a Gulf Insurance Co. in the telephone directory. Could you locate Gulf Insurance Co. or whoever has the policies?
A: There is, indeed, no listing in the telephone directory Yellow Pages for Gulf Insurance Co. It does, however, show up in the business white pages.
That listing will lead to you to American General Life and Accident Insurance Co., which now has your policy.
Joyce Taylor, a spokeswoman there, said Union Life merged with Gulf. American General Life and Accident Insurance Co. bought out Gulf about four years ago. A letter was sent to policyholders at that time. About a year ago, the offices moved from the address you have to Mexico Way Northeast.
You might want to check your current address with the company. The Roanoke telephone number is 344-9235.
Tax loss
Q: We purchased land in 1987 for $11,000. For many reasons, we decided not to build on this land and resold it this year for $10,000, taking a loss of $1,000. How will this affect our taxes for 1994?
A: Fulton Gaylor, a certified public accountant with the Roanoke firm of McLeod & Co., said you will have a long-term capital loss of $1,000 when you fill out your 1994 income tax returns. This lost must first be used to offset capital gains.
If you have no capital gains to report, Gaylor said, you can deduct up to $3,000 in long-term capital losses against regular income. If this is your situation, you will be able to claim the full $1,000 as a tax deduction.
by CNB