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Jewish World Review August 4, 2000 /3 Menachem-Av, 5760

Bruce Williams

Bruce Williams
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Consumer Reports

Time to take on the airlines -- DEAR BRUCE: I have a 401(k) with a former employer, and my current employer offers a 401(k) as well. Is it possible to have my funds go into the first 401(k), rather than into this company's? -- S.K., via e-mail

DEAR S.K.: No. I know of no circumstance where you can elect to have your 401(k) go to a former employer. In the event that you leave this employer, then it may be possible to have that money rolled over into a self-directed account or into the 401(k) plan offered by a new employer. As long as you are with the employer, your 401(k) must stay with them.

DEAR BRUCE: My wife and I own a two-family house. We bought it in 1972 and lived in one half, and we have always rented out the other. Today the house is worth about $170,000. If we sell it, will we still have to pay tax on it, or is the sale exempt up to $250,000? -- E.M. Lecanto, Florida

DEAR E.M.: The portion of the building that you live in was your primary residence and is not subject to tax. The portion that you are renting out will be subject to tax. It's likely that it has been depreciated down to next to nothing. Your accountant can show you how this works.

Assuming that the apartments are of equal size and value, then you will only pay profit on half of the amount received for the house, minus your base deductions and adding in any depreciation that has to be recaptured.

DEAR READERS: It has come to my attention that the airlines enforce some very, very unfair rules. The problem is that you don't have a choice but to follow them because the airlines are all, possibly with one exception, in lock-step.

It is their position that if you buy an airplane ticket, only you can use it. It cannot be traded, bartered or sold. Only you can be in that seat.

It is my contention that when you buy a ticket, you should be able to do with it what you wish. You should be able to give it to someone, trade it to someone or use it yourself in part or in whole. The airlines should allow a ticket to be used by anyone who has it in their possession. The airlines can and should ask that a new name be put into their computer and the old name be taken out.

Similarly, sometimes it's cheaper to fly out of a smaller city than the city that is the airline's hub. If you discover this, you have found the loophole of what the airlines call a hidden city and you should be able to make your reservations out of the cheaper city if you wish and then, on the trip back, deplane in the airline's hub if it is closer to your home. The airlines go ballistic if someone tries this.

Finally back-to-back ticketing, which the airlines abhor, simply means that if you plan short trips (two-day business trips, for instance), it is often cheaper to buy round-trip tickets reflecting a "Saturday stay" (and therefore cheaper) and then use the flight out from one ticket and the flight back from another ticket on the two legs of the two-day trips. There are times, too, when it is cheaper to buy a round-trip ticket when you are only planning on going one way.

If you can find these ways to save money on the cost of flying, I see no reason why they can't be exploited, and yet the airlines have fought against their customers' taking advantage of these situations, and have even required additional payment or refused further ticketing when it was discovered that customers had gone against the rules.

Nowhere else in our society do we have this situation. If a hamburger and coke are $1.95, and the kids meal is $1.50 and consists of a hamburger, coke and french fries, it is very unlikely that a manager will come out and thrust the french fries into your mouth if you take advantage of the sale. So why should travelers have to use both parts of a more-economical round-trip ticket?

It's the same as when people cherry-pick in stores. If they buy only what is on sale, this is not what the merchant intended. However, shoppers have an absolute right to do that. Or when someone pays off a credit card on a regular basis and does not pay any interest charges, the credit card company is distinctly unhappy. Despite this, they continue to allow you to have a credit card, as they should. You found a way to beat their system.

Congressman Jim Gibbons of Nevada has agreed to draft legislation to help change the airlines' rules, and I'm asking my readers and listeners to support this by contacting their representatives and senators. Simply say that this is a deal-breaker, that unless they support this type of legislation, in no way can they be supported in their election efforts.

This is not a partisan issue but a people issue. It is intended to end airline tyranny. I sincerely ask all of my readers to enter into this effort. It is in your collective best interest. Your comments are sincerely invited; I will print a representative number of your letters reflecting both sides of this issue.

Send your questions to JWR contributor Bruce Williams by clicking here. (Questions of general interest will be answered in future columns. Owing to the volume of mail, personal replies cannot be provided.) Interested in buying or selling a house? Let Bruce Williams' "House Smart" be your guide. (Sales of the book help fund JWR).


08/02/00: How can I retire at 62?
08/01/00: Cash in your savings bonds
07/28/00: Hold onto a mortgage under 7 percent
07/26/00: I want my partner to buy me out
07/25/00: Negotiate with your neighbor
07/21/00: How can I finally start saving soundly?
07/20/00: Where's my prize?
07/18/00: Getting out of an upside-down loan
07/13/00: Death is no escape
07/12/00: Multiplying dollars
07/10/00: Making sense of retirement investing
07/07/00: 'Bankruptcy does follow us around'
07/06/00: In which state should I file my income tax?
07/03/00: When to diversify assets
06/30/00: I'm buying my dad's house
06/29/00: How social security seniors should invest
06/27/00: Waiting before re-establishing credit
06/21/00: Insuring an older car
06/19/00: Take the money and run!
06/16/00: Utility company incursion
06/15/00: Insurance settlement is no bargain
06/13/00: A straightforward form of bankruptcy
06/08/00: In the computer's clutches
06/07/00: The trouble with tenants
06/05/00: Do I really need title insurance?
06/01/00: The truth about nursing home insurance
05/30/00: Keep mother-daughter loan simple
05/25/00: CDs for security, not investment
05/24/00: Battling with collection agency
05/22/00: Are callable CDs a waste of time?
05/18/00: Building a college fund
05/16/00: Even death brings no relief
05/15/00: House is 'worth' what's offered
05/12/00: Borrow from Mom and Dad?
05/11/00: Your heirs, your choice
05/09/00: Mutual-fund investigations
05/05/00: Credit cards vs. debit cards
05/04/00: Lawyer are good for something
05/03/00: The binding nature of contracts
05/02/00: You know you are in trouble when ...
05/01/00: Can primary residence be rented out?
04/28/00: A full refund after five years?
04/25/00: Get a homeowner's title policy!
04/24/00: Beware of errors in your favor
04/18/00: $10,000 limit on gifts
04/17/00: Invest or repay student loans?
04/13/00: Beware of Internet auctions
04/11/00: Six percent is a pittance
04/10/00: Married couples should share windfall
04/07/00: How not to blow an inheritance
04/06/00: Get genetic screening for Tay-Sachs
04/05/00: Beating the look-back period
04/04/00: Providing for retirement
04/03/00: Readers disagree on time shares
03/30/00: The road back to good credit
03/29/00: Pre-tax dollars in IRA taxed later
03/27/00: Gambling on business ventures
03/22/00: Old cars as hobby, not investment
03/20/00: Tax on foreign gifts?
03/16/00: How to buy government bonds
03/13/00: Buying treasury instruments
03/09/00: Subcontractors must pay S.S.
03/08/00: Real-estate lawyers are essential
03/07/00: Don't expect compensation for ideas
03/06/00: Too rich for a Roth IRA?
03/01/00: Is time-sharing a scam?
02/29/00: Paying for nursing-home care
02/28/00: Rely on a real-estate lawyer
02/23/00: Keeping child's money safe from divorce
02/16/00: Just how important is a 401(k)?
02/14/00: Shaky partnership buying house
02/11/00: Protection by residential zoning
02/09/00: Benefiting from a reverse mortgage
02/07/00: Ensure your insurability
02/04/00: Absurd community zoning laws
02/02/00: Money or securities?
02/01/00: Can we KO a custodian?
01/31/00: Why sell a home you love?
01/26/00: Everyone needs a will
01/25/00: Will splitting stocks affect rollover?
01/24/00: Should early retirees contribute to SEP?
01/21/00: Strategies for paying off debt
01/20/00: Is 15-percent growth achievable?
01/19/00: Selling a second home
01/18/00: Running from a time-share
01/14/00: Don't be a spendthrift!
01/13/00: Who gets the house?
01/11/00: It all depends on size of estate
01/06/00: Check references before hiring an advisor
01/04/00: Savings bonds a bad investment
12/31/99: Out of state ain't that great
12/29/99: Warranty rip-offs
12/27/99: Checking up on investment handlers
12/23/99: Options good only when company's strong
12/20/99: Capital gains tax sometimes best
12/17/99: Don't give up your nest egg
12/15/99: Small-claims court no panacea
12/13/99: Termite company not liable for termites?
12/10/99: Services provided must be paid for
12/06/99: How do we minimize house-sale gain?
12/06/99: Maximize your tax shelter!
12/02/99: My neighbor won't maintain even a modicum of civility
12/01/99: Long-distance rentals a bad idea
11/29/99: Mortgage strategy A-OK
11/18/99: Students can work and learn
11/16/99: Value is what will sell
11/11/99: Y2K: No big deal for real estate
11/08/99: Real life is tough luck
11/03/99: The right time to cash a savings bond
11/01/99: Slow road for savings accounts
10/29/99: What do you want from insurance?
10/27/99: You have a right to see your tax forms!
10/25/99: Why own a house at 65?
10/22/99: Online fine, but CDs?
10/20/99: Love, honor -- and separate credit
10/18/99: Find the value of your stocks
10/15/99: Property lien prevents trade
10/13/99: Clear up debt, only then tie the knot
10/11/99: If it ain't broke...
10/04/99: Should I stick with the company IRA?
10/04/99: Get a financial education!
10/01/99: Insurance: Not much one person can do
09/30/99: Lost tickets are lost cash
09/29/99: Trusting only one financial planner
09/27/99: Adult children should help out
09/24/99: Tips for first-time home buyers
09/21/99: Use the rule of 72s!
09/17/99: Legal strategy can be a pain
09/15/99: Teen drivers drive up insurance
09/13/99: Always use an attorney!
09/10/99: Whose taxes are they, anyway?
09/08/99: How do I roll over my 401(k)?
09/03/99: How can I work out my IRS payments?
09/01/99: When your company can't pay you
08/30/99: Beware of shady viatical investments
08/26/99: Landlords vary on security deposits
08/25/99: Educational IRAs must be spent on education
08/23/99: Finding out the value of old stocks
08/20/99: How to get an FHA refund
08/19/99: 100 percent financing is a scam
08/16/99: Will I have to pay a capital gains tax?
08/16/99: Thinking about PMI
08/13/99: Short-term mutual funds a-OK
08/11/99: It's your job to shop around
08/10/99: Sometimes, roots need to be uprooted
08/09/99: 'Pre-approved' doesn't mean a thing
08/06/99: Only you can determine your investments
08/04/99: Bank IRA the lowest-risk option
08/03/99: Reverse mortgages good for the elderly
08/02/99: Get the survey BEFORE you buy the house!
07/28/99: Get a lawyer -- it's worth it!
07/27/99: If it ain't broke...

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