Tax Answers

February 15, 1994

Here are answers from members of the Maryland Association of Certified Public Accountants to readers' tax questions. The Sun will publish answers through April 15.

Q: I'm a retired senior citizen, and I have not filed a return in the last two years because most of my life's savings is in tax-deferred annuities. I let myself be talked into buying future options. I have a loss of about $3,000. Can I register a loss when I do not have enough taxable income to file a return?

A: It's probably not worth the trouble. This is a complex situation, and you will most likely not benefit financially. Although you can file a return this year to establish the capital loss, any carry-over of the loss for future tax returns may be reduced. On page D-4 of the instructions to Form 1040, there is a work sheet that will help you calculate the capital loss carry-over available for next year.

Q: I purchased some utility stocks in the 1980s as part of a dividend reinvestment plan. Now I seem to have lost the amount of the dividends for 1980-85. How can I reconstruct my dividends?

A: It is not that difficult to determine the dividend history for the majority of stocks. Stockbrokers have the resources to research stock dividends. Or you can go to a library and look through the Moody's or Standard and Poor's directories which list all publicly traded stocks and their dividend history. You, as the taxpayer, are responsible for showing your cost basis to the IRS.

The above advice is for general purposes only and is not intended as legal, accounting or tax advice. Specific situations may vary. Consult with a tax adviser for specific advice.

Readers may submit questions by phone, mail or fax. Selected questions will be answered in The Sun and The Evening Sun.

To ask a tax question by phone, call Sundial, The Sun's telephone information service, at (410) 783-1800. In Anne Arundel County call 268-7736, in Harford County 836-5028, and in Carroll County 848-0338. Using a touch-tone phone, enter 6120 after the greeting.

Written queries may be sent to TAX QUESTIONS, The Baltimore Sun, Business News Department, 501 N. Calvert St., Baltimore 21278. Fax questions to the Business News Department at (410) 783-2517. Names and numbers will not be published.

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