Today I'm going to focus on answers to a few follow-up questions you've had about recent columns and articles.
Private loans and your credit report
I read your Private Loans Won't Help Credit History column, where you told the reader that the mortgage she takes out through her uncle won't count on her credit report. But can't you get a private loan to count on your credit report if you use a service like CircleLending?
That's a great point. Even though a private loan between relatives generally won't be reported to the credit bureaus, you may be able to include the information if you set the mortgage up through a loan administration company. CircleLending, which services private loans among friends, family members and others, gives borrowers the option of reporting their loan payments to Experian and plans to expand to additional credit reporting agencies.
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The cost to set up a mortgage through CircleLending ranges between $649 for documentation alone to $999 for documentation and repayment service, including escrow. For more information about how these arrangements work, and other strategies to help when buying your first home, see Advice for First-Time Buyers.
Kiddie-Tax Law Clarified
I hope you can answer a question regarding the new kiddie-tax law. The Congress Closes Kiddie-Tax Loophole article says that it might be a good time to give children in the 18-to-23 age range appreciated stock so they can sell it at their lower capital-gains rate (which is generally 5% for long-term capital gains) before the law changes in January. But don't you have to hold the stock for more than a year to qualify for the long-term capital gains rate? I wanted to give my college-aged grandsons some stock so they'd be taxed on the gains at their 5% rate rather than my 15% rate, but they would only own it for a few months if they wanted to sell before the end of the year.
As long as the stock has appreciated in value, the holding period starts when you originally bought the stock -- not when you transferred the ownership. So as long as you bought the stock at least a year before your grandsons sell it, then they'll be taxed on the profits at their long-term capital-gains rate, even if they hold it for only a few months. The basis is also based on your original purchase price and any reinvested dividends (plus brokerage commissions).
The rules are different if the stock has lost value, but there would be no tax benefit to giving your grandsons a money-losing stock. For details about the tax rules, see Taxes on Gifts of Stock.
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Target Is the Worst S&P 500 Stock After Earnings. Here's WhyTarget stock is down big after the retailer missed expectations for its third quarter and slashed its full-year outlook. Here's what Wall Street is saying.
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Tax Credit vs. Tax Deduction: What’s the Difference?Tax Breaks Your guide to tax deductions and credits, how the IRS treats them differently, and how they impact your tax bill.
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Credit Report Error? They All Mattercredit & debt Don't dismiss a minor error. It could be the sign of something more serious.
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Insurance for a Learning Driverinsurance Adding a teen driver to your plan will raise premiums, but there are things you can do to help reduce them.
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529 Plans Aren’t Just for Kids529 Plans You don’t have to be college-age to use the money tax-free, but there are stipulations.
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When to Transfer Ownership of a Custodial Accountsavings Before your child turns 18, you should check with your broker about the account's age of majority and termination.
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Borrowers Get More Time to Repay 401(k) Loans
retirement If you leave your job while you have an outstanding 401(k) loan, Uncle Sam now gives you extra time to repay it -- thanks to the new tax law.
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When It Pays to Buy Travel Insurance
Travel Investing in travel insurance can help recover some costs when your vacation gets ruined by a natural disaster, medical emergency or other catastrophe.
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What Travel Insurance Covers When Planes Are Grounded
Travel Your travel insurance might help with some costs if your trip was delayed because of the recent grounding of Boeing 737 Max planes.
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Ways to Spend Your Flexible Spending Account Money by March 15 Deadline
spending Many workers will be hitting the drugstore in the next few days to use up leftover flexible spending account money from 2018 so they don’t lose it.
