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W — MANCHESTER HERALD. Thuraday. July 16, 1987 Social SBCurtty ^ ■ ' ~ T — Eariy lump-sMm payment She can Hydrants: Wittenzellner says he’ll try / page 3 i|l wild West- Poke get m ore makes retirement "winner* W around cattle town My mall from G rand: Mattingly leads Yanks to win / page 15 for fun / page 11 you underlines payout from the retirement plan— benefits that one area $100,000 cash and $100,000 In efh- that seems to be ployer stock. ’The plan paid $20,080 \£:% \ for the stock when it acquired the QUESTION: My father-in-law bothering you Juat died. Both he and my mother- stock. most about the in-law were receiving Social Secur­ Sylvia tax law is the ity benefita on their own record. This is her tax-saving result, retirement plan. Since ahe waa receiving leaa than he \ the totnl $200,000, only $130,800 is I already have Porter waa, can ahe get more aa hia subject to regular tax in 1987 — the highlighted 1 widow? $100,800 cash and the $20,000 eqiial some of the to the plan’s basis for the sto<^. problems and % 1 ANSWER: Yea, aa long aa her Smith also owes a penalty tax of solutions involv­ widow'a benefit ia higher than her $12,000 (10 percent of 8120,000). But ing early wiUidrawals from retire­ retirement benefit. She ahould not portlota of the payout equal to the she owes no regular tax and no ment plans. Now, below are details delay contracting the Social Secur­ plan’s tax basis for the stock is penalty tax on the remaining on one area which can be an $80,000. Manchester — A City ol Village Charm ity office. She can apply for both her currently taxable to the plan iMaurtetrr HrralJi all-around winner for you; an early widow’a benefit and the lump-sum member. lump-sum payment from a retire­ Smith turns around and sells the death payment by calling the Social And the chances are overwhelm­ ment plan. ing today that the plan’s tax basis stock in late 1087 for $100,000. She Security office, llie personnel there It’s as simple as this; Where therefore must pay regular tax oh will take the necessary information for the stock is a small fraction of its practicable, take your lump-sum current value — in other words, the the $80,000 in 1987 — but she still 30 Cents by phone and then will arrange to payout in a big chunk of your owes no penalty tax. The penalty complete the application by mail. tax on the portion attributable to employer’s own stock. the stock’s appreciation in value tax is applied only to distributions. Some retirement plans allow you while in the plan is postponed. You Smith’s use of the payout-in-sto<^ QUESTION: I had to he hospital- to take part or all of your payout in don’t pay this tax until you sell the strategy saved her M,000 in penalty iaed for a week recently and the stock of your employer. Undera decided I would be more comforta­ stock. taxes. ’This was well worth the Nofziger faces ethics indictment long-staning provision of the tax Be alert: Under the new law, a slight market risk of holding tRe ble if I stayed in a private room. law, a stock payout allows you to Except for the hospital insurance plan member generally owes a stock a short time until it could be By Pete Yost defer a big portion of the income tax sions that prohibit high government executives have pleaded guilty to deductible, Medicare paid for most penalty tax, in addition to the sold. The Associated Press now reorganizing under federal contract. that would otherwise be due. You regular income tax, on a distribu­ officials from lobbying their former bribing public officials in exchange of the expenses I had in the hospital bankruptcy laws. • That Nofziger lobbied illegally don’t own or pay income until you Another break: the taxable profit office for one year after leaving the for help in winning no-bid Pentagon but it didn’t cover the full charge for tion received before age 59Vi WASHINGTON — Former White The indictment announced today on behalf of the National Marine sell the stock. Now the giant Tax on the sale of the company stock js public payroll. contracts and other favors. the private room. I don’t under­ (absent death or disability). The. House political director Lyn Nof­ alleges; Engineers Beneficial Association, Reform Act gives stock payouts penalty is equal to 10 percent of the long-term capital gain, regardless Bragg is charged in the indict­ Law enforcement officials have stand why it only paid part of the ziger was indicted on six counts of • That Nofziger illegally con­ a Washington-based labor union still another big advantage. distribution that is currently of how long you have held the stock. ment with aiding and abetting said they expect additional indict­ charge for my room. violating federal ethics laws in tacted Secretary of the Army John representing licensed maritime Here’s the new break: Not only taxable. And, for 1987, the top tax on Nofziger in his efforts to assist ments in New York of as many as 10 connection with his lobbying for Wedtech. Marsh Jr. on March 29, 1982, two officers and violated the law when can you defer the regular tax, but A payout In employer stock is a long-term gain is 28 percent, even other government officials for ANSWER: Under most circum­ Wedtech Corp. and two other months after Nofziger left the he lobbied on behalf of Fairchild you also can avoid the new penalty though the regular tax rate may be Nofziger left the White House in allegedly taking payoffs from stances, Medicare hospital insu­ giant escape hatch. Since the clients, an independent counsel government, on behalf of Wedtech tax. You are not hit by the part of as high as S8>A percent. January 1982, to open a Washington Wedtech. Republic Corp., a Virginia-based rance can cover the cost of a private appreciation on a stock payout is announced today. in the company’s efforts to win the defense contractor. the payout in stock that is not not currently taxed, it’s not subject lobbying firm with Bragg. Among the others who have been room only if the patient’s physician ’The moral of this story is that According to the indictment, $32 million contract to build small The indictment says Nofziger currently taxable. Taxpayers who to the 10 percent penalty! And The indictment was obtained by indicted are Rep. Mario Biaggi, certifies that a private room is there are different ways to handle Nofziger and his lobbying partner, gasoline engines fo- the Army, illegally lobbied the White House on receive a plan payout before they that’s a real winner. independent counsel James D-N.Y., accused by a federal grand medically necessary for the pa­ Herald photo by Pinto things for maximum tax benefit. Mark Bragg, who also was indicted, • That Nofziger illegally con­ behalf of the marine engineers ore age 59Vi generally are hit with For instance, Mrs. Smith, age 50, McKay, who also is investigating jury in Manhattan last month of tient’s health or the health of others One more example: If Mrs. Smith’s illegally lobbied the White House in tacted Small Business Administra­ union in 1982, writing a letter to this new penalty. So the payout-in- is retiring from her full-time job Attorney General Edwin Meese extorting $3.6 million worth of stock who would be exposed to the patient company doesn’t have a stock plan, 1982 in an ultimately successful tion chief James Sanders on May 3, Jenkins. Nofziger was seeking to stock strategy is a gilt-eidged way this year. The plan gives her a Ill's assistance to Wedtech in 1982 from Wedtech by threatening to in a semi-private room. Medicare Happy moment she may decide on an annuity over effort to get a $32 million no-bid 1982, on behalf of Wedtech. Nofziger expand the use of civilian crews for early retirees to get more choice. She can take the payout all when Meese was White House withdraw nis support for the hospital could only pay the semi­ her lifetime. Result: Again, no Pentagon contract for Wedtech, a also broke the law, according to the aboard U.S. government ships, an after-tax dollars out of their retire­ in cash or half in cash and half in counselor. company’s efforts to win govern­ private rate for each day of your Pamela Bayer accepts a 8cholars)tip from Lillian Grant as penalty tax. New York defense contractor. indictment, when he wrote a letter initiative that had been endorsed by ment plans. LYN NOFZIGER Meese has acknowledged in­ ment contracts. He has denied any hospital stay. Michael W. Crockett looks on. *fhe Manchester Board of employer stock. Her first instinct is The indictment says Nofziger to Meese’s deputy, James Jenkins, President Reagan. Background: As a general rule, a to get as much cash as possible. But Once again, as all my recent . illegal lobbying? terceding in 1982 on behalf of wrongdoing. violated conflict-of-interest provi­ Wedtech, four of whose top business on May 28, 1982, seeking White Realtors, of which Crockett Is president, set up the plan member owes tax on his entire after some consultation, she makes columns have been emphasizing, The Bronx defense contractor is House help in obtaining the engine QUESTION: I am a widow with payout in the year he receives it.

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