Snowbirds, sunshine and tax on intangibles
By HELEN HUNTLEY
Published January 16, 2005
January's arrival brings more than snowbirds and sunshine to Florida. It's also the beginning of intangible personal property tax season. If that last part drew a big "huh?" you probably are not on the Florida Department of Revenue's holiday mailing list. That's a good thing.
Thousands of people fell off the intangibles tax roll last year when the state increased the exemption amount. Instead of more than a million filers, we're down to a little more than 250,000. January and February are prime filing time, because the earliest filers get a 4 percent discount. After that the discount gradually disappears leading up to the June 30 deadline.
The state tax applies to the value of investments such as stocks, bonds, mutual funds and publicly traded limited partnerships. Bank accounts and investments held in a qualified retirement plan or an individual retirement account are not taxed.
The good news is that no tax is due on the first $250,000 in taxable assets owned by a single person or $500,000 in assets held by a married couple. In addition, a return does not have to be filed if you owe less than $60. The tax rate is $1 for every $1,000 of taxable property.
If you have those kind of assets, you have to pay if you're a Florida resident. The Department of Revenue considers you one if you vote in Florida, have a Florida driver's license, claim homestead exemption or claim Florida residency on your federal income tax return.
The tax never has been particularly popular or well understood, and its rules can get pretty complex. For example, U.S. government bonds and Florida municipal bonds are exempt if you own individual bonds. If you own bonds through a mutual fund, they are taxable unless the fund is set up as a trust and at least 90 percent of its assets are tax exempt. If the fund is set up as a corporation, as most government bond funds are, it is taxable.
If you think the tax may apply to you, you can get information on the Internet (www.myflorida.com/dor) call toll-free 1-800-352-3671 or call one of the department's service centers in Clearwater (727-538-7400), Tampa (813-744-6582) or Port Richey (727 841-4407). Taxpayer seminars will be held in multiple locations.
I'm a 75-year-old with no computer. My largest investment is Cisco Systems and I'm losing money like crazy. All the CEOs on CNBC give dividends, but my company has not given shareholders 1 cent. Should I just sell and get out?
Whether you should sell any investment depends first on whether it fits with your investment objectives, and second on whether you think it has good prospects for the future. If you are looking for income, Cisco is obviously not a good fit. If you want dividends, buy a stock that already pays one instead of hoping Cisco will declare one. Analysts who follow Cisco have mixed views of the company's investment potential.
Where can I get a list of corporations that allow you to invest small amounts of money through direct stock purchase plans? I am interested in helping my grandkids get involved in investing in stocks.
You can find this information on the Internet at Web sites such as www.dripinvestor.com www.dripcentral.com and www.netstockdirect.com Or you can order a Directory of Dividend Reinvestment Plans for $11.95 plus shipping by calling Horizon Publishing toll-free at 1-800-233-5922.
Since I am now 74 years old, my financial adviser takes mandatory distributions from my IRA. How is the withdrawal amount determined?
Required IRA withdrawals are based on a life expectancy table and the amount in your IRA on Dec. 31 of the preceding year. You can see the table at www.irahelp.com or get a copy of IRS Publication 590 online (www.irs.gov) or by calling toll-free 1-800-829-3676 .
Helen Huntley writes about investing and markets for the Times. If you have a question about investments or personal finance, send it to On Money. We'll try to answer those we think are of greatest reader interest. All questions must be submitted in writing, but readers' names will not be published. Send questions to huntley@sptimes.com or Helen Huntley, Times, P.O. Box 1121, St. Petersburg, FL 33731.