Safeguard your financial data
The Better Business Bureau has reported that nearly 90 percent of all known cases of identity theft are the result of “offline” activity, such as criminals stealing wallets or finding trash that contains personal information. Safeguarding your identity, therefore, involves more than just being careful online.
Shred all documents that contain key financial data, including any mail that solicits you for new credit cards, loans or insurance policies. An identity thief who finds a credit application – particularly one that guarantees acceptance – has everything necessary to ruin your credit. Likewise, remove unused credit cards from your wallet (along with receipts and ATM statements that have account information) and carry only those items that are essential to your daily life.
Phantom gains
As many investors learned during the bear market, phantom gains are capital gains on which the investor owes taxes, even if the actual investment return for the year is negative.
For example, if a mutual fund sells a stock that has increased in price, the shareholders of the fund are liable for taxes due on the gain; a fund accumulates gains, subtracts any losses and then distributes any remaining trading profits or investment income to shareholders. A fund may see its share price decline but still make a distribution during the year, creating a phantom-gain situation.
The shareholder owes taxes on gains made when the fund rises too, but because the fund is up, the gains and taxes are not so difficult to stomach as in a phantom situation.
