Loan from a Stranger

You might consider peer to peer lending as a way to get rid of those huge credit card debts.

Two companies that could be of assistance are “Prosper” and “Lending Club.” The borrower gets a lower interest rate to pay off those high rate credit cards. Rates are set based on your credit scores, but, in general are below 12% for card consolidation loans.

For loans of $1,000 to $35,000 you will need a credit score of 640 (Prosper) to 660 (Lending Club) or higher to qualify. There are origination fees based on your credit score. Excellent credit could get you at 7% rate with a 1% fee. Good credit is a 15% rate with a 3-4% fee.

This may or may not be for you. Check it out.

IRA Rollover Goofs to Avoid

Most people feel doing an IRA Rollover or distribution is simple. Instead there are thousands of pages of rules and regulations. Here is an excerpt from one such case.

A taxpayer wanted to buy an investment property with the proceeds from two old IRAs and place it in his self-directed IRA. Even with his financial team in place, the attempted rollover failed three different IRA rules:
• It violated the once-per-year IRA rollover rule.
• It violated the same-property rollover rule.
• It missed the 60-day rollover deadline.

How do these mistakes happen, and how can they be prevented?

This case is dated from Feb. 1 to Feb. 6, 2013, when the taxpayer took distributions from two former IRA that he used to buy the investment property. This was his first failure; because of the once-per-year rollover rule, only one of the IRAs was eligible for rollover.

He went on to make matters worse by using the money from his IRA distributions to buy the investment property outside of his IRA.

He intended to put the property in the IRA, completing what he thought would be a 60-day rollover. But his method violated the same-property rollover rule, which holds that tax payers must roll over the same property that was distributed. You cannot distribute cash from the IRA, and then roll over real estate back to an IRA.

The taxpayer also missed the 60-day rollover because neither he nor his alleged expert team realized that his investment property had not yet been placed into his IRA.

But again, timing wasn’t the only issue. Even if this taxpayer had moved the investment property back into an IRA within the 60-day window, it still would not have been a valid rollover.

In fact, had he completed such a transaction, the tax consequences of doing so would have been even more severe than what he already faces.

The reason stems from that same- property rule. For IRA-to-IRA rollovers, including those going from Roth IRAs to Roth IRAs, the property distributed from the original account must be the same property contributed to the receiving account. These rules also apply to SIMPLE and SEP IRAs.

If cash is distributed from an IRA, as in this case, then cash must be rolled over within 60 days.

The same-property rule extends beyond cash. If a person takes an IRA distribution of property other than cash, the same property must be put back into a retirement account in a timely manner if the person wants to complete a valid rollover.

Individuals also cannot receive an IRA distribution of 100 shares of ABC stock worth $20,000 and roll over $20,000 of XYZ stock — because it’s not the same property that was distributed from the IRA.

There is an exception to the same-property rule for rollovers distributed from a company retirement plan, such as a 401(k). In this case, recipients have a choice: They can either roll over the same property to an IRA or they can sell the property distributed from the plan and roll over the cash proceeds from the sale.

Get help when doing anything with a Government Sponsored Qualified Plan.

College Aid

By springtime most college bound students have made their school selection and are finalizing their financial aid package.

You may be sending one child off to school this fall but what about the younger ones still in the house?

Is it never too early to start planning for the next college bound students (true most Americans procrastinate until the last minute).

Here is some information that may be helpful.

Filing the Free Application for Federal Student Aid (Fafsa)—preferably, as soon as possible after January 1—is necessary to be considered for financial aid from federal and state government and from most colleges and universities. This includes grants, loans and, even, sometimes, merit-based aid.

Although the federal deadline for filing the Fafsa for the 2015-16 academic year isn’t until June 30, 2016, many states and schools have deadlines in early 2015 and some award aid on a first-come, first-served basis, says noted financial aid expert Mark Kantrowitz, co-author of the book Filing the Fafsa and senior vice president and publisher of Edvisors.com, a website focused on planning and paying for college.

Even families who think they are too wealthy to qualify for free or subsidized aid or who were previously turned down should file the Fafsa. According to the 2011-12 National Postsecondary Student Aid Study (Npsas), 11.3% of students whose parents earned $100,000 or more received need-based grants from their colleges and 18.9% received non-need and merit-based grants.

To be sure, the Fafsa, which requires over 100 data elements and takes an hour to complete, is intimidating to families, he says. Kantrowitz states: “The sad thing is, I wrote a 250-page book to help people complete a six-page form.” “That shows you how complicated it is.” The book is downloadable for free in PDF format at Edvisors.com. It is also available for purchase in paperback and Kindle formats at Amazon.com.

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Extra Tip:

Save time and money with TripIt (tripit.com). The free app organizes your travel plans and give updates on flight changes.

Finding Missing Money

I found another site to uncover if you have money owed to you. This can be from old bank accounts or from vendors such as cable companies, water deposits, or apartments etc.

Contact: Missingmoney.com

If you do find some money why not give one half (50%) to a special charity. You never had this money to begin with anyway, so why not? Also, the contribution will be deductible on your income taxes so it is a double bonus for you.

Good hunting!

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Extra Tip:

Extend the life of your smartphone or tablet battery. Protect your device from temperatures above 95 degrees, which can damage battery capacity; shut down location-tracking apps when not using them; and turn off the function that refreshes apps in the background.

How Arthur Laffer Would End Trade Warfare

Laffer argues that currency manipulation is as much an obstacle to free trade as tariffs and protectionist regulations. Politicians promote currency devaluation in the mistaken belief that it will boost their country’s economy through increased exports. In fact, he argues, their subsidization of exports causes long-term economic damage. This, he argues, is why Japan’s stock market valuation nowadays is only 7% of the world’s total, versus 42% in 1988.

So why do countries keep doing it? When he was asked Laffer, who is as driven as a preacher, the partisan hackles rose on his neck. “Ask yourself about Obama! Why does he keep doing what is silly? Whoever heard of a poor man spending himself into wealth? It’s dumb. But we try stimulus spending all of the time. Whoever heard of an economy being taxed into prosperity? The only place you can find this is among professors at Princeton. It’s crazy!” says the Stanford University Ph.D.
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Extra Tip:

Use GasBuddy. The mobile app helps you find the cheapest gas in the area.