Ziese & Associates, Ltd.

Robert J. Ziese, Esq.

Kathryn G. Ziese Financial Services

Client Newsletter - Jan. - Mar. 2001

Enough Snow!!       We Want Spring !!

Call us for real estate, wills & trusts, tax & bankruptcy issues, business startup & litigation, matrimonial, and non-profit organization matters


Tax News

New NJ Drivers License For 17-Year Olds

Variable Life Insurance Policies - In a Bear Market, They Could Lapse and Create a Tax Bill

Intelligent Trash Cans

Dad Gets Net Visitation Rights




The IRS has changed its mind regarding the issue of requiring that
Employee Stock Option Purchases be considered payment of "wages" when
exercised, thereby causing FICA and Federal Withholding to be taken out
of the payment. The IRS now says that the exercise of ESPP options and
incentive stock options (ISO's) before 2003 is not subject to FICA or
income tax withholding. This new position will create amended returns
with refund claims that have paid FICA tax on these exercises. If you
have exercised any ESPP or ISO stock purchases in the last three years,
please be sure to tell your tax professional when having your 2000
income tax prepared. Amended returns can be done for 3 years (1997,
1998, 1999) provided they are completed before April 15, 2001.

New NJ Driver's License For 17-Year Olds

New Jersey now has a "graduated license system" for young drivers. People born after 1984 are eligible for full driver privileges only when they reach 18 years of age. Seventeen- year olds will get a license that:

For more information, visit, http://www.state.nj.us/mvs/gdl/index.html

Variable Life Insurance Policies - In a Bear Market, They Could Lapse and Create a Tax Bill  

Variable life insurance policies have been popular since the 1980's. These insurance policies let you select the investments for your premium dollars. Most people select a mutual fund. The premiums are invested in that mutual fund and the earnings are used to pay the next premium. In a bull stock market, the earnings usually cover the premium. You win and the insurance company wins because you are carrying the investment risk.

In a downturn however, the earnings may not cover the premium for that year. The insurance company then sends you a bill for the life insurance premium balance. If you can't afford the premium, you can borrow against the accrued cash value of the policy earnings or let the policy lapse.

The tax trap occurs if the policyholder borrows against the cash value of the policy. Many policies were sold as vehicles for retirement. If the policy lapses for non-payment of premiums, any loans taken to pay the premiums and any loans taken for other reasons are considered income- and taxable as such by the IRS.

    Intelligent Garbage Cans  

Barcelona, Spain, is embedding tiny chips in trash cans, which communicate how full is the can. That way, sanitation workers only have to stop at cans that need to be emptied, saving time and money. 

Also, Belgium and the Netherlands have such trash cans. But they are used a bit differently. The trash truck weighs each can while emptying it, [while the chip identifies the can.] At the end of the year, everybody pays only for the service used. This encourages people to recycle because paper and other sorted trash is removed separately, for free.

     Dad Gets Net Visitation Rights

A New Jersey Appeals Court said a divorced woman can move with her daughter to California and rely on the Internet to help the girl keep in touch with her father back in New Jersey. The ruling appears to be the first of its kind in the US. Mom will build a website with video capability and provide a "creative and innovative way" for Dad and daughter to keep in touch. 



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