THE ECONOMY: SEVEN INDICATORS - From CNN Money (as of 2/02/05)

The indicator	What it's telling us	Next update
Consumer Confidence	Rebounding Growth	February 22
Retail sales	Growth on Track	March 15
Leading Economic Indicators	Rebounding Growth	February 17
Manufacturing Activity (ISM)	Growth Slower Tthan Forecast	March 1
Industrial Production	Rebounding Growth	February 16
Jobs Growth	Moderate Growth	March 4
Inflation (CPI)	Inflation Threat Surfacing	February 23

Family Protection Act Includes CARE Proposals
On January 24, Senate Finance Committee member Rick Santorum, R-Pa., introduced S. 6, the Family and Community Protection Act of 2005, which would provide permanent family tax relief, incorporate the CARE Act which would enhance incentives for charitable giving, and improve block grant programs to better assist needy families. Two of the changes proposed by this legislation are a deduction for a portion of charitable contributions to be allowed to individuals who do not itemize deductions and tax-free distributions from individual retirement accounts for charitable purposes.
Planned Giving Design Center 2/04/05

Social Security General Information
Washington Post 2/24/05 President Bush's push to restructure Social Security has thrust private investment accounts to the front of the political debate, but dozens of alternative approaches to Social Security's problems have been proposed -- and many of them are receiving a second look as Congress grapples with the issue.
At its heart, Social Security's future financial shortfall is a basic math problem: The benefits owed over the next 75 years are $3.7 trillion greater than what it will have collected to make those payments. But how economists propose to solve that problem has had more to do with their vision of the nation's largest social insurance system than mathematics.
A straightforward solution could be to raise the current payroll tax by less than 2 percentage points or cut benefits by 13 percent. Either would solve the problem through 2080. Similarly, if the limit on wages taxed for Social Security, currently $90,000, were lifted altogether, the system would be kept fully solvent until 2077, according to the Social Security Administration's chief actuary.
But out of political pragmatism, those who hope to preserve a basic structure established by Franklin D. Roosevelt -- mainly Democrats -- have obscured both tax increases and benefit cuts, using a variety of mechanisms that make the proposals remarkably complex. Even with such tactics, the Democratic proposals have yet to catch fire among politicians, who fear that the most head-on approach would be the most politically treacherous.
NY Times 2/16/05 - Federal Reserve Chairman Alan Greenspan repeated his call to Congress to take action to shore up the massive entitlement programs of Social Security and Medicare. Those programs face huge financial strains with the looming retirement of 78 million baby boomers in 2008. "Benefits promised to a burgeoning retirement-age population under mandatory entitlement programs, most notably Social Security and Medicare, threaten to strain the resources of the working-age population in the years ahead,'' Greenspan said. ``Real progress on these issues will unavoidably entail many difficult choices. But the demographics are inexorable and call for action,'' he added.
USA Today 2/9/05 - Most Americans are willing to endorse painful steps to ensure Social Security's long-term solvency - steps that nick the rich, that is. Two-thirds of those surveyed by USA TODAY/CNN/Gallup last weekend say it would be a "good idea" to limit retirement benefits for the wealthy and to subject all wages to payroll taxes. Now, annual earnings above $90,000 aren't taxed. But some ideas that President Bush said in his State of the Union address were on the table for consideration are rejected by solid majorities. By more than 2 to 1, Americans oppose reducing retirement benefits for those now under age 55. Nearly as many say it's a bad idea to raise the retirement age, and 57% are against reducing benefits for early retirees. Six in 10 oppose raising Social Security taxes for everybody, a step Bush has ruled out.
White House - 2/07/05 The White House released more details about the proposed Social Security Reform. The White House notes that there would not be changes for persons age 55 and older (born before 1950). The 45 million Americans currently receiving benefits will not see their benefits change in any way. The personal accounts would be voluntary. A person could choose to stay in the regular Social Security system, with the possibility of receiving lower future benefits, or select the personal account.

Stranger Owned Life Insurance Policies (SOLI) Effectively Prohibited
Under state law, it is necessary to have an insurable interest to purchase insurance on an individual. Governments believe that insurance is intended to be purchased for the protection of family members, for business purposes or other key person reasons. It is generally believed that allowing insurance purchases by investors on unrelated individuals could lead to abuses. Therefore, stranger-owned life insurance (SOLI) is not permitted under state law.
In the Fiscal Year 2006 Revenue Proposals of the Bush Administration, there is a proposed provision that will effectively eliminate this version of SOLI as of February 8, 2005. The proposed provision would create an excise tax of 25% on the death benefit if a charity has owned the contract and transferred it to a private individual or other entity who does not have an insurable interest. In essence, the 25% tax on the proceeds will eliminate any potential for investors to produce a reasonable return, and charitable SOLI policies will experience a quick death.
GiftLaw 2/14/05

IRS Publishes Car Donation Guide
The American Jobs Creation Act of 2004 changed the rules on gifts of cars and other vehicles. The new rules apply to gifts on or after January 1, 2005. The rules create two new ways to take a charitable deduction for gifts of cars valued at over $500.

In IRS Publication 4303, the two rules are stated. They are as follows:

For cars valued over $500, the charity must give a written acknowledgement to the donor. It needs to include the name of the donor, his or her Social Security number, the vehicle identification number, and the gross proceeds from the sale. However, if the charity is going to use the vehicle, the statement must indicate the duration of the use. Finally, if the charity plans to make a material improvement, the acknowledgement must describe the material improvement and indicate that the charity will not sell before completing the improvement.

This report is due to the donor within 30 days of the sale of the car. If the charity plans to use or materially improve the car, then the acknowledgement is due within 30 days of the date of the gift. For gifts that qualify for fair market value deduction because the charity is using the vehicle, that deduction must reflect both the book value for the vehicle and an adjustment for the condition of the vehicle.

Several potential forms may be involved. If the vehicle is worth more than $250, then a receipt from the charity with the "no goods or services in exchange for the car" statement is required. For vehicles valued at $500, the new acknowledgement by the charity is required with either the gross sale proceeds or the description of use or improvement, if either applies.

When filing Form 1040, if the gift value is greater than $500, then Section A of Form 8283 must be included. If the gift is over $5,000, then an appraisal by an independent appraiser is required.
Giftlaw 1/30/2004