Financial Beat

By Yvonne Chilik Wollenberg

Corporations: That year-end bonus may now be taxed

The US Tax Court has held that profits generated by nonshareholder physicians, but paid only to the shareholders of a C corporation, may be taxable to the PC. A six-doctor practice organized as a C corporation employed four doctor shareholders plus two associates on straight salary. At year-end, the shareholders "zeroed out" the corporation and split the money four ways as tax-deductible bonuses. The court didn't question the reasonableness of the bonus amounts. Rather, it said that a portion of the bonuses was taxable because it wasn't based on the shareholder-recipients' personal services, but on those of the salaried associates.

In addition to the corporate tax, the court assessed a 20 percent penalty for negligence, reflecting the shareholders' "utter indifference" to the possibility that the associates had actually generated part of the profits on which the bonuses were based.

Travel: Get online warnings about airport delays

You can now be alerted about delays at 39 airports nationwide via a home computer, PDA, pager, or cell phone capable of receiving e-mail. Register at www.fly.faa.gov, select the airports you're interested in, and the Federal Aviation Administration will send you an e-mail when flights are delayed. The FAA's Web site also has current conditions for 298 airports, with color codes showing the types and lengths of delays.

While the FAA's messages concern only general airport delays, several airlines—including American Airlines (www.aa.com ), Northwest Airlines (www.nwa.com), Continental Airlines (www.continental.com ), and United Airlines (www.ual.com)—will notify you by e-mail if your flight will be late. To register, check the airline's Web site.

Privacy: Online tools to help shield your identity

A new program can alert you to the presence of "Web bugs," the devices that Web sites and their advertisers use to track your online travels. The Privacy Foundation, a consumer group associated with the University of Denver, offers free Bugnosis software that warns you of a Web bug by flashing a blinking image and sounding an "uh-oh"; it cannot, however, remove the Web bug. To download the program, which works only with the Internet Explorer browser, go to www.privacyfoundation.org and click on "Bugnosis."

You can also block information from being collected by e-advertisers by filling out an online form at www.networkadvertising.org. This removes some of the "cookies," or electronic files placed on your hard drive to track your online habits, such as which sites you frequent or what merchandise you buy. The new site was launched by the seven members of the Network Advertising Initiative, which comprises a majority of the network advertising industry.

Wealth: The rich are still getting richer

The ranks of millionaires grew 3 percent from 1999 to 2000, to 7.2 million people worldwide, according to a report by Merrill Lynch and Cap Gemini Ernst & Young. Their combined wealth grew 6 percent, to $27 trillion, last year—impressive, but well below the 18 percent increase in 1999. About 57,000 of these millionaires have amassed more than $30 million, excluding real estate, an increase of 3 percent from 1999. Worldwide, these super-rich own a combined total of $8.4 trillion in assets.

About a third of the world's millionaires live in the United States and Canada, and another third live in Europe. Asia was the only region to report a decline in wealth: The combined assets of millionaires there dropped 9 percent in 2000.

Car Theft: Integra owners, take note

Car thieves apparently love the Acura Integra, which tops the most-stolen list for all 1998 to 2000 model passenger vehicles, according to the Highway Loss Data Institute. The theft frequency for the Integra was 21.6 per 1,000 vehicles per year, compared with an average of 2.6 per 1,000 for all vehicles.

After the Integra, most frequently stolen were the Cadillac Escalade, Mitsubishi Montero Sport, Lincoln Navigator, Lexus GS 400/300, Chevrolet Corvette convertible, Mercedes Benz CLK-Class, BMW 7 series, and Audi A6 Quattro.

In general, cars are getting harder to steal but more expensive to replace. The number of car thefts has been steadily declining since the early 1980s, while the amount of money paid out by insurance companies for theft claims has increased significantly.

The author is a freelance writer in Teaneck, NJ.

 

Yvonne Wollenberg. Financial Beat. Medical Economics 2001;14:12.