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DEBRA WHITEFIELD / Money Talk

Social Security Numbers by Mail

November 21, 1987|DEBRA WHITEFIELD

QUESTION: You said in a recent column that the IRS now requires children to have a Social Security number. Do I have to go to a Social Security office to get one for my 6-year-old? Or is there any easier way?--H. U.

ANSWER: You can do it by mail if you prefer. Pick up an application--Form SS-5--from your local Social Security office or have them send you one. Fill it out, attach a copy of your child's birth certificate or hospital record of birth and proof of your relationship to the child and send it all in.

You have to prove your identity because you are applying on behalf of your child. A driver's license, U.S. passport, voter registration card or record of military service are all acceptable.

From this year on, anyone 5 or older must have a Social Security number--regardless of whether he or she is employed. Hoping to crack down on tax cheats who claim deductions for children they don't have, the IRS now requires parents to list their children's Social Security number on their tax return. Children who file returns also must cite their parents' Social Security numbers.

Q: My husband and I are building a house. Our mortgage company has offered to add the "points" on the construction loan to the mortgage so we don't have to pay cash. Is that a good idea?--J. N.

A: It's a great idea if you don't have the cash to pay the points--loan origination fees that are sometimes charged by lenders to sweeten their deal without raising interest rates. But if you do have the cash, you might be better off in the long run to pay the points up front. That way, your interest expenses will be less over the life of the loan and you can deduct all of the points in the year you take them--instead of amortizing them over the life of the loan, which would be the case if you include them in the mortgage.

Say you pay $3,000 in points this year. All $3,000 would be deductible on your 1987 tax return. But if you add the $3,000 to your 30-year mortgage, you could deduct only $100 a year over the life of the loan--unless you sell the house before the 30 years is up. In that case, you are permitted to deduct in one lump sum the remainder of the points.

Q: Is it true that the federal government auctions off the goodies it picks up from drug busts? I don't mean the drugs; I mean confiscated boats and sports cars and other types of property. If this is true, do you know how I get more details?--B. F.

A: The government is required by law to sell all items acquired in drug busts within two months of seizing the goods. But you should keep in mind that all property is sold "as is," meaning it is sometimes damaged.

The good news is that you can save an estimated 40% to 60% on some of the auctioned goods.

For more information, call the National Auction Bulletin at 1-800-327-2049, or write to them at Department BL, 230 Basin Drive, Fort Lauderdale, Fla. 33308. The auction bulletin is a twice-monthly listing of available goods and costs $49 a year.

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