Personal Finance: Prince looking like more of a pauper

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Michelle Singletary
Thursday, April 1, 2010; 11:01 AM

The Minneapolis-born Prince, his purple highness, is on a taxpayer deadbeat list.

The Associated Press and Star Tribune report that the R&B musician and his companies owe more than $450,000 in back property taxes, interest and fines. Read the full story here: Prince looks like pauper in Minnesota tax records. (Apr. 1)

One would think that with all his fame and fortune that Prince would pay his tax bills on time. But as I said when I debuted this feature of the e-letter, having a lot of money doesn't mean you know how to manage it.

Tax Tip

Did you contribute to a Haiti relief fund or donate to some other charity last year? If so, it's important you know the new rules for claiming those deductions on your tax return.

Here's what to consider, according to the IRS:

-- You can't deduct contributions made to specific individuals.

-- You can't deduct the value of your time or services.

-- If your contribution entitles you to merchandise, goods or services, including admission to a charity ball, banquet, theatrical performance or sporting event, you can deduct only the amount that exceeds the fair market value of the benefit received.

Here's a link to the IRS's Ten Tips for Deducting Charitable Contributions.

Credit CARD Act Impact

I've told you that I have a love/hate relationship with gift cards. I appreciate the flexibility they provide, but as a hoarder, I try to save the cards I receive. By the time I try to use them, they have often expired or the fees have left me with balances of little to nothing.

However, hope has arrived!

As part of the Credit Card Accountability Responsibility and Disclosure Act of 2009, the Federal Reserve issued new rules for gift cards:

-- The expiration date for the money loaded on a gift card must be at least five years after the date of issuance, or five years after the date when funds were last loaded.

-- Dormancy fees, inactivity fees, and service fees on gift cards are banned unless you haven't used the certificate or card for at least one year.

-- Fees are limited to one per month.

Mark your calendars because this provision of the credit card act goes into effect August 22. And check out the Fed's final rules on gift cards.

Debt Comes Back to Bite Homeowners

Some borrowers who have lost their homes are finding out years later that they are still on the hook for loans left after foreclosures and short sales.

Lenders are selling the debt left by home loan borrowers to collection companies that aggressively pursue the debtors, reports Jim Wasserman in Debt collectors can come calling years after a mortgage default. (Mar. 27)

As Wasserman reports, in a short sale--which is when a home is sold for less than what is owed on it--borrowers can negotiate away debt obligations for a second-lien loan. But many inexperienced borrowers don't know that, and they sign agreements giving lenders the right to pursue them later.

"As debt collectors seek at least partial repayment of millions of dollars in unpaid home loans, some say renewed financial stresses on tens of thousands of consumers could dampen economic recovery," Wasserman writes.

Jobs Should Be Next

Now that President Obama can put a check mark next to health-care reform, the National Urban League wants the administration to rally behind a jobs bill that would help employ African Americans.

The organization just released its annual "State of Black America" report and the economic news for black families isn't good, reports Krissah Thompson in National Urban League urges attention on housing, jobs for African Americans. (Mar. 24)

Last month, blacks were unemployed at nearly twice the rate of whites, with 15.9 percent compared to 8.8 percent. When the Urban League began tracking economic and racial disparities annually in 1974, black families made a median income of $7,808 compared with $13,356 for whites. Things are better now, but the disparity is still wide with black families now earning $34,218 compared with $55,530 for white families.

The "State of Black America" report, which measures disparities in areas of economics, education, health, civic engagement and social justice, includes a Hispanic index for the first time this year. In 2009, black unemployment was 14.8 percent compared to 8.5 percent for whites. Hispanic unemployment fell in between that of blacks and whites at 12.1 percent.

Although the league's president and chief executive Marc H. Morial said he is encouraged by the increase in the number of middle-income African Americans, he's still troubled by the overall high unemployment and foreclosure rates in the black community.

"It's like being the caboose on a train. African Americans are the caboose," Morial said. "If the train goes 20 miles an hour, you're the caboose. If the train goes 200 miles an hour, you're the caboose. You can move faster and still be behind."

Upcoming Events

Here are some media events and discussions about my book, "The Power to Prosper."

April 6th, 4:06 p.m.: Appearance on ABC News Now. ABC News NOW, is available on cable, online or on your cell.

April 7th, 6:30 p.m.: First Baptist Church of Wheaton. 10914 Georgia Ave., Silver Spring, Md. 20902. 301-949-6585.

April 10th, 2:00 p.m.: Appearance on CNN.

April 28th, 7:30 p.m.: Book signing and discussion at Union Bethel AME Church. 6810 Floral Park Rd. Brandywine, Md. 20613. 301-385-0717.

Tia Lewis contributed to this e-letter.

You are welcome to e-mail comments and questions to singletarym@washpost.com. Please include your name and hometown; your comments may be used in a future column or newsletter unless otherwise requested.


© 2010 The Washington Post Company

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