In yesterday's column "Tax Law & Income," in this section, a statement about inter vivos or "living" trusts was incorrect. In order to avoid estate tax, the individual creating the trust must surrender all rights to its assets, including the right to receive income from it. A trust as described in the column might reduce the administrative expenses of settling an estate but, the assets would incur estate tax liability.

Question: To reduce our estates, may my wife and I make gifts to our children (within the $3,000 annual exemption) of bearer municipal bonds, but retain the semi-annual interest coupons to cash for our own benefit? In other words, can the coupons be considered owned separately from the bond itself ?

ANSWER: Technically, no. The interest coupons on bearer bonds have no intrinsic value except as a part of the underlying bonds. Perhaps more important, a bearer bond is not transferable without the current and future interest coupons attached.

Of course, if you and your children remain on good terms throughout your lifetime, this might not present a practical problem. However, there is a better way to accomplish your purpose.

You can establish an inter vivos or "living" trust with your children named as the ultimate beneficiaries of the corpus (principal) of the trust and you and your wife as lifetime income beneficiaries.

The two of you together can make gifts into the trust of up to $6,000 a year per child without gift and estate tax liability if the trust is irrevocable and you retain no control of any kind over the assets (other than the right to receive the income).

Caution: This is not a "do-it-yourself" project. The regulations governing trusts are quite complex: even a minor variance could lose you the estate tax exclusion. You should have the trust instrument drawn by a qualified attorney to be sure it complies with all the rules.

Q: If a person is drawing Social Security and earns over $3,000 during the year, he has to forfeit one dollar in benefits for every two dollars over that amount. What if someone is lucky enough to win more than $3,000 in the Maryland lottery - is this counted in figurig earnings ?

A: No - lottery winnings are not earned income and do not affect your Social security benefits. Also excluded is income from savings and investments, pension or retirement plans, and life insurance payments.

I should point out, too, that you do not necessarily forfeit in full one half of all earned income over $3,000 for the year. The maximum amount forfeited is the total benefits due for only those months in which you earned more than $250 or devoted more than 45 hous to self-employment.

If your work is seasonal, for example, you are entitled to a full benefit for every month you did not exceed these monthly ceilings, no matter what your total earnings for the year. (Note: The figures given are for 1977; the dollar ceiling - but not the 45-hour limit - will increase for 1978 and succeeding years.)

Q: In 1974 we purchased a lot in a recreation development for incesiment purposes. We are required to pay a quarterly water/sewer availability charge and an annual membership fee for security, roads, etc., even though we don't use any of the facilities. Can these charges be deducted on our income tax return ?

A: Carrying charges for unimporved real estate held for investment can be claimed in either of two ways. The choice is yours - and you can decide each year which is the better method.

You can consider the amount of the charges as an investment expense, and claim it as a miscellaneous deduction on Schedule A of your tax return. (Naturally you would not select this method if you take the standard deduction instead of itemizing.)

The alternative is to capitalize the fees; that is, you add the amount each year to the cost basis of the property. You do not get an annual tax savings this way: instead, you reduce the amount of gain realized when you eventually sell the property .