Do you have some ideas on how to improve or simplify the infamous IRS Form 1040--or any other federal tax form? Here's your chance to speak up.

In recent weeks the IRS has held public hearings in several cities as a part of its annual review of forms, schedules and related instructions.

If you missed the opportunity to present your favorite suggestion in person to a panel of IRS officials, don't fret. You can still pass it along in writing.

Send your written comments clearly explaining your suggestion by June 1 to "Chairman, Tax Forms Coordinating Committee, Room 5577, Internal Revenue Service, 1111 Constitution Ave. NW, Washington, D.C. 20224."

Don't bother sending them blanket instructions on what they can do with their tax forms; the IRS has heard all that before. But if you have a serious constructive idea, send it along. There have been changes in the past as a result of suggestions from taxpayers.

Question: My husband died in 1977. I was being treated for a heart condition at the time and decided to change the deed on our home to joint ownership with my daughter, to make it easier for her if I died. She is 39; I am 66. If we sell the house now, how does this affect the exclusion of gain--can I claim the full $125,000 exclusion?

Answer: No, you can't. In the case of joint owners who are not married to each other, each co-owner must meet the age and residence requirements individually.

The fact that you meet the tests does not automatically qualify your daughter for the exclusion. She would have to qualify on her own--and of course she doesn't because of her age.

(This rule does not apply to joint owners who are spouses. The entire gain, up to the $125,000 ceiling, qualifies for exclusion if either spouse meets the age and residence requirements.)

As a result of the joint ownership arrangement, you would only be permitted to exclude from capital gain liability half of the profit on the sale. The other half would be reportable by your daughter, unless she qualified for deferral by purchasing another residence costing at least as much as half the sales price of your present home.

I suggest you transfer the deed back to your name. (Ask your attorney about possible gift tax implications.) This will permit you to take advantage of the full exclusion on the sale. It will also eliminate your daughter's veto power on your freedom of action regarding the house.

And it really won't complicate your daughter's life after your death, if you bequeath the house to her in your will. With the joint ownership setup she would still have about the same amount of paperwork to have your half ownership transferred to her as she would if you own the property by yourself.

Q: I have two 2 1/2-year certificates of deposit, taken primarily to reduce present interest income on the assumption that the interest is reported at maturity. The savings institution that holds one CD reported the year's earnings to the IRS. The other bank did not provide a form, saying that interest is reported only when paid, not when credited to the account. Which one is right?

A: The savings institution that reported the earnings to the IRS (and I presume to you) is right. Unfortunately for your original premise, interest on a CD with a life of more than one year is taxable when earned, whether paid to you or simply credited to your account.

(The exception is for certificates for one year or less on which you would incur a penalty for early withdrawal of interest. In that case the interest is taxable in the year of maturity.)

There are two parts to the reasoning behind this rule. If the interest is available for withdrawal when credited, it is considered to have been "constructively received" by you whether you take it in cash or leave it in the account.

The second part applies to those certificates which do not permit withdrawal of interest prior to maturity. The difference between the initial deposit and the maturity value is treated as "original issue discount." A proportional share of the total interest is considered earned each month, and must be reported as income for the current year.