If you ever bought any mutual fund shares, or even only contemplated such a purchase, I'm sure you were turned off--as most of us are--by the size and complexity of the prospectus the salesman or representative is required to deliver to you.

As a result of that complexity, most people simply ignored the prospectus rather than attempting to wade through all the required mumbo-jumbo. Instead of providing a wealth of information to the potential investor, the prospectus simply alienated him.

Relief is now in sight. The Securities and Exchange Commission recently concluded that "mutual fund prospectuses are not effective disclosure documents for most investors because they are too long and complex."

Fund distributors will now be permitted to issue shorter and more readable prospectuses, which should have the happy result of creating better informed investors. This is one occasion when "less" may very well turn out to be "more."

Certain basic information will still be required, and I urge all current and potential investors to take advantage of the improved presentation by reading it. (I'm sure fund sponsors will send a copy of the new prospectus to each present investor.)

The two areas that I consider the most important for a fund investor--and which will be included in the new format--are the fees charged and the fund investment objectives. If you don't read anything else, make sure you're familiar with these two areas of information about your fund.

Question: I invested $13,000 in stock in my son-in-law's business. The business failed and the office was closed in January 1983. Can I spread the deductions for income tax over more than one year? What proof will I need for the IRS?

Answer: When taking the Schedule D deduction for corporate stock that has become worthless, the stock is treated as if the shares had been sold on the last day of the year. So you will have a capital loss as of Dec. 31, 1983.

Assuming you bought the stock in 1982 or earlier, that will make it a long-term loss; only 50 percent of the loss will then end up being deductible. The maximum amount of net capital loss you may take in any one year is $3,000.

If you have no offsetting capital gains, you may then use the first $6,000 of the loss to give you a $3,000 deduction for 1983; the balance may then be carried forward to successive years until it is all used.

Note, however, that you show the full amount of the loss on your 1983 Schedule D. There is space on the reverse side of the form to show how much of the total is to be used for the current year and how much is to be carried forward.

If the deduction is questioned by the IRS, you will need to show the stock certificate: canceled check or other evidence of the cost; and proof of the bankruptcy or failure of the company. You can anticipate careful scrutiny because of the family relationship here.

Q (from Bermuda): I read with interest your column of last spring telling of Citicorp's banking package for Americans working overseas. However, I am writing to query your statement that "Citicorp will also pay . . . monthly deposits into an IRA . . . " I believe an IRA is not allowable from overseas earnings which are exempt from U.S. income tax (although several friends are still contributing to an IRA).

A: You're right--overseas earnings which are excluded under the $80,000 annual exclusion (1983 figure) do not qualify for an IRA deduction. Section 219(b) of the IRS Code restricts IRA eligibility to compensation which is includable in an individual's gross income.

However, there are circumstances that might qualify an American employed overseas for an IRA, and thus make the Citicorp offer useful. For example, someone working overseas might own, in whole or in part, a business at home from which taxable earnings are derived.

Or a person earning excludable income may have a spouse employed by the U.S. government overseas and thus qualified for an IRA. And earnings above the exclusion ceiling are taxable compensation and eligible for an IRA deduction.