Soon I will receive a number of shares of Conrail stock through our employe stock ownership plan; I have no money invested in the stock. How will this stock be treated by the Internal Revenue Service? I understand I will have to file estimated tax. What is this tax considered -- capital gains or gift or what? And what price do I go by? I know I can roll it over to an individual retirement account. Please give me some insight.

If you decide to retain the shares, then you must report the market value on the date of the distribution as income for the year received. (For 1987, it goes on line 16 of Form 1040.)

And you're right -- if the amount is substantial, you will have to file estimated tax, on Form 1040ES, and prepay some of the expected tax liability.

The total of tax withheld and estimated tax payments should equal at least 90 percent of your total estimated tax, with any balance to be paid with your return in April.

If you participated in the ESOP for at least five years, then you may be able to reduce the tax bite by using special five-year averaging on Form 4972.

(If you were at least 50 years old on Jan. 1, 1986, you may elect either five-year averaging using current tax rates or 10-year averaging using 1986 tax rates.)

When you sell the shares later, you will have a capital transaction.

You will report it on Schedule D showing the proceeds of the sale and using the market value at the time of the distribution -- the amount you report as income now -- as the basis for figuring capital gain or loss.

You may choose to roll over the distribution into an IRA, which will defer tax liability until you withdraw money from the IRA.

(However, a rollover to an IRA will eliminate the use of five-year or 10-year averaging for later withdrawals.)

If you now have, or establish, a self-directed IRA with a broker, you may then deposit the shares of stock directly into that account.

But if you want to invest the money in something like a certificate of deposit or a mutual fund, you will have to sell the shares, then deposit the exact amount received into the IRA.

The deposit must be made within 60 days after you receive the shares from the ESOP trustee.

In a recent column you addressed the tax treatment for the cost of volunteer work for a nonprofit organization. My wife and I both volunteer for a national political candidate, and we incur unreimbursed expenses for driving and parking.

Is it possible to claim any part of these expenses as political contributions? A member of the campaign staff said such expenses could be claimed. I would feel more comfortable with your guidance.

Bad news -- the credit for political contributions was eliminated, starting with the 1987 tax year, by the Tax Reform Act of 1986. You'll be doing your fellow volunteers a favor if you call this to the attention of the staff member.

As we approach retirement, on the advice of our broker we have been getting out of the market and switching to more secure income-producing investments. We have long-term gains to report this year.

Am I correct in my understanding that if our adjusted gross income for 1987 as joint filers is under $45,000, it will be taxed at a top rate of 28 percent instead of 33 percent? And that this is a one-year-only rate?

For 1987 only, a tax ceiling of 28 percent has been set on long-term capital gains. The regular tax rate is established by your taxable income rather than your adjusted gross income, so I have no way of knowing what your normal tax will be.

However, unless your exemptions and deductions bring your $45,000 gross income down below $28,000, you'll be in the 28 percent bracket.

For 1988, despite the introduction of the final rates mandated by the Tax Reform Act of 1986, you will again be in the 28 percent tax bracket unless your taxable income falls below $29,750, the top of the 15 percent tax bracket.

So long-term gains in either year will come in at 28 percent.

Abramson is a family financial counselor and tax adviser. Questions of general interest on tax matters, insurance, investments, estate planning and other aspects of family finances will be answered in this column. Advice cannot be given on an individual basis. Address all questions to E.M. Abramson, The Washington Post, Business & Finance News, 1150 15th St. NW, Washington, D.C. 20071.