Q: I have opportunities to invest in tax shelters from time to time. Can you give me any rules of thumb I can use to determine if they are good ones?

A: I have pointed out before that if most of your income is from salary, a tax shelter investment may not be worth the risk. This is because the maximum tax rate on your salary is 50 percent.

A tax shelter investment simply defers paying certain taxes. It doesn't completely forgive your paying those taxes. So when you or your heirs finally do have to pay the taxes, the tax rate may be higher than 50 percent. (Under today's tax structure, the rate may be as high as 70 percent.)

In addition, if the property is sold and a long-term capital gains tax had to be paid, the effective tax rate may not represent much of a savings for the risk you may take.

Bearing this in mind, if you still want to make such investments, here are some things to consider carefully. Generally speaking:

The greater the promised tax reduction, the riskier the investment. For example, if you're promised a four-to-one write-off (deductible expenses equal to four times your cash investment), you can be reasonably sure the investment carries a lot of risk.

The smaller the required minimum investment, the riskier the investment. With a top-flight investment, thre's little difficulty in pricing the required minimum investment is quite risky. (The promoters or syndicators are looking for less sophisticated investors who can't or won't consult professional advisors to look into the legal end economic aspects of the underlying real estate and he investment itself.)

The farther away the investment, the riskier the investment.For example, if the investment is in Nevada and you live in Maryland, you want to find out why all the people with money to invest who live in Nevada and California - and other states closer to Nevada than Maryland - aren't interested in the investment. Is it because it's too risky?

The better the anticipated return, the riskier the investment. For example, suppose you're told you can triple your money in a year. If the investment is really that good, moneyed people are going to be trampling over each other to invest. When they aren't, the chances are good that they found it too risky.

Finally, get expert advice from your lawyer, real estate counselor, and accountant on the details of every investment. Be sure that the underlying real estate is sound, that the legal documentation is adequate, proper and fair, that the tax deductions are defensible and that the numbers make sense.

Q: I've been notified that Fairfax County is planning to take two lots I own under the power of eminent domain. This notice says I'll receive just compensation. Can you fill me in on"eminent domain" and "just compensation?"

A: Eminent domain (also sometimes called the power of or right of condmnation) is the right of the government, or an entity acting under a government's authority, to take private property for public use or a public purpose (upon payment of just compensation).

An example of private property taken for public use is the taking of privately owned land to convert it into a public recreation area or to build a city hall or county or state office building on it.

Taking private property for a public purpoe i a little more subtle. Only in the last few decades has this been widely practiced. An example of this is taking private property so that a private developer may construct housing for low-income families on the land. Here, you see, ownership of the land may pass out of the hands of the government. The land is not used by the public generally, or by its elected or appointed representatives.

Just compensation is the term generally equated with "fair market value" or "market value" (they're synonymous).

Some jurisdictions in the United States, however, have defined "just compensation" differently. So to be certain what it means in Virginia check the statutes and judicial decisions that define it there.