HOW MUCH IS MY ANCIENT EDISON PHONOGRAPH WORTH?
(MONEY Magazine) – INVESTING Q. I recently purchased Citicorp stock directly from the company, without brokers' fees. Do other firms offer such direct purchases? Erik Schneider Sacramento
A. Four companies now sell their shares directly to the public, in amounts as small as $25, without fees or commissions. Besides Citicorp, the companies are $ W.R. Grace, Great Northern Nekoosa and Johnson Controls. All trade on the New York Stock Exchange. (Citicorp's offer is not available in 25 states, owing to restrictions of state law, but the others are good everywhere.) To make a purchase, get the company's address from Standard & Poor's Register of Corporations in your local library and write to the investor relations department for information. There is one catch: you have to enroll in the firms' dividend-reinvestment plans in which your earnings are earmarked to buy more stock, also without brokerage charges. About 1,000 other U.S. companies offer similar plans after you first buy stock through a broker. For a register of the 1,000, send $24.95 by check or money order to Evergreen Enterprises, P.O. Box 763, Laurel, Md. 20707.
COLLECTIBLES Q. I have an Edison cylinder player called a Triumph and a cylinder storage cabinet, both circa 1900 and in working order. Where can I find more information about these and how much they might be worth? Michael H. Flashburg Wayside, N.J.
A. Thomas Edison, who invented the phonograph in 1877, began making commercial cylinder players like yours in his West Orange, N.J. factory two decades later. Charles Hummel, an appraiser and restorer for the Edison Foundation in West Orange, reports that the Triumph model sold for about $50 at the turn of the century but could fetch up to $800 today. The storage cabinet could be worth another $100 to $150; the cylinders, if you have any, would bring $5 to $10 each. For a list of books on the subject -- and the names of dealers and collectors in your area -- mail a stamped, self-addressed envelope to Antique Phonograph Monthly, 502 E. 17th St., Brooklyn, N.Y. 11226.
LIENS Q. A window supplier attached a mechanic's lien ((a claim on property filed by a builder, laborer or provider of construction goods)) on my home because a contractor I hired failed to pay the supplier and later went bankrupt. Settling the claim and removing the lien cost me $950 in payments and another $450 in legal fees. Is any portion of that tax deductible? Edward Varela Englewood, Colo.
A. No, but since both your direct payments and legal expenses were used to clear a claim on the title to your home, you can treat the entire $1,400 as the equivalent of a capital improvement. This would increase the cost basis of your property and diminish any capital-gains tax when you sell it. But be sure ) to keep complete records of the matter for proof.
SAVINGS BONDS Q. My employer doesn't offer a payroll savings plan for U.S. bonds. Can mail- or phone-order sales be arranged? Malu Gawthrop Albuquerque
A. You can purchase Series EE bonds -- by mail but not phone -- in denominations of $50, $75, $100, $500, $1,000, $5,000 or $10,000. To do so, get a PD 4882 application form from your bank, fill it out and enclose either a check or a money order for half the face amount of the Series EE bonds you want. Address it to either the Federal Reserve Bank branch in your district or to the Bureau of Public Debt, Parkersburg, W.Va. 26106-1328. You will receive your bonds in about four weeks.
TAXES Q. I invested $5,350 in a futures program with JCC Inc. in Florida and lost it all. The company told me that I could deduct its $2,500 management fee off the top of my taxes. Is this true? Ralph Armour Valencia, Pa.
A. Part of the $2,500 may be deductible, depending on your circumstances. The Internal Revenue Service allows you to take off that portion of your expenses (including investment advisory fees) that exceeds 2% of your adjusted gross income. You might also want to investigate whether there is any aspect of your case that would be worth taking to arbitration. Futures and options are high-risk plays, even for those familiar with the markets, and commodities brokers are required by law to gather information about the net worth of a prospective client -- and to provide a statement explaining the risks and potential losses -- before the person invests. As it happens, the National Futures Association, the industry's self-regulatory group, censured JCC and several other firms in July 1987 for allegedly failing to do either of these adequately. The action involved no discipline and was thus mainly a slap on the wrist. But individual investors may be able to seek recourse under the arbitration system. For information on how to do so, get in touch with the Arbitration Administrator for the National Futures Association (200 W. Madison St., Suite 1600, Chicago, Ill. 60606; 800-621-3590, 800-572-9400 in Illinois). Ask for the free booklet entitled Arbitration: A Way to Resolve Futures-Related Disputes.
LIMITED PARTNERSHIPS Q. The sponsors of my Drexel Burnham Lambert real estate limited partnership recently told me it was suspending quarterly distributions because of poor business conditions. I invested in this partnership in 1985 because my broker said it would liquidate within five to eight years. But the prospectus says the termination date is 2034. Do I lose all my principal if I withdraw now? Christine McFarland Jenkintown, Pa.
A. No, but you will probably have to sell at 20% to 50% less than your original purchase price. Limited partnerships are long-term investments, and you often have to wait five years or more before they earn enough to offset initial fees and setup expenses. And since real estate is a cyclical industry, you might have to wait as long as eight years before the partnership liquidates. That is the reason you were quoted the five- to eight-year figure. (The 2034 date, Drexel says, is just the outside limit required for legal purposes.) If you cannot wait that long, call or write Drexel Burnham to list your units for sale through their brokerage network. Expect to pay a 7% to 8% commission to the buyer's broker, though. You can also market your units via an electronic billboard maintained by the National Partnership Exchange, 100 W. Kennedy Blvd., Suite 260, Tampa, Fla. 33602; 800-356-2739.