(MONEY Magazine) – This month's tax questions are answered by Gary R. Donahue, partner at the Touche Ross Financial Services Center, located in New York City.

Q. I am 66 and plan to move from New York to Florida, where I can buy a condo for about $45,000. I have twice that much in IRAs and would like to use part of that money to pay for the condo in cash. Can I do that without tax consequences? D. Duggan, Staten Island, N.Y. A. Probably not. It is illegal to borrow against your IRA account. Since you are over age 59 1/2, you may withdraw from it without a penalty, but most likely the withdrawal will be taxed as ordinary income. If, however, you have made any nondeductible contributions since the Tax Reform Act of 1986, as many people who no longer qualify for the deduction have done, the principal of that after-tax money may be withdrawn free and clear.

Q. I was transferred recently from California to Texas. I sold my California house for $200,000 and bought one in Texas for $140,000. Can I avoid paying capital-gains tax on that $60,000 because I was required by my employer to make the move? Is there some other way to buy a new home for less than my old one fetched and still avoid or defer the gain? Andy Harris, Dallas A. You can avoid it only if you or your spouse is 55 or older. Then you are entitled to a one-time gain exclusion of as much as $125,000. In addition, you can reduce your gain by the amount of certain expenses connected with the sale: broker's commissions, lawyer's fees and fix-up expenses like painting the house to improve its market appeal. Also -- and many people seem not to know this -- you may increase your purchase price, thereby cutting your taxable gain, by adding the cost of any capital improvements you make on your new home within two years of the sale of your old one. Finally, and most important, your taxable gain could be reduced further by increasing your basis in the old house by adding the cost of any capital improvements you made to it.

Q. How much can a married couple give a child over 21 without getting taxed? Willard E. Crawford, Oroville, Calif. A. Age has nothing to do with it. Every year, you and your spouse may give as much as $10,000 each, or $20,000 jointly, with no tax. Beyond that, you both are entitled to a unified credit that, if you choose, will wipe out gift tax on any amount up to $600,000 each. But the more of that unified credit you use to cover gifts during your lifetime, the less of it will be left to apply against estate taxes after your death.

Q. My mother passed away last October, naming me beneficiary of her IRA. I liquidated it in May. Can I put the untaxed proceeds on a tax return in her name as opposed to mine? I filed a tax return for her in April. Can I file another for her next April listing the IRA funds? Judge E. Buskuhl, Poway, Calif. A. No. The proceeds of the IRA are taxable to you and should be included on your 1989 income tax return. Depending on the size of your mother's estate, there may also be estate taxes to pay. If so, you will be entitled to a special deduction on your income taxes for that amount. You take it as a miscellaneous itemized deduction and, unlike other such write-offs, there isn't any 2%-of- adjusted-gross-income floor.

Q. Recently when my old computer crashed and died, I invested $7,500 in a new system. Now I'm told that I can either depreciate or deduct the full $7,500 because I am a teacher who uses the system exclusively for my job. Is this true? Larry Shaw, Gustine, Calif. A. Probably not, unless you can show the IRS that your computer is for your employer's convenience and is required as a condition of employment. If a computer is available to you at your school, for instance, you may as well not bother trying for such a write-off. Not long ago, the Tax Court allowed a deduction for a couple who proved both that their work required a computer and that their employer did not provide one. Further, their purchase was for their employer's convenience in that it saved him from having to buy one.

Send questions along with your address and phone number to MONEY Tax Letter, Room 33-17B, Time & Life Building, Rockefeller Center, New York, N.Y. 10020.