PF QUESTIONS. A selection of responses to readers' financial questions

Q:Because of a real estate sale, my husband and I will be in a 40 percent tax bracket (federal and state) this year and next. In 1989, we will return to a lower bracket. What, other than municipal bonds, can we invest in in order to defer income until 1989? A:Actually many investments, including common stocks, are available to you. As long as the price of your stocks goes up between now and 1989, you won't pay any taxes on the gain until you sell. Unfortunately, you can no longer exclude up to $100 of dividends ($200 on a joint return) from taxable income. But if you're the type who likes growth stocks and is patient, you really won't miss the dividends and can wait until it's time to sell to take your gains.

If you want to avoid risk - and after the Oct. 19 market plunge, many people do - you might consider United States Savings Bonds. These are also for people with long horizons, but the Series EE bonds are currently paying 7.17 percent, free of state taxes and free of federal taxes until you redeem them. If you want, you don't have to redeem them; just convert them to Series HH bonds at maturity. The HH bonds will then pay interest directly.

There is also a wide variety of insurance products, including universal life and variable life, that defer taxes on earnings. These, too, are a fairly long-term proposition, so you might not want to dump all the money from your sale into one of them.

Q:How do you protect yourself from scams in the numismatic investment area? I receive many solicitations in the mail extolling the quality and scarcity of different coins with very specific instructions on purchasing. Nobody ever tells you about selling such coins.

A:Your suspicions are well founded. It's usually not a good idea to make any investment you haven't looked into yourself first. Getting the idea from a mail solicitation is often the first step to getting into trouble. If you are interested in coins, or any other collectible you haven't tried before, go to a library or bookstore and do some research. Pick up a couple of issues of a coin collecting magazine. After you've done your research, go to a few dealers on your own - with no intention of buying immediately - and ask lots of questions about grade, condition, shine, and luster.

The most important thing to look for in a dealer is reputation. Find one that has been in business a few decades, not a few years. Don't buy through the mail from someone you never heard of or are never likely to meet face to face.

Many financial planners have recommended coins as an investment for their clients, but there are pitfalls here, too. Commissions for planners can run as high as 18 percent of the value of the portfolio. Many planners don't know any more about coins than their clients do, so they must also depend on a reputable dealer. The high commissions could tempt some planners to forgo checking into the dealer carefully, or they might not have the coins independently appraised.

Finally, don't put more than 5 or 10 percent of your investment assets into rare coins. Numismatics is interesting, and a properly graded portfolio will hold its value over time, but with a few exceptions, you won't see your coins multiplying in value many times over.

Q:Can I still roll over the lump-sum distribution from my pension plan into an individual retirement account, or has that been cut back by tax reform, too?

A:No, it has not. If you put the distribution into an IRA rollover within 60 days after you receive it, you will not owe any current income taxes on the distribution. You can roll over the entire lump-sum distribution, or only part of it, but what you don't put in the IRA will be subject to ordinary income tax and subject to a 10 percent penalty if you are under 59 years of age. If you have a question, please send it to: Personal Finance Questions, The Christian Science Monitor, One Norway St., Boston, MA 02115. Questions should be brief and of interest to as many readers as possible. We'll answer as many questions here as we can, but we cannot answer letters individually.

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