European Stars And Stripes (Newspaper) - February 28, 1988, Darmstadt, Hesse                                Page 18 the stars and stripes business news by j l. Kominicki currency traders in Frankfurt and Londo predict Little change in the Dollar in coming weeks As the markets continue their fascination with the . Trade deficit. A lot of people feel that the deficit picture is truly improving but they re just not sure enough yet to begin betting on it a London trader  leads to a lot of waiting from one month to the next. It really gets Boring  joked one Frankfurt trader if the Dollar re Mains at current Levels for much longer i think you re going to see a lot of movement out of currency trading and into something with a Little action in the past the currency markets have looked to such factors As unemployment and interest rates to provide momentum behind their Dollar dealing. Most recently however the United states massive trading shortfall and to a lesser extent consumer spending have emerged As the Market s favored indicators of american eco nomic strength. The next round of deficit figures measuring America s current account performance in the month of january arc not due out until march17, suggesting a stable Greenback for at least three More weeks. Although the deficit has shown steady in prove Cut since october when it posted a record $ 17 billion increase the experts expect the Short fall to Widen in january perhaps to Levels As High As $14.5 billion. The december deficit announced earlier this month was $ 12.2 billion. If the deficit docs Widen As expected it Likely would not have any significant effect on the Dol Lar. Something around si3 billion or $14 billion just does t Tell us anything it does t give us anywhere to go said a Frankfurt  la probably Sec just another month of wait ing if the deficit figures come in at those  since Banks and trading houses need move Mcnol in the Dollar to make profits there also is growing belief among traders that the  begin pushing the Buck. Up or Down one Way or another it does really matter As Long As it s going somewhere commented one Trade others however say economic factors such Ashe american economic slowdown and the Lack of improvement in the Trade deficit will be enough to push the Dollar into decline this sum Mer perhaps to Levels As Low As 1.50 West Ger Man Marks and around 125 japanese yen. "1 think there is still room for the Dollar  said the director of trading at one of the largest . Banks in Frankfurt if nothing else you re looking at a Trade deficit of Between $130 billion and $150 billion in 1988. That hardly Good news whatever the improvement. My bet is something around 1.55 Marks by August and in a Down surge Strong enough to push through Central Bank intervention. 1 looking for the Central Banks to come in Strong when the Dollar dips below 1.63  the Dollar firmed Early in the past week Fol lowing congressional testimony by Alan Green Span. The Federal Reserve Board chairman twice said he did not favor pushing the Dollar lower to improve America s Trade picture. Greenspan also told Congress he favors Strong anti inflationary program for America As the economic expansion runs out of steam. While the currency Market took some comforting the remarks his testimony lacked the punch necessary to bring about substantial change in the Dollar s position. Greenspan in t interested in lowering inter est rates because he in t going to hang the threat of increased inflation on the White House in an election year a British trader said. He Salso said he is Happy with the Dollar at current Levels. Remarks like that Don t do anything for the Dollar and they Don t do anything for  some americans eligible for temporary tax Relief As Mutual funds owners Washington a up to 20 million Ameri cans Are in line for some temporary tax Relief when they file their returns this year and Many apparently Are totally unaware. President Reagan considers the Relief so important that he has Aske Congress to make it permanent at a Cost to the Treasury of $400 million a year. The benefits arc limited to owners of shares in publicly offered Mutual funds that have at least 500 shareholders. The provision is one of those special interest amendment that seem to find their Way into every tax Bill especially when those Bills Are written behind closed doors. This one has its roots in the 1986 tax overhaul. Apart of that big change the itemized deduction for miscellaneous expenses was limited to those that exceed 2 percent of adjusted Gross income. Thus a taxpayer s deduction of Union dues subscriptions to Job related publications work uniforms and the like would be restricted to the portion exceed ing that income threshold. For example if adjusted Gross income was $30,000 and miscellaneous deductions totalled $2,000, Only $ 1,400 could be deducted. In writing the 1986 tax Law the Senate at the Las minute included a Section aimed at preventing tax evasion that prohibits a pass through entity Suchias a Mutual fund from deducting an expense that an individual could not deduct. As a result managers of Mutual funds arc dividing up their operating costs among shareholders who Are treated As if they had received those costs As  must list this income on their lax return. This phantom income argued the investment company Institute which represents managers and underwriters of Mutual funds cannot be banked can not be invested and cannot be used to buy groceries. The Only thing it is Good for is to pay taxes  but could not the recipient simply write off the phantom income As an investment expense sure i the recipient itemized deductions. Maybe. Unless a shareholder s total miscellaneous expenses exceeded 2 percent of his or her adjusted Gross income the Mutual fund write off would be lost. But the shareholder would still have to list the Money As taxable income. In the closing Days of the 1987 congressional ses Sion tax writers meeting behind closed doors agreed there was some inequity and gave shareholders Relief for another  Means Mutual fund expenses that Are reported to a shareholder As income for 1987 May be Deduc Tedas a miscellaneous expense without regard to the 2 percent threshold. Other miscellaneous expenses will of course still be subject to the threshold. This Relief became Law in late december but word i slow getting out. Money Magazine in asking 50 professional tax preparers to calculate the liability of a hypothetical family found that 20 of the 50 were not aware of the change. Internal Revenue service offices in several cities say they have never heard of the change. The Only mention of the provision in irs publications is a caution to taxpayers that Congress was considering some Relief when the literature went to press. But the last chapter has yet to be written. In the1989 budget that he sent to Congress last week Reagan asked to make permanent the Relief for Mutual fun holders an idea that already has wide support among congressional tax writers. Savings shift whore americans invest in percent common sleek an Bond Mutual funds u it9771 cd $100,000 or More cd ten than $100,000 of tall Tatum in pc 6r no vhf pm. Sara it Wal Rwm bold ,co�$100.000 a can Nofi took and Bon Mutual fund Money Market depot it accounts taxpayers delay filing of returns for 87 because of new fax code faced with a tougher and More Complex lax code Many taxpayers apparently Are taking their time infilling their 1987 returns despite the fact that re funds arc on average higher than a year ago. As of mid february the number of returns arriving at irs processing centers in the United states was off10 percent from last year less than 17 million As com pared to nearly 19 million in 1987, according to Barbara j. Mchrmann with the Revenue service s Bonn office. The average refund to Date is $743. Up nearly 13percent from last year s average of $658, she said. Tax returns filed As of Friday were requiring about five weeks to process and return if they contained no errors. Taxpayers who file after april 1 can expect to Wail six weeks or More Gehrmann said. Because of the Broad changes in the tax code some taxpayers who May have expected a refund have found they actually owe the government Money. While the irs can give advice on settling the Bill and in extreme situations help work out payment plans in most cases you can get a better rate borrowing from a Bank Mchrmann said. In any event the Cardinal Rule is Don t procrastinate she said. Irs interest and penalties can get  the most common errors cropping up on 1987 re turns Stem from personal exemptions for dependent Sand changes involving itemized deductions. The irs offers the following tips for taxpayers who have not yet filed be sure to Check the Box on forms i040ez and i040a to answer the question can you be claimed Asa dependent on another s return a student working part time for example should Check yes and have his personal exemption claimed on the return of a Parent or guardian. Some taxpayers who itemize on schedule a appear to be misreading a note that says sales taxes no longer Are deductible. The note does not Rule out deductions for All state taxes. Those who Are eligible can still take deductions for slate or local income taxes and personal property taxes. Extra care should be taken when using scheduled used to report capital gains and losses. There have been major changes. More deductions also have been shifted to schedule this year including a reimbursed business expenses from form 2106 and moving expenses that were previously reported on form 3903