In Brief

By Eric Roston

PENSION BREAK Why is the IRS simplifying the Byzantine rules that govern how much money retirees need to take from their pension fund each year? To be nice. And to ensure that they pay taxes on money from an IRA, 401(k) or other plan. Retirees must now calculate and report to the IRS a yearly minimum. But the new rules should also lower the withdrawal, and hence the tax paid.

Required minimum IRA distributions Calculated on $100,000

Minimum Remaining Age Divisor Withdrawal Total

70 26.2 $3,816.79 $96,183.21 71 25.3 3,801.71 92,381.50 72 24.4 3,786.13 88,595.37 73 23.5 3,770.02 84,825.35 74 22.7 3,736.80 81,088.55 75 21.8 3,719.66 77,368.89 80 17.6 3,565.33 59,184.42 90 10.5 2,836.72 26,948.80

CAPITAL IDEA While legislators mull over President Bush's income tax proposal, 1997's capital-gains cut is still kicking in. Taxpayers with gains in the 15% bracket--that's single filers whose taxable income in 2001 falls under $27,050, and couples under $45,200--will now be required to pay an 8% tax on any investments sold after five years--a two point drop. People in the 28% and higher brackets will eventually see a similar drop, to 18% from 20%, but only on investments bought after Jan. 1, 2001, and held for at least five years.

MOVE IT The 1997 tax law allows individuals who sell their principal home to gain up to $250,000 (twice that for couples) tax free every two years. Instead of trading up to pricier homes, many boomers now warming empty nests can move into less expensive abodes without a tax penalty. That's one reason for the probable record sales of condominiums in 2000. Another: their Gen-X kids who have flown the coop are starting to buy places of their own.

--By Eric Roston