Tuesday, April 17, 2007

Should we continue paying?

My parents policies are among the 3,052 polices that were voted upon to be kept. It really didn’t matter how my parents voted. The decision to keep, to sell, or dispose of the policy was said to have been determined by the majority vote of the investors owning each policy. I am not aware if any of the actual voting results were ever made available to any investor. Last fall, my parents started receiving annual administration fee invoices ranging from around $177 to $190. The admin fee consists of $175 per investor and the investor’s pro-rata portion of a $195 policy fee. If you divide the $195 by the pro-rata share shown on your invoice you may get a rough estimate of the number of investors owning this policy assuming each investor purchased a similar percentage. So far, my parents have received their premium round 1 invoices for seven policies, all due before the end of June 2007 totaling just over $35,000. The invoice specifies a definite payment due date, a definite payment amount, and a definite period of time that the payment represents (To include reimbursement of payments made on the investors’ behalf by the receiver). It also lists an estimated annual premium payment that the investor must make on future payments. To me, I feel that there are problems in two areas. First, the amount of Premium Payment Round 1 for the payment period stated can only be achieved if all investors make their payments. I am almost certain that some investors will not be able to pay these expenses and others may decide not to chance “throwing good money after bad” and forfeit their interest in the policies. If the receiver or VSI had provided information on the number of investors for each policy and the percentage of the vote to keep, investors thinking about trying to save at least part of their investment would have been able to estimate the probable cost of the second round payment and plan accordingly. I also have a problem with the estimated annual premium as shown. All of my parents’ policies are universal life policies, where the annual premiums go up each year. The estimated annual premium costs for several years forward needs to be provided so that a more accurate idea of future money needs can be computed.

1 comment:

True 165 said...

Anyone who lost their ability to collect on the loss for not keeping up with the insurance premiums should contact me immediately about how this loss can now directly affect your 2007 tax return.

I also sent a letter to the receiver to see if he'd share this information with others.

I don't have the names of the investors and no way to distribute this information, maybe this blog can help.

Steve Mead
Senior Consultant
JK Harris 165 Services
1-800-830-7617 (Ext. 229)
smead@165services.com
www.165services.com

NO OBLIGATION FOR THE CALL

Frequently, the tax benefit we specialize in creates more recovery through tax refunds over any efforts by a receiver.

Curtis Miner, Esq.
Colson Hicks Eidson
255 Aragon Avenue 2nd Floor
Coral Gables, FL 33134

October 10, 2007

Dear Mr. Miner,

Excerpted from your website:

Q. My investment is stuck in the Receivership. May I take a tax write-off for the investment as a loss?
A. The Receiver is not able to provide investors tax advice.

Is it possible the receivership could lead the investors to advice about their income tax options? Here is an example of a Receiver's efforts in an unrelated case; tailored as an example for the Mutual Benefits, et al. injured taxpayers.

Dear Investors,

Many of you have requested information concerning the tax ramifications of your investment into Mutual Benefits. Certain Investors may qualify for an accelerated deduction treatment under the Internal Revenue Code § 165, which allows fraud victims to lower their tax bills by claiming theft losses. If you qualify, you can potentially write off the Mutual Benefits losses and recapture taxes from previous years.

We are providing investors with a link to JK Harris 165 Services website. JK Harris 165 Services, as well as any other qualified tax professional, may be able to assist you in filing for this special tax treatment.

Please note, the Receiver and his staff are not affiliated with JK Harris 165 Services and do not derive any benefit for their services rendered in any capacity whatsoever. The information being provided herein is solely for the purpose of informing investors of this possible tax advantage.

Please remember that the Receiver and his staff are not qualified to answer your tax questions and request that you not contact our office for tax advice. You are strongly urged to seek the advice from your own tax advisor concerning this matter.

To read more information about IRC § 165 from JK Harris 165 Services website, please click the following link:
www.165services.com.