THE SAUGUS ADVOCATE – FRIDAY, OCTOBER 8, 2021 Page 19 The COVID-19 Update Town reports 60 newly confi rmed cases over the past week, according to town manager By Mark E. Vogler T he number of newly confirmed COVID-19 cases reported yesterday by the town over the last seven days was 60 – a 13 percent increase over the previous week, according to Town Manager Scott C. Crabtree. The recently confi rmed COVID cases raised the number of total cases to 4,871 since March of last year, Crabtree said in a press release yesterday. There have been 423 new cases over the past six weeks – an average of 70.5 per week. Meanwhile, there were no COVID-related deaths in Saugus over the past seven days, leaving the death toll linked to the killer virus at 79. “Our hearts and prayers go out to those families aff ected by this health pandemic.,” Crabtree said. “YOUR FINANCIAL FOCUS” JOSEPH D. CATALDO PARTNERSHIP AND S CORPORATION COST BASIS RULES upon sale of a partnership interest or stock in an S Corporation. Generally speaking, contribuC ost basis aff ects the tax consequences of many transactions to partners and S Corporation shareholders. Many businesses are conducted as partnerships or S Corporations. The function of a partner’s or shareholder’s cost basis in the entity and the importance of keeping track of it is as follows: 1. Determining how much a partner or shareholder may withdraw from the entity without recognizing any gain 2. Determining the allowable loss of the entity in any given taxable year the partner or shareholder is entitled to claim on his or her tax return. (Remember, these entities are fl ow-through entities. The profi t or loss is passed through to the individual partner or shareholder to be reported on Form 1040). 3. Determining the gain or loss GRABOWSKI | FROM PAGE 10 was acting inappropriately toward a staff member of the School District,” School Committee Member John Hatch said of the alleged incident that happened before the Sept. 23 School Committee meeting. Hatch said he observed Grabowski request to meet with a school district offi cial in the hallway before the NOT WELCOME | FROM PAGE 8 a problem, and every community has this problem,” Wong said. “We have to fi nd a solution – not pass it on to another community like Boston is trying to do,” he said. “They should be taking care of their own problem like we do ours,” he said. tions to capital in increase cost basis, withdrawals decrease cost basis, profi ts increase cost basis and losses decrease cost basis. Each year, a partner’s or shareholder’s cost basis needs to be updated taking these factors into consideration. When a partner or shareholder withdraws more than his or her investment in the entity, there will be tax consequences. If, for example, a partnership has a $50,000 profi t for the year and each of the two partners withdraw $25,000, each partner will report $25,000 of income on his or her tax return. If each partner also withdraws $25,000, there would be no tax to be paid on the distribution itself. Each partner would report $25,000 of his or her share of profi t of the entity. This serves to increase the partner’s cost basis. The withdrawal decreases the partner’s cost basis by the same amount. Therefore, the net eff ect on the partner’s cost basis for the taxable year is zero. The partner does not pay taxes on both the $25,000 share of partnership income as well as the withdrawal of $25,000. If a 50% partner or shareholdmeeting. Shortly after, Hatch said, he noticed that Whittredge “was very upset” with the way that Grabowski dealt with the school offi cial. Whittredge consulted with the School Committee’s attorney before deciding that this week’s meeting should be held via Zoom instead of in person. “It’s very upsetting that we have to have this type of disSaugus Police Chief Michael Ricciardelli complained that there hadn’t been an impact study conducted before the plan was initiated and those who initiated never contacted Saugus police. “This isn’t just a Revere problem. It’s definitely going to be a Saugus problem,” Chief Ricciardelli said, noting that part of the Quality Inn er contributes $10,000 in capital upon the formation of the entity, and his or her share of the entity’s loss during the year is $15,000, his or her allowable loss would be limited to $10,000. The remaining unallowed loss of $5,000 would be carried over to the following year. If the entity generates a profi t of $10,000 during the following year, the partner or shareholder will be able to off set his or her $5,000 share of the profi t with the unused carryforward loss of $5,000. One key diff erence with S Corporations and partnerships is that a partner’s cost basis will be increased by his or her share of partnership debt. A Shareholder in an S Corporation will increase his or her basis only by actually lending money to the corporation. Even recourse debt does not increase a shareholder’s cost basis in the corporation. If a partnership has significant losses during a particular year, third party loans taking out by the partnership will provide additional cost basis to the partners thereby allowing them to deduct losses in excess of their actual contributions to capital. In these situations, this can be a big advantage of a partnership over an S Corporation. traction when there are so many good things going on in the schools,” Hatch said. “But we have to make sure that everybody who comes to a School Committee meeting is comfortable and safe. We have to make sure we do the right thing for the school district. So, we felt it was the right thing to do – to go back to Zoom,” he said. property lies within the Town of Saugus. “A lot of people bought some pricey houses in that area, and they didn’t sign on for this,” the chief said. Ricciardelli said the proposal would drain the limited resources of Revere and Saugus, increasing crime problems in the two communities. Sa Sen i r H D Sil S it Wk ior Sa a y Senior Senio BY JIM MILLER How Does Social Security Work When a Spouse or Ex-Spouse Dies? Dear Savvy Senior, Who qualifies for Social Security survivor benefits? My ex-husband died last year, so I would like to fi nd out if me or my 17-year-old daughter are eligible for anything? Divorced Survivor Dear Divorced, If your ex-husband worked and paid Social Security taxes and you and/or your daughter meet the eligibility requirements, you may very well be eligible for survivor benefi ts, but you should act quickly because benefi ts are generally retroactive only up to six months. Here’s what you should know. Under Social Security law, when a person who has worked and paid Social Security taxes dies, certain members of that person’s family may be eligible for survivor benefits including spouses, former spouses and dependents. Here’s a breakdown of who qualifi es. Widow(er)’s and divorced widow(er)’s: Surviving spouses that were married at least nine months are eligible to collect a monthly survivor benefi t as early as age 60 (50 if disabled). Divorced surviving spouses are also eligible at this same age, if you were married at least 10 years and did not remarry before age 60 (50 if disabled), unless the marriage ends. How much you’ll receive will depend on how much money (earnings that were subject to Social Security taxes) your spouse or ex-spouse made over their lifetime, and the age in which you apply for survivor benefi ts. If you wait until your full retirement age (which is 66 for people born in 1945-1954 and will gradually increase to age 67 for people born in 1960 or later), you’ll receive 100 of your deceased spouses or ex-spouses benefi t amount. But if you apply between age 60 and your full retirement age, your benefi t will be somewhere between 71.5 – 99 percent of their benefi t. There is, however, one exception. Surviving spouses and ex-spouses that are caring for a child (or children) of the deceased worker, and they are under age 16 or disabled, are eligible to receive 75 percent of the worker’s benefi t amount at any age. Unmarried children: Surviving unmarried children under age 18, or up to age 19 if they’re still attending high school, are eligible for survivor benefi ts too. Benefi ts can also be paid to children at any age if they were disabled before age 22 and remain disabled. Both biological and adoptive children are eligible, as well as kids born out of wedlock. Dependent stepchildren and grandchildren may also qualify. Children’s benefi ts are 75 percent of the worker’s benefi t. You should also know that in addition to survivor benefi ts, a surviving spouse or child may also be eligible to receive a special lump-sum death payment of $255. Dependent parents: Benefi ts can also be paid to dependent parents who are age 62 and older. For parents to qualify as dependents, the deceased worker would have had to provide at least onehalf of the parent’s fi nancial support. But be aware that Social Security has limits on how much a family can receive in monthly survivors’ benefi ts – usually 150 to 180 percent of the worker’s benefi t. Switching Strategies Social Security also provides surviving spouses and ex-spouses some nice strategies that can help boost your benefi ts. For example, if you’ve worked you could take a reduced survivor benefit at age 60 and switch to your own retirement benefi t based on your earnings history – between 62 and 70 – if it off ers a higher payment. Or, if you’re already receiving retirement benefi ts on your work record, you could switch to survivors benefi ts if it off ers a higher payment. You cannot, however, receive both benefi ts. You also need to know that if you collect a survivor benefi t while working, and are under full retirement age, your benefi ts may be reduced depending on your earnings – see SSA. gov/pubs/EN-05-10069.pdf. For more information on survivor benefi ts, visit SSA.gov/ benefi ts/survivors. Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit SavvySenior. org. Jim Miller is a contributor to the NBC Today show and author of “The Savvy Senior” book. nior

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