THE MARKETS:

June has been a negative month for the equity markets. For the month, the S&P 500 is down 8.7% and the Russell 2000 is down 6.19%. For the quarter, the S&P 500 is down 3.35% and the Russell 2000 is up 1.84%. The Dow Jones AIG Commodity Index is up 9.59% for the month and 27.8% for the year. This is a “long only” index which can be volatile and about which many investors are wary (“How high can it go?”). It has been having an extraordinary run during this bearish equity market.

CHARITABLE GIVING: According to the Giving USA Foundation, charitable giving in the United States reached a record $306.4 billion in 2007. Giving rose 3.9% last year. Charitable giving was 2.2% of gross domestic product for 2007. Individual giving was an estimated $229 billion, or 74.8% of the total estimated giving in 2007, an increase of 2.7% (a drop of 0.1% when adjusted for inflation).  Corporate giving increased by 1.9% to $15.69 billion, representing a decline of 0.9% when adjusted for inflation. Grants made by foundation rose 10.3% in 2007, or 7.3% when adjusted for inflation.  Charitable bequests increased by 6.9%, or 4% adjusted for inflation. In the last five recessions since 1973, giving fell an average of 1.3% adjusted for inflation.

MID-YEAR ADJUSTMENT ON MILEAGE DEDUCTION: 

The Internal Revenue Service announced an increase in the optional standard mileage rates for the final six months of 2008. Taxpayers may use the optional standard rates to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes. The rate will increase to 58.5 cents a mile for all business miles driven from July 1, 2008, through Dec. 31, 2008. This is an increase of eight (8) cents from the 50.5 cent rate in effect for the first six months of 2008.  The IRS normally updates the mileage rates once a year in the fall for the next calendar year.

“HEART”: On June 17, 2008, the Heroes Earnings Assistance and Relief Tax Act of 2008 (“HEART”) was signed into law. HEART had been unanimously passed by both the U.S. House of Representatives and Senate. Among the many provisions designed to enhance the financial well-being of armed service members serving in a combat zone were: 1) Military compensation (up to the maximum enlisted service member’s pay) earned in a combat zone will be excluded from service members gross income; 2) A service member may also exclude compensation, for up to two years following service in a combat zone, earned while hospitalized from wounds, disease, or injuries incurred during service in a combat zone, and 3) The Working Families Tax Relief Act of 2004, allowed a service member to treat combat pay as earned income for purposes of the earned income credit. HEART makes this law, which expired on December 31, 2007, a permanent tax code provision.

This information has been provided by my good friend Doug MacGray.  Doug is a Certified Financial Planner and if you would like to speak with Doug, please give me a call (John Thomas) at 302-368-7132.

If you would like to apply for a Mortgage Loan, you can APPLY ONLINE HERE, you can call John Thomas at 302-703-0727.

John R. Thomas – NMLS 38783

Certified Mortgage Planner – Primary Residential Mortgage, Inc.

302-703-0727 DE Office / 610-906-3109 PA Office / 410-412-3319 MD Office

248 E Chestnut Hill Rd, Newark, DE 19713