Key to Getting Raise: Practice, Practice, Practice
Q: The anniversary of my second year on the job is fast approaching and I don’t want this one to pass without getting the raise I think I deserve.
Last year, I asked for 15% and got just 7%. This year, I want to make sure that my work and my value to the company are recognized and I want to set the tone when I go into the salary talks.
Are there coaches who specialize in helping women prepare for salary negotiations? --M.B.
A: No doubt any one of the many executive search firms could offer you the advice you seek. But it would be very expensive advice. Why not get one or more of the many books on the subject and practice your pitch with a friend or trusted colleague? Not only is this course of action effective, but it won’t cost you as much as--or even more than--the raise you’re seeking.
According to my advisers, among the best on the subjects of salary negotiation and corporate ladder-climbing are: “Games Mother Never Taught You . . . Corporate Gamesmanship for Women,” by Betty Lehan Harragan, published by Warner Books; “You Can Negotiate Anything,” by Herb Cohen, published by Bantam; and “Skills for Success . . . A Guide to the Top for Men and Women,” by Adele Scheele, published by Ballentine. You can find several more books in the business reference section in the public library and any bookstore.
After doing your basic research, draft your sales pitch and get a partner to play the role of the person to whom you will be making your presentation. Practice your conversation, anticipating the questions you are likely to get. Be prepared for any objections that might be raised, including the current favorite here in L.A.: the lingering California recession. The more practice you get, the more comfortable and natural you will appear in your presentation. Good luck.
Prices of Antiques Now Ancient History
Q: Some 35 years ago, my wife and I started collecting antiques with the thought that we might someday start a small antique shop. Well, we’re ready to open our business but have run into a problem: We have no idea what we paid for some of the items we now hope to sell. How can we compute our profits in a way that will satisfy the Internal Revenue Service? --T.E.
A: You’re right: You do have a problem. And, according to the IRS, the burden of proof is on you to produce some sort of reasonable evidence to support your computation of your business profits.
Not having any records of your purchases puts you at a distinct disadvantage in meeting this obligation. But it shouldn’t prove completely overwhelming.
If you can determine when you purchased the items in question, perhaps antiques catalogues from that year could help you establish what you might have paid.
Another method, suggests one of our advisers, would be to determine how much items of a certain type have increased over a certain period of time and adjust the value of similar goods in your shop by that percentage. Again, periodicals and other books aimed at antique collectors should help establish how much prices of certain collectibles have risen over the years.
Your real goal here is to make the most reasonable and supportable case you can to establish the costs you ultimately assign to the goods in question. The IRS is not terribly sympathetic to taxpayers who can’t document their cases, and the burden is on you to convince them that you have used a rational method to assign a correct cost to your inventory.
Split of Profits OK But Not Exemption
Q: I am a joint-tenant owner of my house with another man who is 55 years old. May we sell the house and let him claim his $125,000 exemption on the profits, allowing me to save my $125,000 exemption until I turn age 55? --S.R.P.
A: As unmarried joint tenants in a principal residence, each of you qualifies for a $125,000 exemption on the profits from your home sale. However, to exercise this exemption, you must be age 55 and have lived in the house for three of the last five years.
You may not use your exemption until you turn age 55, regardless of what your housemate does. If he chooses to use his when you sell your current residence, he may apply his exemption only to his share, or 50%, of the profits. If your total profits exceed $250,000, then he would be able to expend his entire exemption. If the profits are less than that amount, he can still apply his exemption to them. But any unused portion is forever lost. You would be required either to pay taxes on your half of the profits or roll them over into the purchase of a new residence.
Without knowing the profits you expect to realize on the sale and whether your housemate intends to purchase another principal residence, it is difficult to offer advice. However, if your profits are considerably less than $250,000 and he expects to purchase another home that could appreciate in value over the years, he might consider waiting to use his exemption at a later date. In this case, by waiting, he might be able to make fuller use of the exemption.
