Irs Continues To Help Hurricane Katrina Victims

The IRS is often bashed as being unfriendly to taxpayers. In many cases, this reputation is deserved. In relation to Hurricane Katrina victims, it is certainly not.

As is well-known by now, the federal government did its best Keystone Cops imitation following Hurricane Katrina. Frankly, the action or lack thereof was disgraceful. It is somewhat ironic given this fact that one government agency acted swiftly, effectively and with common sense to help the victims of the tragedy. To the surprise of many, that agency was the IRS.

You might wonder how the IRS could possibly help those devastated by the hurricane? In a number of ways. The first step taken by the agency was to extend all tax deadlines out by a year or more. The agency also temporarily terminated all federal gas taxes on diesel fuel in an effort to provide relief to the fuel shortage. What many do not understand is some of these 'dirty diesel? taxes effectively bar the use of such fuel by trucks. By waving the tax, the IRS opened up an entirely new fuel source to help get trucks moving again.

The IRS then took the extraordinary step of trying to educate taxpayers on how they could claim their losses from the hurricane on previously filed tax returns by amending those returns. Yes, the IRS effectively taught people how to go back and pull large amounts from their previously filed tax returns and how to do so quickly. This, of course, put money in their pockets within 30 to 60 days, which compares favorably to FEMA and the rest of the federal government efforts.

Two years after Hurricane Katrina, it would be reasonable to expect the IRS to view the events as being at an end. This, of course, would lead to a situation where victims of the hurricane are required to get back on the tax horse if you will. In truth, the IRS continues to show surprising compassion and flexibility.

The agency has just announced it is extending by one calendar year the time victims of Hurricane Katrina have to sell off vacant land and avoid paying a tax on the gains. The normal time period is two years, which is a rather lengthy period. Given the devastation and slow state of reconstruction in the Gulf region, the IRS is displaying what many did not foresee ? compassion. If it continues to take steps like this, it might just ruin its reputation!

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Probable Loss And The Law Of Large Numbers

A Large, Homogeneous Group of Exposure Units

To facilitate the prediction of the probable loss through use of the law of large numbers, it is essential that there be a large number of similar units exposed to the same peril. If a company can insure only ten houses against damage by fire, very little prediction is possible. As noted in the discussion of the degree of risk, the larger the number of units involved, the less deviation there will be in the actual experience.

It is absolutely essential that there be a large group of exposure units. Not only is a large group of units necessary, but the units must be similar. In fire insurance, there must be a large number of similar properties. It is not possible to predict losses if the subjects for insurance present a hodgepodge of structures of various constructions, usages, and values. In life insurance, there must be a large number of persons in each age, health, and occupational classification.

Definite Loss

The loss must be difficult to counterfeit. Death, perhaps, comes closest to perfection in meeting this requisite. Death is so difficult to feign that few insureds will attempt it which is a big reason why so many different types of life insurance are available. Only in cases in which the insured has disappeared can there be a suspicion of something other than death. In sickness insurance, however, it is sometimes difficult to tell if a loss has occurred. During the depression, it was found that sickness claims greatly increased.

Persons who could not find jobs either worried themselves sick or else, in order to collect benefits, decided to say they were indisposed. Inability to distinguish between real and fraudulent claims was in part responsible for the receivership of several insurance companies which wrote extensive amounts of disability insurance during the 1920's and the 1930's.

Disability insurance contracts today are much less liberal on the average than they were thirty years ago because of the adverse experience the companies had in those trying days. Companies are more careful both as to the kinds of disability contracts they will write and as to the people for whom they will be written.

Accidental Loss

The loss must not only be definite, but it must have been accidental, as distinguished from expected. Ideally, the loss should be beyond the control of the insured. Depreciation losses, for example, are uninsurable, since there is nothing accidental about their occurrence. Or if someone is killed in an unexpected accident at a younger age than expected, there are certain life insurance policies that compensate for that kind of tragedy.

These losses are expected. Also, when mercantile theft insurance is written, normal shoplifting losses are not covered. In credit insurance, normal credit losses are not covered; only the unexpected losses are insured. Death meets this requisite because, although death is certain, the time of death is uncertain.

Large Loss

The hazard to be insured against must be capable of producing a large loss which the insured could not pay without economic distress. Insurance against breakage of shoestrings is unknown. The loss involved is so small that it is not worth the time, effort, and expense to enter into an insurance contract to indemnify the loss. (And insureds would likely be furious at the company, since most shoestring breakage is due to wear and tear, which would not be covered by the policy.)

This example is a reductio ad absurdum, of course; but it illustrates the principle. There are, nevertheless, many coverages sold which insure small losses. Hospital policies which promise benefits of less than $150 although costing $15 a year are certainly in the small-loss class for many persons.

Automobile towing charges, with limits of $10 per disablement, seem to most insureds to involve such small losses as to make insurance inadvisable. It is uneconomic for a person to insure the small losses which he can very easily pay himself, for the cost of insurance includes not only the loss cost but also a rather substantial margin for expenses.

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How To Become A Successful Stock Trader?

Stock trading is a profitable but risky practice. Stock traders can make profits amounting to millions of dollars from the market and also lose the same in a very short time. Stock trading is not for everyone, it is ideal for those with high risk tolerance, for individuals who can analyze the happenings correctly and make quick decisions.

You can find hundreds of pages on the internet detailing how to become a successful stock trader, offering tips such as diversification/specification, good stock screening/technical and fundamental analysis, position sizing, finding a suitable broker and system, minimizing risks, taking calculated risks, being patient, proper money management and trading discipline, avoiding greed, and so on. Here are some basic factors which make a successful stock trader recognizable from an inexperienced/amateur stock trader.

Success in stock trading depends on learning some market basics, including:

1. No trader can accurately predict the market, because no one can analyze all the forces and factors at one time.
2. The major force existing in the market is uncertainty; there is always a chance of some eventuality happening or not happening. There is also a chance of unexpected developments.
3. Traders calculate and bet on the greatest possibility of a certain development, with respect to the market/trading knowledge and market information they have.
4. You do not have to beat all others to be successful; you just have to beat some of them.

Both successful and other stock traders often make the right trading decisions with respect to the greatest possibility. Successful traders then hedge against all other prominent possibilities, but inexperienced traders often forget to do so.

Good stock traders are always careful to monitor the market trends and possibilities, to recalculate the possibilities and to make trading decisions with respect to a new scenario. But inexperienced traders make decisions which they think are right and stick with those, no matter what happens in market. They are very confident regarding the decisions they make until they suffer loss.

Market timing is another major factor contributing to trader success. Good traders make the right decisions at the right time. They enter and exit trades whenever the market possibility changes to/against their favor. But inexperienced traders make early or delayed decisions; and many of them want to follow the flow rather than make a flow.

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How To Become A Successful Stock Trader?

Stock trading is a profitable but risky practice. Stock traders can make profits amounting to millions of dollars from the market and also lose the same in a very short time. Stock trading is not for everyone, it is ideal for those with high risk tolerance, for individuals who can analyze the happenings correctly and make quick decisions.

You can find hundreds of pages on the internet detailing how to become a successful stock trader, offering tips such as diversification/specification, good stock screening/technical and fundamental analysis, position sizing, finding a suitable broker and system, minimizing risks, taking calculated risks, being patient, proper money management and trading discipline, avoiding greed, and so on. Here are some basic factors which make a successful stock trader recognizable from an inexperienced/amateur stock trader.



Success in stock trading depends on learning some market basics, including:

1. No trader can accurately predict the market, because no one can analyze all the forces and factors at one time.
2. The major force existing in the market is uncertainty; there is always a chance of some eventuality happening or not happening. There is also a chance of unexpected developments.
3. Traders calculate and bet on the greatest possibility of a certain development, with respect to the market/trading knowledge and market information they have.
4. You do not have to beat all others to be successful; you just have to beat some of them.

Both successful and other stock traders often make the right trading decisions with respect to the greatest possibility. Successful traders then hedge against all other prominent possibilities, but inexperienced traders often forget to do so.

Good stock traders are always careful to monitor the market trends and possibilities, to recalculate the possibilities and to make trading decisions with respect to a new scenario. But inexperienced traders make decisions which they think are right and stick with those, no matter what happens in market. They are very confident regarding the decisions they make until they suffer loss.

Market timing is another major factor contributing to trader success. Good traders make the right decisions at the right time. They enter and exit trades whenever the market possibility changes to/against their favor. But inexperienced traders make early or delayed decisions; and many of them want to follow the flow rather than make a flow.

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