Medtronic’s Acquisition Causes Anxiety Among Shareholders

Medtronic, the world’s largest medical technologies company, recently made headlines when the Minneapolis-based company bought the Irish healthcare products company, Covidien, for nearly $43 billion.

The purchase, according to Medtronic executives, will enable the company to invest more aggressively, cut back taxes drastically, and thus create a bigger profit for shareholders—but the investors themselves have not been so quick to celebrate.

See, Medtronic allowed the foreign company to keep a 20% stake in the merger in order to keep the majority of its profits overseas free from American taxes. This move, called an inversion, qualifies as a “taxable event,” and the company’s shareholders are the ones left with the bill—as much as 33 cents on the dollar.

Medtronic urges shareholders, especially individuals, to remain patient as the long-term benefits of the recent acquisition begin to emerge. But this promise hasn’t satisfied everyone. The repercussions of this transaction are complicated, and many … Read More

The IRS Dirty Dozen

Each year, the IRS releases a list of the 12 most common scams that taxpayers may encounter during tax season. Here’s a run-down of the top scams of 2014 and how you can protect yourself.

1. Identity theft

How it works: Someone gets ahold of your personal information—such as your social security number—and commits fraud in your name. They may even file a tax return in your name to get a refund.

How you can protect yourself: Keep your info private by using encrypted passwords online and shredding personal paperwork when you no longer need it. If you think your identity has been stolen, contact the IRS Identity Protection Specialized Unit at 800-908-4490.

2. Telephone scams

How it works: Callers pretend to be from the IRS in order to steal money and personal information. They often say that you owe money and may be arrested if you don’t pay.

How you … Read More

Fixed-Rate or Adjustable-Rate Mortgage: Which is Right for You?

 

New neighbors Bob and Sam moved onto a quiet block in South Minneapolis around the same time in 2004. Their homes, which sit across the street from one another, are close in value—each sold for about $200,000—and both Bob and Sam made a 10% down payment.

About ten years after moving in, Bob and Sam began chatting about their homes at a neighborhood barbecue. The subject of mortgage payments came up, and Bob was floored to learn that Sam’s were considerably less. In fact, after punching in a few numbers on his calculator, Bob realized that over the course of the last decade, he had paid almost $24,000 more than Sam on interest and principal payments.

How did Sam get so lucky? When he bought his home in 2004, he opted for an Adjustable-Rate Mortgage (ARM) instead of the standard fixed-rate mortgage. This meant that his interest rate varied over … Read More