Daily Press from Victorville, California • 44

i Business Sunday May 27 Daily Pruts Victorville D-1 DAILY PRESS -v iiitffij'j -fc Parents can help their children buy a home BY CHANGING TIMES For AP Newsfeotare not make mortgage payments The danger would be if the child ran into difficulties Should a lender foreclose for missed payments co-signers are liable for the difference between the principal loan amount and proceeds from the foreclosure sale Cash loans are another option If parents act as mortgage lenders for their offspring they should conduct the transaction in a businesslike fashion A mortgage loan from parents should include a legally recorded lien so kids can deduct the mortgage-interest payments The interest rate should be businesslike too because bargain-basement below-market loans get tough treatment from the Internal Revenue Service If parents charge 2 percent interest on a home loan the government will consider the difference between payments at that rate and payments on the same size loan at a minimum government-set rate to be a gift Unless the loan is a large one such a will likely be cov- See BUY D3 000 or more up front cause mortgage creditworthiness is based primarily on the income and debt load A secret agreement to repay parents can throw debt calculations out of whack and hang young homeowners with outsized liabilities And gift or not kids must still come up with part of the money On conventional loans a 5 percent down payment ordinarily must come from the own resources Parents can help with the rest LOANS There are a number of ways to make loans and not all of them involve cash Among the quickest easiest and most substantial loans a parent can make to a child buying a home is that of a good name and credit record By co-signing the mortgage a parent promises to pay the mortgage if the child cannot A parent is not automatically a co-owner of the house under such an arrangement and usually does Buyers may need $12 as you want without paying any federal gift taxes or filing any IRS forms You simply write the checks The rules get complicated when you give more than the $10000-per-year limit In addition to annual tax-free gifts everyone can transfer a total of $600000 to others (and an unlimited amount to a spouse) via lifetime gifts or bequests without worrying about the federal gift and estate tax Gifts beyond $10000 a year eat into that $600000 allowance The few states including New York North Carolina and Tennessee that levy gift taxes have their own rules which usually differ from the federal Check with a tax professional in your state before giving more than the $10000-peryear-per-person ceiling Lenders want assurances that a parental is just that and not a disguised loan be- A typical house today costs about $96000 With a 10 percent down payment and say $3000 in closing costs buyers need at least $12600 cash up front an amount out of the question for many couples An estimated one-fourth of would-be buyers have the income for monthly home payments but not enough cash for a down payment where parents come in They can give money as a gift provide a loan or share in the ownership in exchange for cash up front GIFTS The advantages of a gift are self-evident Kids get the money (and a brighter balance sheet) free and clear Parents benefit too because cash transfers can save estate tax and administration expenses later You and your spouse can each give up to $10000 per year per person to as many people Las Vegas Excalibur takes aim at Middle America Circus Circus Inc presents its latest and largest hotel By ROBERT MACY Associated Press Writer LAS VEGAS (AP) The company that carved a niche in this gaming capital for families and Middle America opens the largest hotel here next month The June 19 opening of the $290 million 4032-room Excalibur Hotel will marie a milestone for Circus Circus Enterprises Inc The $16 billion company which started with a struggling Strip hotel-casino 16 years ago has become the envy of the gaming industry with a unique strategy focusing on low-rollers rather than coveted high-rollers The giant castle at the south end of the glitzy Las Vegas Strip is the brainchild of gaming executive William Bennett who amassed a personal fortune of $500 million catering to families in a gaming largest with 3200 rooms But several hundred of those are dormitory rooms and are not considered commercial hotel space Bennett and a former partner William Pennington bought the Circus Circus hotel-casino in 1974 after the late billionaire Howard Hughes kept raising the ante on their first choice the Landmark Hotel Today the Landmark is struggling while Circus Circus has become an industry giant the time I thought the Landmark was the best of the two properties" Bennett said in a rare interview recently think I was wrong I lucked Bennett 65 owns 182 percent of the public company which had revenues of $52238 million last year When the Excalibur opens the parent Circus Circus company will have a total of 11320 rooms in Nevada including two hotels in Las Vegas one in Reno and two in Laughlin By comparison Atlantic 12 major hotels total 8100 rooms The Excalibur will give Las Vegas 75000 hotel rooms new room count will give Las Vegas almost twice that of 47000 rooms with Circus Circus-owned properties offering 11 percent of the total room base in Las Vegas" said Excalibur general manager Bill Paulos a Brooklyn native and graduate of the UNLV hotel school Even Bennett's vivid imagination have dreamed up the scenario that evolved from his purchase of Circus Circus He was forced because of the nature of the property to target families rather than high stakes gamblers- who frequented' most hotels here at the time When Bennett bought the original Circus Circus hotel-casino it was a gaming mishmash catering to high-rollers 'as well as families with kids was Bennett recalled had things mixed in with the gaping They had bumper cars where we now have the keno Vehicles at a busy Las Vegas Strip intersection are dwarded by the city is scheduled to open June 19 as the largest hotel The new 4032-room Bccalibur Hotel The latest addition to the gaming giant castle belongs to Circus Circus Enterprises Inc Midway games included one After settling for Circus Cir- in which players tossed balls at cus they built a separate mid-a target trying to knock a way section for kids away from scantilyr lad woman out of bed the gaming and provided free Bennett and Pennington circus acts wanted the Landmark but the The success of Circus Circus eccentric Hughes who owned has nudged Las Vegas toward The June 19 opening of the $290 million 4032-room Excalibur Hotel will mark a milestone for Circus Circus Enterprises Inc The Excalibur is anchored by four 28-story towers and covers 70 acres It will replace two other Las Vegas properties that have held the title of the largest hotel The Las Vegas Hilton held the record with 3174 rooms according to the Guinness Book of World Records That figure was eclipsed in recent weeks when the Flamingo Hilton opened a new wing giving that Strip resort-3530 rooms and brief claim to the title The new Mirage Hotel here just missed the mark with 3054 rooms Outside of Las Vegas the Rossiya Hotel in Moscow is the amphitheater will provide two dinner shows nightly Diners will feast without utensils on medieval flare An arcade will feature a dozen themed game booths such as archery There will be strolling minstrels in Arthurian garb and craft booths featuring activities such as glass blowing and glass etching Guests can wed in a Sherwood Forest-inspired wedding chapel A pair of motion simulator theaters will recreate an Olympic bobsled ride roller coaster runaway train and a frantic ride down an icy mountain road The resort will employ 4300 people Excalibur will not be as family-oriented but there will be plenty of things for everybody" Bennett said rooms will be more expensive It will be a more ostentatious setting a definite The Excalibur casino will offer gamblers higher limits and may provide gaming credit something that's taboo at Circus Circus The castle will be surrounded by 600 pine fruit and elm trees and 27000 flower boxes Some 500000 square feet of public entertainment space includes a Renaissance-era village 12 food outlets and a casino the size of four football fields with 2630 slot machines Shows will feature a medieval flair with live jousting The Great Hall a 900-seat The giant castle at the south end of the glitzy Las Vegas Strip is the brainchild of gaming executive William Bennett who amassed a personal fortune of $500 million catering to families in a gaming environment other family-oriented features transforming the gaming capital into a total resort destination The Circus Circus properties average $33 a night while the Excalibur will average $45 several Las Vegas hotels at the time raised the price from $15 million to $16 million then jumped it to $20 million Bennett and Pennington passed Health mantenance organizations: A new breed of said David Polk an assistant vice president for marketing in the employee benefits division of the Aetna Life and Casualty Co in Hartford Aetna is one of the insurance companies organizing the networks others are Cigna and Prudential Insurance about 25 percent of them in California Interstudy reported Some consumers younger workers or those with several children are pleased with which offer benefits such as preventive medical care Sarah Marmor Labarthe 24 a paralegal who lives in New N6W These new networks which are being called preferred-provider organizations managed-care programs or hybrid HMO's will let employers track both spending and treatments much more closely covenne rgfe fhuafaajnd and children $380 aged-care programs or hybrid will let employers track both spending and treatments much more closely For consumers the plans may be a mixed blessing On the positive side they provide more flexibility than because employees can use doctors who do not belong to the network and still have the program pay part of the cost But because companies will rate the programs partly on the basis of cost health experts worry care quality may suffer scares said Dr David Brook the deputy director of the health services program for Rand Corp in Santa Monica Calif are unleashing very powerful financial incentives without aiiv StmriarrR" Any shift in employee health plans is likely to have broad impact Of Americans under the age of 65 who have health coverage 3 of 4 receive it through an employer according to the Health Insurance Industry of America a trade group "There is tremendous est by companies in these kinds By BARRY MEIER NY Times News Service Already beset by a confosing system of health care consumers are now being offered yet another medical plan a reinvented health maintenance organization In the past three years several of the biggest employers among them the American Telephone and Telegraph Co Allied-Signal Inc and Southwestern Bell have been working with insurers to create networks of physicians and hospitals for their Atunloyees to use The reason is simple: control over the services that doctors perform for employees and their families means lower costs for the companies But some medical experts fear the new programs represent a forther emergence of cost as the chief criterion for determining employee health care As with the new net-which are being organized for 'Gfe employers by in- expenses M0 The trend toward hybrid programs comes amid slowing consumer interest in Laditional Between June 1988 and July 1989 new enrollments in traditional rose by only 36 percent the smallest annual gain since 1976 when such statistics were first collected according to Interstudy a health care research company in Minneapolis There are about 325 million 1IMO members nationwide York City said her HMO me of the type of clinic that I used to go to at But the medical care of these younger and generally healthy workers may cost less than the fiat enrollment fee making the HMO program a poor investment for the employer Older workers whose medical costs run high enough that they more than offset such fees have tended to be unwilling to give up their own doctors or See HMO D3 NY TknM Naw dures or recommending cialists Some programs reward tors financially for lim services and costs These new networks are being called prefer provider organizations i surance companies come in varied forms Some use established HMO clinics and doctors while others rely on networks of physicians who act as consulting with insurers before undertaking medical proce-.