Sunday, January 29, 2012

Jolie-Pitt Kids Tell Dad Brad: "Get Mommy a Ring!"

By Zach Johnso

Credit: Steve Granitz/WireImage

Brad Pitt may finally be ready to make an honest woman out of Angelina Jolie.
In an interview with CBS Sunday Morning (airing January 29), the Academy Award nominee says his six children are begging him to propose to In the Land of Blood and Honey director Jolie, 36.

"We're getting a lot of pressure from the kids," Pitt, 48, says. "It means something to them."
Pitt admits he hasn't "been very good" at explaining why he and Jolie have put marriage on hold since first becoming a couple in 2005. "We will someday. We will," Pitt promises. "That's a great idea."

When his brood of six -- Maddox, 10, Pax, 8, Zahara, 7, Shiloh, 5, and Knox and Vivienne, 3 -- asked him to "get mommy a ring," Pitt vowed: "Okay, I will! I will."
The Moneyball and Tree of Life actor adds that he's always been mindful of his children's desires -- especially when it pertains to his busy work schedule.

"You have less time to spend on a project," Pitt explains. "You come home and you're Dad. You're much more conscious of how much time you give to a production."
Pitt's full interview on CBS Sunday Morning airs January 29.

Tuesday, January 24, 2012

Designer Vera Wang Stuns in Swimsuit at 62

Vera Wang defies age in the February issue of Harper's Bazaar. Douglas Freidman/Harper’s Bazaar

You probably already know that Vera Wang is a famous fashion designer, best known for her dazzling (and often outrageously expensive) bridal gowns. But you probably have no idea how old she is ... and if you had to figure it out by looking at her, your guess would probably begin with the number four.
Turns out the fashion mogul is actually 62 years old, but you'd never believe it from the recent photo shoot she did with Harper's Bazaar where Wang shows off her sleek and swanky new Beverly Hills home as well as her slim figure in a strapless swimsuit.

Spring 2012: Backstage Beauty Secrets

The designer in her new kitchen. Douglas Freidman/Harper’s Bazaar

"I am not the sort of woman who would wear high heels with a bathing suit. Let's get that straight right now," she says in the magazine's February issue. Well, with a body like that, she should be!
Jean Queens
While Wang insists she's still very much a New Yorker, she explains in the interview that she purchased her new 90210 abode (which once belonged to Burt Reynolds) last summer as a "zen escape."

Wang poses in front of her sleek new L.A. home. Douglas Freidman/Harper’s Bazaar

"New York for me is about work. If L.A. were to become a West Coast version of that, I'd shoot myself," says Wang. "The climate, the lifestyle — it really fits as the yin to my New York yang."

What designer's home would be complete without a gigantic closet?

What fashionista's home would be complete without a gigantic closet? Douglas Freidman/Harper’s Bazaar

But it was the home's billion-dollar view of the entire city that eventually sold her on the home -- the same view that serves as the backdrop in the poolside photo she still can't get over submitting to, especially considering her usually covered-up style.
La Dolce Rita
"I wanted to wear a corset from [fellow designer] Alexander Wang, whom I like a great deal. I was thinking it would be over a legging or a boyish short, but the next thing I knew, I was there in a swimsuit," she laughs, explaining her initial intentions for the picture. "The funny thing is that I'm the girl who no one sees at the beach. Ask anyone who's traveled with me. Normally, I'm in so many layers, I look like Lawrence of Arabia!"
The Best Red Lipstick for Every Age

Wang, in her usual, more covered-up style. Douglas Freidman/Harper’s Bazaar

More Celebrity Features on Yahoo!:

Thursday, January 19, 2012

Boosting Mom’s Social Security Payments

When a Divorce Pays Off

By Ellen E. Schultz

Is your mother getting shorted on her Social Security payments?

If she is divorced or has been married more than once, or her late husband delayed taking Social Security, she might be entitled to a bigger monthly benefit than she is collecting. That can be important news for someone with a fixed or limited income.

If you are one of the thousands of baby boomers who help their parents with their finances, reviewing their Social Security benefits ought to be at the top of your list.

[More from WSJ.com: Are Your Parents Sponges?]

These days, couples getting divorced likely will hear about the ins and outs of how their Social Security will be affected, often from an attorney or accountant. But people who divorced years—or even decades—ago usually have no clue. This may include your parents.

The rules apply to both genders, but because women typically earn less over their working lives than men, they are more likely to be collecting lower benefits than they might be eligible for based on the earnings history of a former spouse.

The basics: A person can collect Social Security benefits based on her own earnings history, or 50% of her spouse or former spouse's benefit, if it is greater than her own, and 100% if he is deceased.

Rules for Divorced Couples

For divorced spouses, there are a couple of catches: The marriage must have lasted 10 years or longer, and the person seeking a former spouse's higher benefit must currently be unmarried, unless she remarried after age 60.

[More from WSJ.com: I Say Tomato, You Say Tabasco]

Let's say your mother was married in the 1950s or 1960s for at least a decade. Perhaps she was out of the work force raising children and subsequently worked at low-paying jobs, so her benefit might be, say, $800 a month.

By contrast, her former husband—with more years in the work force and higher wages—might be eligible for a monthly benefit of $2,000. (Social Security benefits currently max out at $2,366 a month.)

Your mother might not realize she can collect a total of $1,000 a month if her former spouse is alive, and $2,000 a month if he isn't. If the Social Security Administration determines she is eligible for higher benefits, she also will receive retroactive amounts going back six months. For the woman in the example above, that would be a lump sum of either $1,200 (six times $200) or $7,200 (six times $1,200).

It doesn't matter whether the ex-husband remarried; collecting on his earnings record doesn't affect what his current spouse (or any other ex-spouse) will receive. Nor does this require any involvement with the former spouse: The Social Security Administration has information about a former spouse's earnings history and whether he is alive or not, and makes its determination based on those records.

[Also see: Household Habits to Break]

If your mother is under full retirement age—65 or 66, depending on her birth date—there are other options. If the former husband is 62 or older, then regardless of whether he has begun collecting Social Security, your mother can begin receiving a reduced benefit at 62 based on the husband's record, provided the divorce took place at least two years prior. She can later switch to her own benefit once she reaches full retirement age, if the benefit is higher.

If the former spouse is deceased, your mother can begin collecting a reduced widow/divorced widow benefit at age 60, then later switch to her own benefit at her full retirement age, if it is greater. Working while collecting Social Security, delaying receiving benefits, being disabled or having a dependent child also can change the equation. The Social Security Administration can answer initial questions about a benefits review over the phone (800-772-1213 begin_of_the_skype_highlighting 800-772-1213 end_of_the_skype_highlighting); the agency's website has details.

An Ex-Spouse's Earnings

Applying for benefits based on a former spouse's earnings is a legitimate move, unlike the gimmick of taking a reduced benefit at age 62, then paying all the money back and commencing a benefit at full retirement age. (The Social Security Administration has closed this dubious loophole, which affluent people were using to get an interest-free loan from the government.)

Besides family members, others who might want to consider requesting a benefits review on behalf of an older person include legal-aid attorneys and counselors advising people struggling with debt and foreclosures; nursing-home administrators, since Social Security benefits often go to the facility to help pay for the resident's care; and financial planners who are reviewing clients' sources of income.

[More from WSJ.com: How to Make Your 401(k) Work Harder]

Last year, Chris Walker of J. Mark Nickell & Co., a fee-only advisory firm in Brentwood, Tenn., helped the widow of a client obtain the full value of the survivor benefit to which she was entitled. Because her husband had delayed receiving Social Security until age 68, the widow's benefit was supposed to be $2,140 month, not the $1,862 that the Social Security Administration was paying her.

It took numerous phone calls and letters over a period of almost five months to get the benefit corrected, Mr. Walker says, but he persisted.

"For widows," he says, "every dollar of monthly income is valuable and needed."

A Bigger Bang
You might be eligible for a bigger Social Security benefit based on a former spouse's earnings record if the marriage lasted at least 10 years, and:

- You are at least 62 years old and unmarried and your former spouse is currently collecting benefits.
- You have been divorced at least two years, your former spouse isn't collecting benefits and you are both over 62.
- You are over 60 and your former spouse has died.
- Your spouse or former spouse delayed taking Social Security until after his full retirement age.
(Source: WSJ research)

Tuesday, January 17, 2012

Non-Taxable Income

text size AAA By Michael DiazΙ Published January 16, 2012

It’s almost time for tax season. Everyone knows that your earned wages will be taxed by the IRS. What many people do not realize is that there are numerous sources of income that are not taxed by the federal government. If you can increase your income from these sources, then you will reduce your overall tax burden. But what are these sources and how can you take advantage of them.

Here are eight sources of income that are not taxable under the federal tax code.

Interest Earned From Tax Exempt Municipal Bonds

As the name suggests, interest earned from tax exempt municipal bonds is not subject to federal taxes. In fact, many states also give state tax exemption if the bonds were issued in the state in which you file your taxes. This tax exemption applies to both individual tax exempt municipal bonds and to shares in tax exempt municipal bond funds.
Be aware that there are taxable municipal bonds that do not benefit from federal or state tax exemption. Make sure that you pay close attention to the tax status of any municipal bond or municipal bond fund that you purchase. (To learn more about municipal bonds, see An Investor’s Guide To Municipal Bonds.)

Income From The Sale Of Your Primary Residence

If you sell your primary residence for a profit and pass the IRS tests for home use and ownership, then a portion of your income for the sale will be tax exempt. To pass the tests, you need to prove that you have owned your home for at least two of the past five years. You also need to prove that it is your primacy place of residence.
If you can do this, then you can exclude up to $250,000 of capital gains from you taxable income. If you file jointly with your spouse, you can exclude up to $500,000. If you don’t meet the two year test, you may be able to get a partial tax exemption for the income earned from the sale.

Life Insurance Money

It is not pleasant to think about, but if a loved one dies and you are the beneficiary of their life insurance policy, you will generally not have to pay any taxes on the life insurance money that you receive. You should note that there are some exceptions to this rule. You should consult with the IRS or a tax specialist for further information about when life insurance disbarments can be taxed. (For more information about life insurance, see Life Insurance.)

Non-Taxable Gifts

A gift is exactly what it sounds like. According to the IRS, a gift is any transfer to an individual that the individual does not fully pay for. Some gifts are taxable. However, a good many are not. For example, in 2011, you can give a person up to $13,000 without any party being taxed. Other types of gifts that can qualify for tax exempt status include tuition or medical expenses that you pay on behalf of someone else, gifts to your spouse, and gifts to a political organization. You should speak with a tax expert before giving a gift to make sure that you take full advantage of the potential tax benefit. (To lean more, see The Rules Of The IRS Gift Tax.)

Employer Fringe Benefits

There are numerous fringe benefits that employers give to their employees. Some companies offer their employees subsidies for public transportation. This can include subway cards, bus passes or cab fares. Additionally, some companies also offer parking subsidies to their employees that drive to work. As long as these subsides are not valued more than $230, you can receive these subsidies tax free. Other tax free fringe benefits include free gym membership, use of a company car and employee discounts.

Child Support

If you are the parent with custody of the child, you do not have to report child support payments to the IRS. You should note that spousal support is not necessarily tax exempt.

Foster Care Payments

If you take care of foster children, you will receive payments from the state to help with expenses. Since these payments are made by a state agency or tax-exempt organization, you do not have to report them to the IRS.

Personal Injury Awards

If you have been issued financial awards because of a personal injury suit, you might not have to pay taxes on the money awarded. You should speak with a tax professional to determine whether you need to report the funds you received from a personal injury suit.
When tax season rolls around, many people focus on the financial items that they are required to report. However, we could all benefit from taking a closer look at the income that we don’t need to report. If you can take advantage of these sources of tax free income, you will be able to save money during tax time.
Sources

Thursday, January 12, 2012

Wednesday, January 11, 2012

Ten Things to Know About the Child and Dependent Care Credit
IRS Tax Tip 2011-46, March 7. 2011

good and very detail link

http://taxes.about.com/od/deductionscredits/qt/child_care.htm

If you paid someone to care for your child, spouse, or dependent last year, you may be able to claim the Child and Dependent Care Credit on your federal income tax return. Below are 10 things the IRS wants you to know about claiming a credit for child and dependent care expenses.
The care must have been provided for one or more qualifying persons. A qualifying person is your dependent child age 12 or younger when the care was provided. Additionally, your spouse and certain other individuals who are physically or mentally incapable of self-care may also be qualifying persons. You must identify each qualifying person on your tax return.

The care must have been provided so you – and your spouse if you are married filing jointly – could work or look for work.

You – and your spouse if you file jointly – must have earned income from wages, salaries, tips, other taxable employee compensation or net earnings from self-employment. One spouse may be considered as having earned income if they were a full-time student or were physically or mentally unable to care for themselves.

The payments for care cannot be paid to your spouse, to the parent of your qualifying person, to someone you can claim as your dependent on your return, or to your child who will not be age 19 or older by the end of the year even if he or she is not your dependent. You must identify the care provider(s) on your tax return.

Your filing status must be single, married filing jointly, head of household or qualifying widow(er) with a dependent child.

The qualifying person must have lived with you for more than half of 2010. There are exceptions for the birth or death of a qualifying person, or a child of divorced or separated parents. See Publication 503, Child and Dependent Care Expenses.

The credit can be up to 35 percent of your qualifying expenses, depending upon your adjusted gross income.

For 2010, you may use up to $3,000 of expenses paid in a year for one qualifying individual or $6,000 for two or more qualifying individuals to figure the credit.

The qualifying expenses must be reduced by the amount of any dependent care benefits provided by your employer that you deduct or exclude from your income.

If you pay someone to come to your home and care for your dependent or spouse, you may be a household employer and may have to withhold and pay social security and Medicare tax and pay federal unemployment tax. See Publication 926, Household Employer's Tax Guide.
For more information on the Child and Dependent Care Credit, see Publication 503, Child and Dependent Care Expenses. You may download these free publications from http://www.irs.gov or order them by calling 800-TAX-FORM (800-829-3676).
Links:
Publication 503, Child and Dependent Care Expenses (PDF 167K)
Form W-10, Dependent Care Provider’s Identification and Certification (PDF 31K)
Form 2441, Child and Dependent Care Expenses (PDF)
Form 2441 Instructions (PDF 32K)
Publication 17, Your Federal Income Tax (PDF 2,075K)
Tax Topic 602
Publication 926, Household Employer's Tax Guide

Tuesday, January 10, 2012

Money Hacks 2012--8 Shortcuts to Getting Richer

Stacy Johnson

Want to turbocharge your change jar? In this post a few months back, guest columnist Len Penzo suggested adding dollars to the mix: "When you are out during the day, don't spend any dollar bills you get as change. Then, after you come home and are ready to make contributions to your jar, be sure to include all of those unspent dollar bills along with your coins—and if you have no singles, then pull out a fiver and drop it in the jar."
They're called "hacks": clever solutions to tricky problems. Here are some of my favorites to help you save more or spend less.
Did you make a New Year's resolution? If not, there's still time—after all, the year's still "new" until you remember to stop dating things 2011.
But whether your resolution is getting in better physical shape, dropping bad habits, or improving your finances, odds are it's about changing your behavior—no walk in the park. One thing that will help? Using simple shortcuts that remove some of the pain from the process.
In the digital age, shortcuts to solutions are often called "hacks." Now let's look at these money-making and saving hacks.
1. Saving More
Problem: You want and should be able to save more, but it never seems to happen.
Hack: Take your discipline (or lack thereof) completely out of the equation by automating your savings. Save before you see the money by transferring it automatically from every paycheck into savings, either regular or retirement. If your employer can't make it happen, talk to your bank, broker, or mutual fund to schedule regular transfers to savings or investment accounts. Instead of trying to find the money every month, you set it once and watch the money pile up.
Not only is saving automatically more efficient, it's more effective. If you take the traditional approach—waiting until you've paid all your bills before saving what's left—there's often nothing left to save. There's a reason "pay yourself first" has been the mantra of the money-enlightened for decades: It works.
[See also: 5 Steps to a More Satisfying Career]
2. Paying Bills on Time
Problem: Forgetfulness leads to late bills, which leads to fees and potential damage to your credit score.
Hack: Most banks and credit unions offer automated bill payment you can set up online. Utilities and other companies offer this service too, and might waive convenience fees or offer discounts for the right to suck money directly from your account. If your monthly bills include debt payments, automatically pay more than the minimum to work off debts faster. Remember what I said in the video above: Minimum payments are for losers.
One caveat: Make sure you maintain a sufficient checking balance to auto-pay all your bills without over-drawing your account. If there's even a chance you might, set up an auto-transfer from savings or a credit line to cover any potential shortfall.
3. Creating a Budget
Problem: You see the advantage of budgeting, but feel overwhelmed by the idea of creating spreadsheets, then tracking and recording where your money's going.
Hack: Traditional budget worksheets are so 2011. It's time to throw out the paper and pencil and let your computer or phone do the heavy lifting. Use a free service like Mint.com to establish goals, automatically track your spending, and give you a complete picture of exactly where you are 24/7. For even more convenience, look to the dozens of apps—many free—that can put your computerized budget into the palm of your hand. This app review article from Moolanomy is a good place to start looking.
4. Allocating Assets
Problem: You'd like to invest part of your retirement or other long-term savings into stocks or other risk-based investments, but have no idea how much to put where.
Hack: Take your age from 100. That's the percent of your savings to at least consider investing in stocks. So if you're 25 years old, you'd put up to 75 percent in stocks. If you're 60, your stock percentage should be around 40 percent. As for the remaining portion, split it equally between a money market account and an intermediate term bond mutual fund. For specific investments in each of these categories, use low-cost index funds. For example, the Vanguard 500 Index fund (VFINX) is a good pick for a stock investment.
Caveat: The hack above isn't a rule, it's a rule of thumb. Don't ever put money into any fluctuating investment that you'll need within five years, and don't ever risk so much that you lie awake at night. There's no amount of return worth sacrificing your peace of mind.
5. Spending Less
Problem: You pay more than you have to because you didn't check online before leaving home and don't want to waste time and gas comparing prices all over town.
Hack: Smartphone apps, such as Google Shopper, RedLaser, and Amazon Price Check, let you scan barcodes and search for products to check prices online and locally. And don't ever buy anything without looking for online coupons.
[See also: What You Need to Know for 2011 Taxes and What's New for 2012]
6. Saving More, Part 2
Problem: You don't make enough to automate your savings and never seem to have anything at all saved.
Hack: While tracking and analyzing your expenses is the only way to know if there's really any money hiding in your budget, the time-honored technique of using a change jar is a low-tech and simple way to save. When you come home, simply empty your pockets or purse of change. I've started doing this and the amount I've saved is astonishing. Try it.
7. Using Coupons
Problem: You'd love to use more coupons and discount codes, but don't have time to clip them or scour the Web.
Hack: Set up an RSS feed to automatically create and maintain a searchable collection of deals and discounts. The easiest way to do it:
Subscribe to feeds from deals sites like Slickdeals, Techbargains, and Dealnews using a free feed reader, like Google Reader.
8. Avoiding Parking Tickets
Problem: You're accumulating parking tickets because while your intention is to run inside a store for just a minute, that always seems to be the minute parking enforcement is dropping by.
Hack: One of the best pieces of advice I ever read: Always keep change in your car so you can feed the meter. Not in your pocket or purse—in your ash tray. Sounds simple, but do you do it? Since I started a few years ago, I've pretty much eliminated this maddening budget-buster.

This article is part of a series related to being Financially Fit

Monday, January 9, 2012

Nondividend Distributions
According to Publication 17 page 64 -

A nondividend distribution is a distribution that is not paid out of the earnings and profits of a corporation. You should receive a Form 1099-DIV or other statement from the corporation showing the nondividend distribution. On Form 1099-DIV, a nondividend distribution will be shown in box 3. If you do not receive such a statement, you report the distribution as an ordinary dividend.
Basis adjustment. A nondividend distribution reduces the basis of your stock. It is not taxed until your basis in the stock is fully recovered. This nontaxable portion is also called a return of capital. It is a return of your investment in the stock of the company. If you buy stock in a corporation in different lots at different times, and you cannot definitely identify the shares subject to the nondividend distribution, reduce the basis of your earliest purchases first.
When the basis of your stock has been reduced to zero, report any additional nondividend distribution that you receive as a capital gain. Whether you report it as a long-term or short-term capital gain depends on how long you have held the stock. See Holding Period in chapter 14.
Example.
You bought stock in 1996 for $100. In 1999, you received a nondividend distribution of $80. You did not include this amount in your income, but you reduced the basis of your stock to $20. You received a nondividend distribution of $30 in 2008. The first $20 of this amount reduced your basis to zero. You report the other $10 as a long-term capital gain for 2008. You must report as a long-term capital gain any nondividend distribution you receive on this stock in later years.

IRS Form 1099-OID, titled "Original Issue Discount," is sent to those taxpayers who received an excess of an obligation's stated redemption price at maturity over its issue price; examples include bonds, debentures, notes, certificates or other debts having a term greater than one year. This article is written from the point of view of the entity filling out the 1099-OID, not the person receiving it.

Instructions

- 1
  Call (800) TAX-FORM begin_of_the_skype_highlighting (800) TAX-FORM end_of_the_skype_highlighting or visit the IRS online form ordering website (see resources below) to obtain acceptable copies of Form 1099-OID to send to recipients. Although Form 1099-OID is available for viewing online, the e-version of the form is unacceptable to send to taxpayers or the Internal Revenue Service.
- 2
  Check the "Void" or "Corrected" box at the top of the 1099 form if applicable. Enter the Payer's name, street address, city, state, ZIP code and telephone number in the first box. The Payer is the organization or entity that paid the original issue discount (OID) money.
  Federal Tax ID (EIN)www.gov-id.com
  Get your Federal EIN in minutes. We work for you, not the government
- 3
  Enter the Payer's Federal identification number and the Recipient's identification number (usually a Social Security number or an EIN) in the two boxes beneath the first box. Below this, list the Recipient's name, street address (including apartment number), city, state and ZIP code. Enter the account number that is associated with this income. Check the box if the Recipient has a second Tax ID number.
- 4
  Show the OID on the obligation for the part of the year the Recipient owned the debt in Box 1. List any other interest on this obligation that is a separate amount from the OID in Box 2. In Box 3 show the interest or principal forfeited if the Recipient withdrew the money before the maturation date of the obligation. Withhold 28% of the OID amount as a backup if the Recipient did not provide you with a Tax ID number; list this figure in Box 4.
- 5
  Detail the CUSIP (Committee on Uniform Security Identification Procedures) number or description of the obligation in Box 5; examples may include the stock exchange, issuer, coupon rate or year of maturity. In Box 6, show the OID on a U.S. Treasury obligation for the part of the year the Recipient owned it. In Box 7, show the amount of the Recipient's share of investment expenses of a single-class REMIC (real estate mortgage investment conduit).
- 6
  File Form 1099-OID with the IRS; also send a copy to the recipient. Check the IRS official website (see resources below) for specific instructions as to the filing deadline for Form 1099-OID; it changes annually.

Friday, January 6, 2012

PIC: Angelina Jolie Takes Pax, 8, Shopping for Toy Rifles

Celebrity Moms January 6, 2012 AT 11:10AMBy Justin Ravitz

Credit: X17online.com

Pax may mean "peace" in Latin, but Pax Jolie-Pitt was all about war during a shopping trip to a party supply store with his mom Angelina Jolie and older brother Maddox in Hollywood on Thursday.
PHOTOS: 2012 horoscope predictions for Angelina and Brad
In a hilarious photo, the movie star and director 36, cracks up as Pax, 8, wearing fatigues, aims a toy rifle directly at the camera. (Although on hand for the excursion, his older brother Maddox, 10, wasn't pictured.)
PHOTOS: How Pax and his siblings have grown up
After spending much of 2011 abroad, Jolie and love Brad Pitt and their brood of six have been spending quality time in L.A.. Pitt, 48, ran errands with Pax in the sidecar of his $11,600 Ural Tourist motorcycle on New Year's Eve, and the busy parents had a night to themselves partying (and dancing!) at Jonah Hill's 28th birthday party, where newly single Zooey Deschanel was also in attendance.
PHOTOS: Brad and his kids
But on Thursday, Pitt stepped out in Beverly Hills in a bizarre black jumpsuit -- and a cane! "He tore his MCL," a source told Just Jared, explaining that Pitt injured one of four ligaments that stabilizes the knee joint.

China Faces Ongoing Tension in Restive Xinjiang

Stephanie Ho | Beijing

Photo: AP

Members of the Uyghur ethnic minority walk past a Muslim mosque near the Erduoqiao neighborhood in Urumqi in northwestern China's Xinjiang Uygur Autonomous Region, (File).

China’s far northwestern Xinjiang region is settled primarily by the Muslim Uighurs who have long chafed under Chinese rule. In recent years, there have been episodes of violence between locals and security forces, but who is at fault remains a matter of dispute.

At the end of December, the Chinese government reported a shootout in Xinjiang, in which eight people were killed.

Foreign Ministry spokesman Hong Lei recounts the official version of events.

He says that it was a police operation, that led to the rescue of two herdsmen who had been kidnapped by a terrorist group that was headed to what Beijing said were “foreign jihad camps.”

The state-run Xinhua news agency says the confrontation involved a gang of 15 “violent terrorists”. Its reporting does not specify whether the terrorists were ethnic Uighur, a Muslim minority that makes up almost 90 percent of the population of Hotan county, where the conflict took place.

Apart from the eight deaths, four people were injured in the shootout, and four others detained. For Chinese authorities, the guilt of those involved is not in doubt.

Hong says that this was definitely an act of terrorism.

When there have been similar incidents in Xinjiang in the past, Uighur groups overseas have disputed China's version of events - and this time was no different.

Dilshat Rexit, spokesman for the World Uighur Congress, an exile group based in Munich, says that the 15 Uighurs in question were unhappy under Chinese rule and were trying to flee the country. He denies that the group had any link with terrorist organizations.

Rexit accuses the Chinese government of linking Uighur people with global terrorism as an excuse for what he describes as systematic suppression in Xinjiang.

Rexit says that many Uighurs are distressed by China's growing interference on the minority's cultural and religious activities, and that such policies are the main cause for the area's restiveness.

Earlier this year 18 Uighur men, who were opposed to a ban on Islamic women wearing a veil, attacked a Hotan police station with bombs and knives, killing two policemen and taking hostages.

Raffaello Pantucci is a Shanghai-based associate fellow at the International Center for the Study of Radicalization at London's Kings College.

He says despite differing interpretations of the most recent events in Hotan, one fact remains the same in both accounts.

“It seems clear that both of the stories agree that there were people leaving, people were trying to leave which suggests that there is some sort of tension that is obviously going on in the background,” noted Pantucci.

Pantucci acknowledges that there are small groups of extremist Uighurs who are reported to have posted threatening videos online, but he says he does not see an overall Uighur trend toward terrorism. At the same time, though, he warns that if the Chinese government's policies are too harsh, they may in fact push more Uighurs toward fundamentalism.

“By reacting to any expression of religion or religiosity as a manifestation of extremism that could lead to violence, you are potentially pushing individuals that might be finding religion as a greater solace into sort of more dangerous and violent direction,” Pantucci said.

Simmering ethnic tensions in Urumqi, the capital of Xinjiang, erupted in July 2009. Uighurs were demonstrating against an ethnically-motivated killing at a factory in southern China. The protest turned violent, with Uighurs targeting residents of China's ethnic Han majority. About 200 people, mostly Han Chinese, were killed.

US Unemployment Drops; 200,000 Jobs Added

VOA News

The U.S. economy had a net gain of 200,000 jobs in December, while the unemployment rate dropped to the lowest level since early 2009.

Friday's report from the Labor Department says the jobless rate fell two-tenths of a percent to hit 8.5 percent.

All of the job gains were in the private sector, particularly transportation, retail, manufacturing, and health care. Employment continued falling in state and local governments which cut another 12,000 jobs.

This is the sixth month in a row that the economy has gained at least 100,000 jobs, but those gains have not yet made up for the eight million jobs lost during the recession.

The number of people who want full-time work, but who can find only part time jobs declined by hundreds of thousands, but remains at 8.1 million. Some out-of-work people are not counted as officially unemployed because they have given up their job hunt in the belief there is no work for them. The number of such "discouraged workers" has fallen over the year by a bit less than 400,000 in 2011 and stands at 945,000 nationwide.

High unemployment has made the economy a key issue in this year's presidential election campaign.
Some information for this report was provided by AP and Reuters.

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