Educauton / Cobra Flashcards
Lifetime learning credit
$2k credit per year per family
Unlimited number of years of college
American opportunity credit
Only for 4 years post secondary education (undergrad)
Max $2,500 credit per student
UGMA vs UTMA
Both:
irrevocable gift to child
Not transferable
Asset of child for financial aid
Difference:
UTMA can include real estate, UGMA cannot
National Association of Insurance commissioners
Provided watchlist of insurance based upon financial ratio
No regulatory power
Variable life VS universal life
Variable: no min guaranteed death benefit
Universal: min guaranteed death benefit
Cross Purchase Agreement
Each person owns a policy on each other
- lots of policies if lots of partners
Increases basis to surviving partners
Entity Purchase agreement
Company pays for life insurance
Fewer policies needed
DOES NOT INCREASE PARTNERS BASIS
Key person Life insurance agreement
Protects loss of important employee
Death benefit is tax free
Premiums not deductible
Modified Endowment Policy
Fails 7 pay test
Cash value policy that lost tax benefit bc contains too much cash
Taxes as ordinary income until cash value equals premiums
LIFO
Group life insurance
Premiums paid my employer are taxable income if coverage over $50k
Premiums deducted by employer
What companies need to offer COBRA
employees who offer group health plans and have at least 20 full time employees
COBRA eligibility
1) death (36 months)
2) termination (18)
3) reduction to part time (18)
4) separation from spouse (36)
5) eligible for Medicare (36)
6) child no longer eligible (36)
7) SS def of disabled (29)
Long term care eligiblity
Must be chronically ill or suffer from substantial cognitive impairment
Chronically ill - LTC elibilty
Cannot perform 2 of 6 activities of daily living
1) bathing
2) eating
3) dressing
4) transferring from bed to chair
5) toilet
6) continence
LTC tax benefits
If policy is qualified, premiums are tax deductible and benefits tax free
