General Principles Flashcards
Appeal Process of Adverse Ruling with DEC.
What? When? How Many Times?
What? All rulings may be appealed
When? 30 days to apply for appeal after ruling
How Much? Only one opportunity to appeal
Requirements to use CFP Mark
Pass Exam; 3 years of Experience; Application (Terms and Conditions & Ethics Declaration); CFP Background Check for fitness
At what value are items shown on statement of financial position?
Current FMV
What agency regulates brokerage companies?
FINRA. The SEC governs FINRA, but FINRA does all of the regulating.
Education Tax Credits and Deductions
- American Opportunity - Life Time Learning - Student Loan Deductions
Characteristics of American Opportunity
Credit is dollar for dollar for the first $2000 spent on qualified education expenses. PLUS 25% for the next $2000 spent. Maximum credit is $2500.
Phase-out is on tax table
Expenses Paid by grants or scholarships do not qualify
Lifetime Learning Credit
Student Not Required to be pursuing a degree. They are a life time learner!
Undergrad or Grad school
20% of first 10,000. Max credit of $2,000
Student Loan Interest Deduction
Above the line to certain taxpayers
Max deduction is $2500
Phaseouts on tax table
Financial Aid
PePePaSuSu
Pell Grant
Perkins Loan
Parent Loan Undergrad
Subsidized Stanford
Supplement Ed Opp Grant
Pell Grant
- $6,000 per year
- Undergrad at least 6 hours
- Use EFC Formula
EFC Formula
Financial Need = Cost - Expected Family Contribution
Parent Loan Undergrad Students
PLUS
- Parents can borrow the entire cost of college including tuition and living expenses
- non-need based. Anyone can apply.
- Must meet federal standard of credit worthiness
Subsidized Stafford Loan
Available based on EFC, Pell grant eligibility & aid from other sources.
Supplement Education Opp Grant
Available to Pell grant recipients up to $4,000/Year
Punitive Damages
- Punish. Funds to punish wrongdoing.
- Generally taxable unless being paid to a beneficiary in conjunction with wrongful death.
Compensatory Damages
- Damages from physical injury or sickness
- Generally tax-free
- Damages received from discrimination are taxable up to medical cost required. That would be tax free.
Sequence of Initial Registration to sell certain Equity based products
- Associate with B/D
- Register with FINRA
- Pass Exams
- CRD#
How does obtaining a mortgage affect a client’s financial statement?
Both assets and liabilities increase.
Deductibility of Home Equity Loan
Home equity loan interest payments are deductible only for home improvement. Anything else is not deductible.
Deductibility of Mortgage Interest
750k MFJ
325k Single
Chapter 7 Bankruptcy
- Non-Cancellable Debts
- Monthly Net Income Limitations
Permits a debtor to claim either the federal exemption or exemptions available under state law.
- NC Debts
Student Loans
Wage withholds and income tax due
Child support and alimony
- Avg Monthly Net Income less than 6k
- If between 6 & 10 thousand net income < 25% of non-priority debt
Ways to Write CFP Marker?
CERTIFIED FINANCIAL PLANNER with Trademark sign
CFP with Registered sign
Commingling Client Funds
- May not commingle client money or property with funds of FP Firm
- Client funds can be commingled in a common client investment account
Life insurance or emergency fund first?
Life insurance
