GP Flashcards

1
Q

Features of series EE/I bond

A
  • special savings bond through which an exclusion from taxation on interest is available when used for qualifying educational expenses
  • must be owned by parent
  • max series EE is 10,000 per year per owner. Maximum series I is 10,000 digital and 5000 paper per year per owner.
  • qualifying expenses are tuition and fees
  • phase out exist for interest exclusion
  • counted as an asset of bond owner for FAFSA
  • no penalty if not use for qualifying expenses, but interest will be included in income
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2
Q

Consumer credit protection act

A

Right to know costs and terms of credit

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3
Q

Equal credit protection act

A

Right to fair opportunity to obtain credit

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4
Q

Fair credit reporting act

A

Right to know what’s in your credit file

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5
Q

Fair credit billing act

A

Right to have billing mistakes resolved

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6
Q

Fair debt collection practices act

A

Right to be protected from collection agencies

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7
Q

What is still required to be paid back under Ch 7 bankruptcy?

A

Alimony, child support, taxes (less than 3 yrs past due), secured debt, student loans

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8
Q

Max debt levels for Ch 13 Bankruptcy

A

$419,275 unsecured
$1,257,850 secured

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9
Q

What is considered a jumbo mortgage?

A

Amounts over $766,850 (2024)

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10
Q

Series EE/I tax free interest calculation if only part of the proceeds are used for qualified expenses

A

Total IR x (Adjusted qualified education expense / proceeds)

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11
Q

AOTC credit amount

A

2500
100% first 2000
25% next 2000
1000 refundable

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12
Q

LLC max amount

A

2000
20% first 10,000 expenses (tuition + fees ONLY)
Non refundable

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13
Q

What applies for UGMA/UTMA?

A

Kiddie tax rules

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14
Q

Qualified education expense withdrawal from ROTH or Traditional IRA

A

10% penalty waived

For Roth: income tax may still be applied if pre 5 year + 59 1/2

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15
Q

Contributions to coverdell

A

Up to age 18, use by 30
$2k per year per bene

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16
Q

Penalty for Coverdell or 529 non qualified withdrawal

A

10% + taxes

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17
Q

Consumer debt ratio

A

<20%
Total monthly consumer debt (non housing) / monthly NET household income

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18
Q

EFC asset/income amounts

A

Parent assets: 5.64% (home equity/retirement don’t count)
Parent income: 22-47% (AGI minus allowance for taxes and living expenses)
Student assets: 20%
Student income: 50% (above protected amount of $9410 for 2024)

19
Q

Return on equity

A

EAT/equity

20
Q

Debt to equity

A

Total long term debt/equity

21
Q

Times interest earned

A

EBIT/interest expense

22
Q

Debt ratio

A

Total debt/total assets

23
Q

Front end/mortgage ratio

A

PITI/gross monthly income
Goal is 28% or lower

24
Q

Back end ratio

A

PITI + other debt/gross monthly income
Goal is 36% or lower

25
Quick ratio
Current assets - inventories / current liabilities
26
Working Capital
Current assets - current liabilities
27
Inventory turnover
COGS/average inventory
28
Days to sell inventory
365/inventory turnover
29
Days to sell inventory
365/inventory turnover
30
Illiquid personal assets on a balance sheet
The fair market value is the last price that was paid for the asset until an appraisal or a new transaction price can be obtained, do not fall into the unknown value trap
31
Acceptable emergency fund assets
Cash Checking and savings accounts Money market mutual funds T-bills CDs Cash value life insurance Lines of credit Home equity loans Assets in the fund must be liquid and marketable
32
How to decide between a fixed rate or a variable rate mortgage?
- when rates are low and/or the homeowner is expected to stay in the home for a long time —>fixed rate is advisable - when rates are high and/or the homeowner is not planning to keep the home long-term —>a variable rate may make sense
33
Credit score rating categories
<580=poor, risky borrower 581-669=fair, many lenders will approve loans 670-739=good, most lenders consider a good score 740-799=very good, dependable borrower 800+=excellent
34
How FICO scores are calculated
Payment history 35% Amounts owed 30% Length of credit history 15% Credit mix 10% New credit 10%
35
529 Able Plans
- diagnosis of significant disability prior to age 26 - condition expected to last 12 consecutive months - receipt of SSI or SSDI or able to obtain disability certification from a DR
36
How long does a respondent have to deliver a written answer to an amended complaint?
No later than 14 days of delivery of the amended complaint or the date an answer to the original complaint was due
37
What is the long end of the yield curve reflective of?
Market rate and anticipated economic conditions
38
When the yield curve is inverted
Long term investors will settle for a lower yield due to the outlook that the economic conditions are bleak
39
LLC: can multiple household members qualify?
Yes, each eligible household members qualified ed expenses may be combined to maximize the credit up to the annual limit of $2k per return (20% on the first $10k of qualified education expense)
40
Does Ch 7 bankruptcy eliminate mortgage debt?
Yes, Ch 7 bankruptcy can eliminate your personal responsibility to repay mortgage debt but the lender retains a lien on the property and can foreclose if payments stop
41
Suspension time frame
Not less than 90 days or greater than 5 years
42
Framing bias
Occurs when people decide based on how information is presented as opposed to just on the facts themselves
43
Dunning Kruger Effect
Occurs when a persons lack of knowledge and skills in a certain area causes them to overestimate their competence