HOT TOPICS NEED TO REVIEW

Question 1

Medicare is a government-sponsored health care plan that has two primary components, namely:

Answer 1

Basic hospital insurance and supplementary medical insurance.

Medicare does not include any of the other items such as dental coverage. Nor does it contain any more than basic hospital coverage.

Question 2

For the purposes of defining disability under the Social Security Disability Income Plan, the program uses the following definition or definitions for disability:

Answer 2

Any occupation.

Question 3

Which of the following statements is correct?

Unpaid medical expenses of a decedent can be deducted on the final 1040 or form 1041 but not on both.
Any executor fees may be deducted on form 706 or the 1041 return.

Answer 3

Unpaid medical expenses can be deducted on the 1040 or the 706 but not the 1041

Question 4

Which of the following describe benefits usually available under an employer-provided short-term disability plan?

Short-term disability coverage will start on the first day when disability is related to an illness.
The definition of disability under short-term disability coverage is defined as the inability to perform the normal duties of one’s position.
Benefits under a short-term disability plan usually extend for one year.
Generally, short-term disability coverage will start after sick pay benefits have been provided to a covered employee.
I and II only.
III and IV only.
II and IV only.
I, II and III only.

Answer 4

Solution: The correct answer is C.

Short-term disability benefits usually start the eighth day of an illness (first day for an accident) and generally last no more than six months.

Question 5

All of the following accurately reflect the characteristics of a stock bonus plan, except:

Useful in cash flow planning for plan sponsor due to cashless contributions.
Provides motivation to employees because they become “owners.”
20% withholding does not apply to distributions of employer securities and up to $200 in cash.
May not allow “permissible disparity” or integration formulas.

Answer 5

Solution: The correct answer is D.

Integration formulas are not allowed under an ESOP plan but are allowed under a stock bonus plan. All other statements are accurate in their description of a stock bonus plan.

Question 6

Which of the following is/are correct statements regarding a client’s risk tolerance?

The financial planner should understand that a client’s decision making biases may influence their risk tolerance.
The financial planner should understand that most clients overstate their risk tolerance.
Only I is correct
Only II is correct
Both I and II are correct
Neither I nor II is correct

Answer 6

Solution: The correct answer is C.