MY Wrong Answers Flashcards
1
Q
Are Closed-End Funds, ETFs, and brokered CDs considered liquid? Why?
A
No, because of the potential loss of principal
2
Q
Is Life Insurance cash value considered liquid?
A
Yes
3
Q
What does marketable mean? Some examples
A
Marketability implies trading amount, buyers and sellers.
REITS, closed-end funds, ETFs and brokered CDs
4
Q
Standard Deviation as what following elements?
A
Variability, non-diversified portfolio, total risk
5
Q
Margin Requirement formula?
A
(1-initial Margin %/1-Maint Margin %) x Purchase Price of Stock
6
Q
In the arbitrage pricing theory, what effect does it have when the expected value is zero?
A
No effect
7
Q
Dividend Model Shortcuts: If 1st growth rate is lower than the second growth rate? What do you choose?
A
Choose the next and lowest number
8
Q
When is an issuing corporation likely to call its bonds?
A
When bonds are selling at a premium
9
Q
What does the dow theory consist of?
A
- Technical analysis is an active strategy
- Price movements and trading volume
- Considers the Dow Jones Industrial Index and the Dow Jones transportation index.
10
Q
What is the stock risk premium formula?
A
(Rm-Rn)Bi
11
Q
What is the market risk premium formula?
A
Rm-Rf
12
Q
what is the Security Market Line (SML) or CAPM Formula?
A
Ri= Rf+(Rm-Rf)Bi
13
Q
If a bond sells at a premium, does it’s current yield exceed its yield to maturity?
A
No
14
Q
Is S&P a bond Rating Company
A
Yes
15
Q
What is used to provide financial backing for import/export transactions?
A
Banker’s Acceptance
16
Q
Series I Bonds, What are they?
A
- Series I bonds earn interest for up to 30 years.
- Series I bonds accrue earnings based on both a fixed rate of return & the semi-annual inflation rate
- The special tax benefits available for education savings with series EE bonds also apply to Series I bonds
- The difference between the purchase price and the redemption value of taxable interest (redeemed of matures)
17
Q
Exchange trades fund is most similar to?
A
mostly open fund but could be a closed-end fund
18
Q
How do unit trusts work?
A
- The unit trust will self-liquidate
- Trade on the secondary market
19
Q
What fund is purchased at NAV?
A
No-load balanced and mutual fund
20
Q
Is the S&P Index Fund tax effiecient?
A
Yes, seeks to mirror S&P 500 therefore turnover is minimal
21
Q
What corporate reports are required to be filed with SEC?
A
10Q and 10K
22
Q
What are the characteristics of Heuristics?
A
A strategy that ignores part of the information, with the goal of making decisions more quickly, frugally, and/or accurately than more complex methods.
23
Q
What is the example of Heuristics in Daily Life?
A
- Trail and error
- Rule of thumb
- Educated guess
24
Q
What is attachment bias?
A
Holding on to an investment for emotional reasons rather than considering more practical application for the inheritance.
25
Black/Scholes option pricing model, what factor will decrease the value of a call option?
an increase in the strike price
26
What is the expected value of each factor in the arbitrage pricing theory?
0=zero
27
Margin call formula
(1-initial margin/1-maintenance margin) x Price
28
What is beta expressed in as far as risk level?
volatility, systematic risk
29
Will a negative correlation coefficient make the beta negative?
Yes
30
Are US securities subject to marketability risk?
No, very little
31
When two companies merge, and negatively correlate, how does that affect the covariance?
decreases
32
What is the correlation coefficient formula?
Pij = COV/STD.iSTD.j
33
What taxes are US Treasuries subject to?
federal tax
34
Are duration and maturity positively correlated?
Yes
35
Would the long maturity of a bond would be most affected by an interest rate change?
Yes
36
What is the return on equity formula?
Earnings available for Common EPS
_____________________________________
Common equity (net worth or book value)
37
What is the dividend payout ratio
Common dividend paid
_____________________________________
Earnings available for common (EPS)
38
What is the stock's yield formula?
Dividends
_________________________
market value per share
39
An indifference curve of a highly risk-averse investor is likely to appear to be?
Steep
40
What is the most important consideration relative to the Markowitz efficient frontier?
Risk
41
What is the Capital Market Line?
Is the risk between risk and return on a portfolio rather than one on an investment
42
What is the Security Market Line?
It can be used to value any asset, either an individual or portfolio , also known as Capital Asset Pricing Model (CAPM)
43
Which of the following are probability distributions?
1. Normal
2. Traingular
3. Uniform
4. Log normal
All of them
44
Is the Dow Jones industrial average price weighted?
Yes
45
What is the Dow Theory?
It is a method that is presumed to identify the top of a bull market and the bottom of a bear market.
46
What does Alpha indicate?
Indicates how the portfolio manager performed relative to a benchmark, which is generally a stock index
47
Is a REIT considered a current asset?
YES
48
What type of Risk does immunization reduce?
interest rate risk
49
A portfolio comprised of bonds is generally most susceptible to which type of risk?
Interest rate risk, reinvestment rate risk, market risk, purchasing power risk
Bonus: Are affected by DRIP
50
Is a CD (6 month term) liquid?
Yes
51
When selecting a fund and the R2 is high, should you pick the R2 or Treynor?
Treynor because R2 isn't based on performance
52
Does the Markowitz use standard deviation or beta as measure of risk?
Standard Deviation
53
The graph for efficient frontier if asset below the line it is what
Overvalued
54
When would a publicly traded corporation issue new bonds?
1. Bonds are selling at a premium
2. Interest rates are expected to rise
3. Interest rates have fallen
55
Do bonds with lower coupons generally experience a greater interest rate change sensitivity and prive change than do bonds carrying a higher nominal interest rates?
Yes
56
Are STRIPS most often used by a pension plan? Why?
Yes, because they are tax deffered
57
When interest rate decline what do client want to own?
longer term bonds
58
Do all funds charge shareholders an expense fee for operating expenses, which includes managing costs?
Yes
59
How to calculate current yield?
Income/market value
60
What is the formula for the current rate when it is not given?
Market value/Number of shares owned
Coupon rate
_________________
Market value/number of shares
= Current rate
61
When someone borrows money from a corporation with no intent to repay the debt it is called what?
Substance over form
62
What is the penalty for tax fraud?
75% of tax due
63
How to avoid penalty for estimated tax?
Lessor of the following:
1. 90% of the current's year tax liability
2. 100% of the prior year's liability (or 110% if the prior year's AGI exceeded $150,000)
64
What property classifies for Section 179?
Only 1245 property
65
What consists of the medical expense deduction?
1. It is not deductible if it has been reimbursed
2. It is subject to 7.5% of AGI floor
3. It is not deductible unless you itemize
4. It includes medical insurance premiums
66
Is child support included in gross income?
No
67
What is the child care credit?
limit to 3,000 for dependent or $6,000 for two or more x 20% for credit
example $6,000 x 20% = $1,200
68
A gift is subject to what type of tax?
gift tax or 40%
69
Are personal exemption suspended from 2018 through 2025?
Yes
70
When is Alimony excluded?
before 2019
71
When you claim a casualty loss?
Under TCJA, the loss must be from a federally declared disaster
72
When a personal casualty loss (federally declared disaster), occurs do you need to use basis to determine the value to calculate a casualty loss?
Yes
73
Is the phase-out of itemized deductions eliminated for tax years 2018 through 2025?
Yes
74
Do you subtract the standard deduction from or for AGI
From
75
How is FIFO reflected on the balance sheet?
Current Costs
76
What is the hybrid method?
Use any combination of cash, accrual, and specifically permitted methods of accounting if the combo reflects income and is consistently used
77
Can S Corporation use NOL to adjust future years' income?
No
78
What is the corporate tax rate?
flat 21%
79
Does a corporation help a business owner reduce their taxes?
Yes
80
What forms would the owner-employee of a regular corporation receive notice of distributed taxable income?
W-2 or 1099
81
What does DNI determine?
the amount of income to be distributed to the beneficiary as well as the corresponding deduction by the trust
82
What are the MACRS cost recovery percentages for 5-year and 7-year?
5-year
1. 20%
2. 32%
7-year
1. 14.29%
2. 24.49%
83
What is the straight-line cost recovery percentage?
5-Year
1. 10%
2. 20%
7-year
1. 7.14%
2. 14.29%
84
How is trust income used to satisfy a grantor's legal support obligation, how is it taxed?
the trust income will be taxed to the grantor
85
How to calculate average cost per share?
total amount paid/total number of shares
86
1035 exchange formula?
(realized gain)
Total Received = FMV of property acquired + boot (if any) minus Adjusted basis of property
87
Like-kind exchange
(recognized gain)
lessor of gain or boot received
88
Like Kind exchange
(substitute basis)
FMV of property acquired minus realized gain minus recognized gain
89
What are some approaches to reduce his AMT payable?
1. Increase his taxable income
2. Selling his home (with a large mortgage) and renting a home
3. Paying off his substantial current mortgage balance
ie: you want to increase income
90
What is AMT payable formula?
AMT - regular tax
91
What are preference items concerning AMT calculation
1. Private activity municipal bond
2. Oil and gas percentage depletion/excess Intangible drilling costs (IOC) percentage depletion is the excess depletion over the property's adjusted basis
3. Depreciation (ACRS/MACRS) but not straight line
Remember: IPOD
92
Can you net MPLs?
(Publicly Traded)
No
93
How much may you deduct if you AGI is under $81,000 in losses from active participation in real estate? What is the phase-out?
$25,000 per year, Phase Out 100k to 150k
94
Do STRIPS and zero coupon bonds produce phantom income?
Yes
95
What are the exceptions to passive loss for real estate?
material and active participation
96
3 year recapture for Alimoney
Year1 to Year 2 - (37,500+payment x 2) = Recapture
97
What is the donation of stock to charity using FMV?
30% of AGI; then look at FMV of stock
98
Are entertainment expenses deductible?
NO
99
What type of stock can an S Corp issue and what are its rights?
Can issue one kind of voting stock (common), but it can be voting rights or voting rights
100
If owner is making direct loans or capital contribution should they choose S corp?
Yes
101
How to calculate personal property insurance? example furniture
Lesser of basis of FMV
Less insurance coverage
Less Floor
Less 10% of AGI
casualty loss
102
Is general partnership loss fully deductible?
Yes
103
When does the historical rehabilitation credit phase out?
$200,000 of AGI
104
105
Does the low income housing credit have a phase out?
No
106
When must you use the accrual method?
exceed $29 million
107
What benefits plans are in expensive and help retain employees?
1. Section 125 Plan
2. Group Life Insurance or up to $50,000 of Death Benefit
3. Group Dental Plan (basic benefits)
108
In a 1244 stock (C Corp) qualifies for a write off on a joint tax return up to $100,000 as an ordinary loss, and in excess will be capital losses ($3,000 per year). Can you do this?
Yes
109
What can you deduct for Charitable gifts of inventory?
based on what the property can be sold for, not FMV. Usually 50% of its FMV
110
What is S Corporation's employment income subject to?
FICA (7.65%), not self-employment taxes
111
If your under normal retirement age and you income is above what amount is the reduction?
above $59,520 $1 deducted from benefits for $3 of earned income.
112
What are the taxation rules regarding social security benefits?
person's income plus half of his/her social security benefits is more than MAGI
>$34,000 single
>$44,000 married
85% will be included in taxable income
113
Wha
114
What is the maximum permissible contribution amount to a defined benefit plan?
the amount of the permissible annual contribution to a defined plan is actuarially determined.
The benefit is based on $345,000 (2024). Max annual benefits are $275,000.
115
Which types of qualified retirement plans may have forfeitures allocated to increase the balances of the remaining participation?
Money Purchase Plan and Profit Sharing Plan
116
What type of defined benefits is this called?
$4,800 avg. monthly x 1.25% x 25 years of service
Unit benefit
117
What does an increasing investment returns have on money purchase plan in regards to employer contributions?
employer contribution would not change
118
If forfeitures are not allocated, what effect does that have on employer contributions?
Employer contribution would decrease
119
What is the maximum retirement benefit amount for a participant in a target benefit plan?
Value of the participants account at retirement
120
What is the Social Security reduced benefit amount formula?
PIA - [(number of months before FRA)xPIA]
Reduction amount is in brackets
121
Can a SEP & Stock bonus plan be integrated with Social Security?
Yes
122
Is the excess method, the permitted disparity is the lessor of the base benefit or 26.251 for a defined benefit?
Yes
123
Defined contribution plan integration, what are the rules of the permitted disparity?
1. Wage base $168,000
2. 5.7% permitted disparity
3. <5.7% add base percentage
124
For-profit sharing or money purchase plans, what if the short cut for contributions is net Schedule C income?
Multiply by 12.12 for 15% contribution for non-owner employees
Multiple by 18.59% for 25% contribution for non-owner employees
125
What is the 10% early withdrawal exception to the 10% in regard to medical expense and insurance premiums?
1. Medical expenses in excess of 100% of AGI
2. Distributions used to pay medical insurance premiums after seperation from employment (unemployment compensation has been received for at least 12 weeks and withdrawals in the year of unemployment or year immediately following unemployment)
126
Does a 457 plan (any type) count toward active participation for IRAs?
No
127
If an employer has a SEP can he adopt another retirement plan for his employees?
No
128
What are some SARSEP guidelines?
1. 415 limits apply (total addition equal to the lesser of $69,000 or 25% of comp)
2. New employees, as they join the firm can be added to the plan as long as the employer has no more than 25 workers
3. The maximum 2024 deferral is $23,00 (not including catch ip contributions)
4. All contributions are 100% vested immediately
129
Are SEP Contribution not subject to FICA or FUTA?
Yes, employer contributions
130
Can a TSA be funded with common stock?
No
131
Can you rollover a 457 plan into a IRA?
No
132
What are the contributions limit for a uni 401(k)
employee $23k plus add employer profit sharing contribution to a cap of $69,000 plus a catch-up contribution of $7,500
133
Is industrial production a coincidental economic indicator?
Yes
134
Can the federal government lower the prime rate?
No, banks do that
135
Was the SEC established by the investments advisors act of 1934?
Yes
136
Con you control funds or direct investments in a 529 plan?
No
137
If the question says "always use," is the checking account available for emergency funds?
No, because it is used for daily living
138
When calculating the current ratio do you go to Cash Flow to get yearly amount of payment for mortgage?
Yes
139
What is the minimum license needed to sell 529 plan?
Series 6
140
Are annual limited partnerships income in excess of $1,000 exposed to UBTI current taxation?
Yes
141
Is PBGC is a reporting agency?
No
142
If you do a distribution from a qualified plan due to serparation from service at age 55, are you exempt from the 10% early withdrawal penalty?
Yes
143
If you are working, do you to take an RMD from a 401(k), if above 73
No, you do not need to
144
If you take money out of a qualified plan are you subject to a 10% penalty and the company taking out 20% in taxes?
Yes
145
Which Type of plan is not mandatory for an employer to take out 20% for taxes?
nonqualified, such as a Simple IRA
146
What does RBD mean?
The required beginning date is April 1st of the year following the year in which the covered individual attained age 73.
147
What are some parameters around a Rabbi Trust?
1. The Rabbi trust is informally funded
2. The employer may fund the rabbi trust from the general asset of the company
3. Employer contributions to the rabbi trust are not subject to payroll taxes until they are distributed tot he employee
4. Rabbi trusts may be used for purposes other than discharging the obligation to the employee
148
What is the maximum amount an employer can contribute to a qualified plan?
100% of salary or $69,000
148
What happens when more than 100,000 ISOs vest in the same year they are granted?
only the 1st 100,000 are treated as ISOs with the excess treated as NSOs
149
Can ESOPs be integrated with Social Security?
No
150
What is the max contribution for net schedule C income?
Multiply by 12.12% for 15% contribution for non-owner employees
Multiply by 18.59% of 25% contribution for owner-employees
>168,000 = (plan contribution %)/(1+plan contribution)
151
Is the maximum contribution match under a Simple by the employer is $16,000?
Yes
152
Can SEPs provide loan provision?
No
153
Are salary deferrals subject to FICA and FUTA?
Yes
154
Is the loan interest deduction disallowed when municipal bonds are pledged for a loan? (margin)
Yes
155
Is a secular trust not subject to the creditors of the employer?
Yes
156
Can a secular trust use a variable annuity?
Yes
157
Can simple plans offer plan loans?`
No
158
Are short puts bullish position that provides income?
Yes
159
What is the most stringent eligibility with a grade vesting schedule for a money purchase plan?
21 and one year
160
Do money purchase and target plans don't permit catch-up contributions
No
161
Are loans in a qualified plan subject to ordinary income tax or the 10% early withdrawal penalty?
No
162
Profit sharing top heavy rules
1. Greater of 3% for all eligible employees' compensation or the percentage contribution for any key employee receiving a contribution of more than 5%
2. 2 years to complete the corrective action
163
Does a trust have a fixed income for a number of years?
Yes
164
What are generally fiduciary duties?
(estate)
1. to disclose fact affecting any transaction
2. to self-deal
3. to make assets of a trust or estate productive
4. to profit from the fiduciary standard
165
Is tenancy by enterity protected from the claims of both spouse's creditors?
No
166
Will real property owned as tenancy by entirety avoid ancillary probate?
No
167
Tenancy in common will pass from father to son by his will?
Yes
168
Does appreciated community property receive a full step up in basis at the death of the first spouse in the community property state?
Yes
169
Tenancy in common will pass from father to son by his will?
Yes
170
What are the exclusion from the gross estate?
1. Life insurance owned by other's (even when the decedent is the insured)
2. Completed gifts (donor parted with dominion and control)
3. Life estate for the decedent's own life only. (a retained life estate is included)
171
If a 5 or 5 power is exercised, is any included in the estate?
No
172
What happens if a 5 or 5 power is not excercised?
5,000
or
5% of the total value of the fund subject to the power at the time of laps.
$5,000 or greater than 5%
173
Why is cash value not included in regard to life insurance?
the insurer only pays a death benefit (unless the policy is a UL or VUL option)
174
What is the formula for a taxable gift in shares?
FMV - 18,000 gift tax exclusion
175
When a gift tax is paid, do you only bring back taxes paid and GSTT into the gross estate?
Yes
176
Is form 706 used to file federal estate tax?
Yes
177
What is the federal tax exemption in 2024?
$13,610,000
178
If an individual is legally incompetent, can you draw up a durable power of attorney, a living will, revocable trust, or durable power of attorney for health care?
No, it must be executed prior to the principal's incapacity
179
Does a non-durable power of attorney survive the principal's incapacity?
No
180
Are trusts more recognizable in more states than the DPOA
Yes
181
Will a gift to a charitable remainder trust (CRT) at death for the benefit of the grantor's spouse be included in the grantor's gross estate?
Yes
182
Can an irrevocable trust be both a simple and complex trust?
Yes
183
What is distributed net income?
The trustee holds legal title to the trust property
184
Does the trustee holds legal title to the trust property?
Yes
185
What rights does a surviving spouse have in regards to a qualify terminal interest property QTIP?
Demand that all of the trust assets be income-producing. If the trust does not produce income, the trustee can sue.
186
Who has control over the remainder in A,B,C trust
A= beneficiary
B= Grantor; Ultimate beneficiaries
C= Grantor; Ultimate beneficiaries
187
What are the guidelines for the gift tax annual exclusion?
1. Can't be for future interest
2. Irrevocable must have crummy provisions
3. UTMA account
188
Does a CRUT provide income with inflation hedge and the ability to change the choice of charities?
Yes
189
What is a pooled income fund?
A fund maintained by a qualified charity that contains commingled donations from many sources and that allows a donor's estate an estate tax charitable deduction for the remainder interest
190
If the gift has no incident of ownership by the decedent, is included in the gross estate?
No
191
Does STCG and LTCG count as investment income?
Yes
192
If you make a net gift and have your child pay the taxes, what is the formula?
net gift/1.40
193
Which intra-family planning techniques are used when the property owner needs income?
GRAT, installement sale & SCIN
194
Does private annuity intra-family create phantom income?
Yes
195
What are some techniques that are considered freezing techniques for transfer tax purposes?
1. GRAT
2. Preferred stock recapitalization
3. A QRPT
4. A Private Annuity
5. A SCIN
196
When transferring assets to a GRAT, should you transfer assets that appreciate, such as stock?
Yes, income issues are distant secondary issue
197
Does freeze suggest recapitalization for an asset like a business?
Yes
198
Does the estate tax affect the GSTT?
Yes
199
What are the requirement for special use valuation in terms of real property?
be used for real property held in conjunction with a farm, ranch or closely held business
200
Can property owned as tenants by the entirety be disclaimed?
No
201
What are 50% organizations?
1. All churches, schools, and hospitals
2. All organizations organized and operated for charitable, religious, educational, or literary purposes or for the prevention of cruelty to children or animals. (United Way, Red Cross, humane society, etc...)
202
What are 30% organizations?
1. Private non-operating foundations
2. Fraternal orders
3. War veteran's organizations
203
If you own a home in common with a spouse is it subject to probate?
Yes
204
Can dividends be split equally in JTWROS?
Yes
205
Is a decedent fractional interest in a tenancy in common property subject to probate?
Yes
206
Does tenancy by the entirety avoid probate?
Yes
207
Does an insurance policy owned by the decedent under which his/her spouse is the insured include in probate?
Yes
208
What is HEMS?
The person's right to exercise power is limited by the need to fund Health, education, maintenance, and support; it is not a general power.
209
Can a bypass trust qualify for the material deduction?
Yes
210
Suppose the donor/custodian dies before the child comes of age. In that case, it might be contended that the donor passed a general power of appointment controlling the beneficial enjoyment of the UTMA account?
Yes
211
Do you must file jointly if you are electing gift splitting?
Yes
212
The $13,610,000 exemption is not elective, it must be used if available for gifts
Yes
213
For GSTT the use of the $13,610,000 exemption generation skipping transfer is electric?
Yes
214
Can GSTT use now or later; indirect skips
Yes
215
A benefits reduce once the FICA covered worker reaches full retirement age (67)?
No
216
What is the percentage long term disability benefit that cover income?
50% to 60% of earnings. The percentage is scaled down as earnings increase, usually greater than $400k.
217
If the parent is a sole proprietor or self-employed, is the child subject to FICA or self-employment income if under 18?
No
218
Do private activity municipal bonds defer taxes?
No
219
At death will the whole life cash value be liquid?
Yes
220
What is mental accounting?
entails looking at sums of money differently, depending on their source or the intended use
221
Examples of qualitative data
1. The client would like to retire at 60
2. The client would like to provide fully paid education program for his/her child
3. Risk Tolerance
222
Examples of quantative
1. General family profile
2. Assets allocation for current investments
3. Names of financial advisors
4. Names of trustees and successor trustees
223
What is quantative?
information that is factual
224
What is qualitative?
Information addresses attitudes, emotions, and desires.
225
What value are assets shown on the statement of financial position?
current fair market value
226
What is another name for statement of financial position?
Balance sheet
227
Example of cash/cash equivalents
1. Cash
2. Checking accounts
3. money market deposit account (bank)
4. money market mutual fund (security)
5. Savings accounts
6. CDs close to maturity
7. Laddered CDs
228
What is a time deposit account?
certificate of deposit (CD)
229
What does SIPC insure
investors against losses arising from the failure of the brokerage firm
230
What is the investment advisors act of 1940?
defines the role of responsibilities of an investment adviser
231
The FDIC limit is $250k, how is that distributed for each account holder?
Individual - 100%
Joint - 50%
Rollover - 100%
CD & Money Market - Combined $250k
232
What do you solve for when the dollar amount must be available when the child is 18?
Present value
233
Qualified tuition program is considered a gift of what?
future interests
234
UTMA accounts are considered a gift in what?
present interest
235
How to calulate the American opportunity credit? What is its max?
$2,500 max
100% of the first $2,00
25% of the next 2,000
236
What is the max distribution for both 529/Coverdale k-12
529 - $10k/yr
Coverdell ESA - no limit
237
How to calculate kiddie tax
1. 1,300 standard deduction
2. The next $1,300 is taxed at the child's income tax rate of 10%
3. Amounts greater than $2,600 are taxed at the parents marginal tax rate
If the child earned income greater than the standard deduction, the amount of earned income plus $450 is used in Step 1.
237
How to calculate college funding?
(STEP 1)
1. PV current cost of one year of college (PV)
2. n= number of years before college starts
3. i = rate college costs are increasing
4. FV=solve
238
Determine the amount must be available when the child is age 18?
(step 2)
Put calculator in Begin Mode
1. PMT - The cost of the first year of college. Calculated in Step 1
2. n= the number of years of college that need to be paid for
3. i= Real Rate of Return [(interest rate/inflation)-1)x100
4. solve for PV
239
What is a leading economic indicators?
1. Aug weekly hours for production workers in manufacturing
2. Initial claims for unemployment insurance
3. New manufacturing orders
4. Vendor performance measure as a % of company performance (slower deliveries)
5. Contracts and orders for plant and equipment.
6. New private housing units
7. Interest rate spread
8. Stock prices 500 common stocks
9. money supply
10. Index of consumer expectations
240
How can tax be excluded from a settlement that is awarded due to work-related injury?
When a single premium immediate annuity is purchased by the party obligated to make the damage payments, the entire amount of each periodic payment is excluded by the taxpayer receiving the payments.
241
Determine how much parents need to save? (step 3)
1. FV= this is amount needed for 4 years calculated in step 2
2. n = number of years until college begins
3. i = after-tax return
4. Solve for PV
242
What are the lagging indicators?
1. Average duration of unemployment
2. Average prime rate charged by banks
3. Commercial and industrial loans outstanding
4. Ratio of consumer installment credit outstanding personal income
5. Change in the consumer price index for services
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What qualifies as alimony (tax deductible) priot to 1/11/19?
1. Cash payments from the payor or spouse to 3rd parties if made pursuant to the divorce instrument from an obligation of the ex-spouse, such as payments of the ex-spouse's rent, mortgage, tax or tuition liabilities
2. Premium payment made by the payor or spouse for life insurance owned by the payee spouse.
