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Danko Self-created > Post Study Cards > Flashcards

Post Study Cards Flashcards

1
Q

What does it mean when npv equals zero?

A

Interest rate is same as required rate of return. Good investment.

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2
Q

Which calculations are always in begin mode?

A

One college tuition two retirement benefits three family needs

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3
Q

Which calculations are always in end mode?

A

Retirement plan contributions, Bond interest, mortgage payments

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4
Q

What does it mean when npv is below required rate of return?

A

Bad investment.

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5
Q

Child tax credit

A

Child tax credit of $2,000 for each qualifying child under 17. Credit phased out above $400,000 Magi mfj and 200,000 single. 1400 per child refundable credit

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6
Q

Cfod tcja

A

To be replaced

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7
Q

Child Care Credit

A

Children under age 13, non-refundable 20% of expenses paid for care of a dependent that allows the taxpayer to work in an income. Qualifying expenses limited to $3,001 dependent 6,000 two or more

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8
Q

Qualified adoption expenses (4)

A

Eligible children 17 or younger any age was a US citizen or resident alien, who has special needs court costs attorney fees cost to adopt a foreign child no surrogate no spouse’s child claim in the year of adoption finalized

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9
Q

Elderly and disabled credit (3)

A

Person must be age 65 permanently and totally disabled

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10
Q

Foreign tax credit

A

Credit for foreign tax paid

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11
Q

Net operating income calculation

A

Potential rental income minus collection in vacancy costs minus operating expenses

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12
Q

Installment sale gain calculation

A

Determine gain recognized in year of sale and each subsequent year. Profit over total contact price equals gross profit percentage. Long-term capital gains

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13
Q

YMCA calculations premium Bond

A

To be replaced

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14
Q

YMCA calculations discount Bond

A

To be replaced

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15
Q

Question gp-9. Steve and Barb’s budget outflows exceed their income and they want to retire now period what option would you recommend they consider?

A

Obtain a reverse mortgage

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16
Q

What is irr?

A

It’s the rate at which the present value of the future cash flow equals the cost of the investment

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17
Q

What do we know when irr is greater than expected return?

A

The investment is good

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18
Q

What keys are important in irr?

A

CFO and cfj

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19
Q

Devaluation

A

Lowering of value of a currency relative to another country’s currency

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20
Q

Reevaluation

A

An increase in the value of a currency relative to another country’s currency

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21
Q

What variable does rho signify?

A

Correlation coefficient

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22
Q

What is correlation coefficient?

A

Tb replaced

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23
Q

What number are two perfectly positively correlated securities?

A

1.0. this means they move exactly together

24
Q

What is the number for two perfectly negatively correlated securities?

A

-1.0. they move exactly oppositely. This would imply full mitigation of risk

25
Q

How do you get the correlation coefficient mathematically?

A

Divide the covariance number into standard deviations of security one times standard deviations of security 2

26
Q

CV

A

Coefficient of variation, or risk per unit of expected return

27
Q

Standard deviation definition

A

Measures variability of returns. Measures total risk

28
Q

What does beta measure?

A

Volatility of returns in the portfolio and measure of systematic risk

29
Q

Mnemonic for how to use duration to manage Bond portfolios

A

UPS f a l l e n

If rates will rise, shorten duration
If rates will fall, lengthen duration

30
Q

HALE

A

Health education, law, engineering. personal Service Corp.

31
Q

Where is taxable income or loss reported for a sole proprietorship?

A

On schedule c, loss carries to the first page of the 1040

32
Q

What form is the partnership tax return?

A

1065, but for information purposes only

33
Q

What is the IRS section concerning subchapter s corps?

A

1120s

34
Q

What type of interest can be deducted without any limits?

A

Sole proprietor loans, on schedule c

35
Q

How is a corp shareholders adjust their basis each year?

A

By the profit or loss for their share for the year

36
Q

Is the owner’s salary in an s corp subject to FICA?

A

Yes, FICA and futa

37
Q

Section 1231

A

Games over and above macrs, to appreciation

38
Q

Section 1244

A

Governs stock in an s corp

39
Q

Section 179

A

Tbr

40
Q

Section 121

A

Governs capital gains in your personal residence

41
Q

Section 2032a

A

Governs valuation of a closely held especially land-based business, for a state purposes

42
Q

Section 403b

A

Governs retirement plan for schools school districts and nonprofits 501c3s

43
Q

Section 6166

A

Governs paying for estate taxes with installment sales when closely held businesses especially farming and ranching are involved

44
Q

Section 1035

A

Governs exchanges of insurance products

45
Q

Section 1031

A

Governs exchanges of like property, especially real estate

46
Q

Section 303

A

Governs arrangements for financing from shares of a closely held business especially farming and ranching

47
Q

SPAG

A

Special purpose rbr

48
Q

What’s a disqualifying disposition?

A

Ex and sale within 1-2 years iso

49
Q

What is the stepped up basis at death in community property?

A

Jointly owned assets step up for both shares

50
Q

What is cost recovery recapture?

A

It means that your income recaptures the depreciation and that now becomes income when you sell an asset? BUT does your basis change? And does this matter for individual taxes? Of course you don’t usually take deprec unless you own real est

51
Q

What are other names for the bypass trust?

A

B trust, unified credit shelter trust, nonmarital trust, family trust, applicable credit amount

52
Q

Why bypass trust?

A

Usually 11,580,000, equal to exemption. To give decedent postmortem control over the property. At surv spouse death, remaining assets pass estate tax free to the remainder bennie

53
Q

QTIP

A

Qualified terminal interest property trust

54
Q

Q-tip trust simple or complex?

A

Simple

55
Q

What does q-tip trust do?

A

Decedent wishes to provide surviving spouse with stream of income for life yet also wishes to qualify property for marital deduction.

must be included as an asset in the gross estate of surviving spouse

56
Q

Keys to a q-tip trust (l a m e)

A

Lifetime income interest for the spouse
Annual payments to the spouse
Mandatory payments to the spouse
Exclusively for the spouse

57
Q

What are personal service corporations a subset of?

A

C Corp

Danko Self-created (10 decks)

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