Quiz 1

Question 1

A “qualified plan” generally refers to a plan governed under IRC Section 401(a). Only the ESOP falls under those rules. The “qualified” stock option plan describes an ISO, which is not a qualified plan (it generally discriminates). The SEP and SARSEP are business sponsored IRAs, but __________

Answer 1

not qualified plans.

Question 2

The bargain element on exercised incentive stock options and NY City income tax are examples of ________.

Answer 2

add back items for the purposes of calculating AMT

Question 3

What are Section 415 limits?

Answer 3

100% of compensation or $66,000 (2023)

Question 4

Under the CFP® Board Code of Ethics, the scope of the client relationship must be mutually acceptable to both client and planner. When it is no longer so either party can ________ the relationship.

Answer 4

terminate

While the 1940 Investment Advisors Act does prohibit assignment of the relationship (Answer A) terminating the relationship is not assigning it to another.

Question 5

A zero coupon bond’s duration is ______ its maturity.

Answer 5

equal to

longer duration, more sensitive to interest rate changes

Question 6

In the ______ approach to investing, the investor’s risk tolerance and constraints are assumed to be constant over time. Changing market conditions would justify changes to portfolio allocation.

Answer 6

Tactical

Question 7

For a single taxpayer, the 85% of SS retirement benefits being taxable is triggered when the provisional income exceeds ______ in any given year.

Answer 7

$34,000

Question 8

The charitable income tax deduction is generally based on the _____ of the stock as of the date when it is transferred to the charity.

Answer 8

Fair Market Value

Question 9

A credit is _____ valuable to a low bracket taxpayer than a deduction would be.

Answer 9

More

Question 10

The intent of immunization in a bond portfolio is to _____ the average duration of the portfolio to a pre-selected time horizon.

Answer 10

match

Question 11

Biggest risk associated with establishing an unfunded ILIT?

Answer 11

The biggest risk is that an existing policy will be included in the grantor’s estate if the grantor dies within 3 years of the transfer.

Question 12

Basis to a donee is _________ by the gift tax paid by the donor that is attributable to the appreciation of the gift.

Answer 12

increased

Question 13

Under ERISA rules, a profit sharing plan may exclude from participation employees working fewer than __________ hours per year.

Answer 13

1,000

Question 14

The maximum charitable income tax deduction for gifts of cash to the ASPCA is now _______ percent of your AGI (possibly 100% for 2023). The maximum charitable income tax deduction for gifts of appreciated securities to a public charity remains at _________ percent of the taxpayer’s AGI if the appreciated securities are valuated at basis. If FMV is used for appreciated securities, the 1st year deduction is limited to _______% of AGI.

Answer 14

60 /50 /30

Question 15

Income distributed from a (Section 2503-(c)) minor’s trust ___ taxed under “kiddie tax rules”

Answer 15

is

Question 16

Corporate-owned life insurance ______ triggers the corporate AMT.

Answer 16

No longer

In 2017 tax cuts and jobs act (TCIA) permanently repealed the corporate AMT.

Question 17

The Child Tax Credit is worth up to $2,000 per qualifying child. The age cut off remains at _____ (the child must be under _______ at the end of the year for tax payers to claim the credit). Refundable portion of the credit is limited to $1,600.

Answer 17

17 / 17

Question 18

The 2017 Tax Cuts and Jobs Act ________ the dependency exemption.

Answer 18

repealed

Question 19

Exchanges of domestic real estate for other domestic real estate qualifies for like-kind exchange tax treatment providing deferral of capital gain.

_________ is no longer eligible for like-kind exchange treatment.

Intangibles such as copyrights and mineral rights never were eligible for like-kind exchange treatment.

Answer 19

Equipment

Question 20

While the continuing education requirement for CFP® Certificants is 30 hours for each two-year reporting period, only _____ of the thirty hours must be in ethics training.

Answer 20

2

Question 21

Any CFP® Professional must act as a __________ whether providing financial planning, or in this case, financial advice.

Answer 21

fiduciary

Question 22

The Retirement Savings Contributions credit is designed for low to moderate income taxpayers and matches a percentage (based on AGI) of the taxpayers IRA, retirement plan or ABLE account contributions but not 529s. The maximum credit is $_____(single) and $_______ (MFJ) and no credit is available for taxpayers over $33,000 (single) and $66,000 (MFJ) AGI.

Answer 22

2,000 / 4,000

Question 23

A CFP® professional is discussing an adjustable mortgage with a client. What rate is used most often as the base rate for resetting the mortgage rate?

Answer 23

SOFR