Triggers Flashcards
Imputed Interest - Personal Loan
When loans are below $10,000, the imputed interest is charged based on what?
Imputed Interest DOES NOT APPLY (No Interest) when loans between individuals are less than $10,000; except when the borrowed funds are used to purchase income-producing property.
5 exceptions when imputed interest does NOT apply:
- Loans between individuals totaling $10,000 or less; except when the borrowed funds are used to purchase income-producing property.
- Corporate loans and compensation-related loans totaling $10,000 or less.
- Debt subject to original issue discount (OID) provisions.
- Sales of property for $3,000 or less.
- When all payments are due within six months.
When loans are greater than $10,000 and up to and including $100,000, the imputed interest is the lesser of:
Between $10,000 - $100,000 = THE LESSER OF!
- the AFR, or
- the borrower’s net investment income.
*EXCEPT If the borrower’s net investment income is $1,000 or less, imputed interest will not apply.
Imputed Interest - Personal Loan
When loans exceed $100,000, the imputed interest is charged based on what?
When loans exceed $100,000, the imputed interest is charged based on the Applicable Federal Rate (AFR).
Form 8938 Foreign Financial Assets Threshold Requirements
Unmarried or Separate Tax Return (US Residents)
- more than $50,000 on the last day of the tax year
- more than $75,000 at any time during the tax year.
Form 8938 Foreign Financial Assets Threshold Requirements
Joint Tax Return (US Residents)
- more than $100,000 on the last day of the tax year
- more than $150,000 at any time during the tax year.
Form 8938 Foreign Financial Assets Threshold Requirements
Unmarried or Separate Tax Return (Non-US Residents)
*Can still be US Citizens but living abroad
- more than $200,000 on the last day of the tax year
- more than $300,000 at any time during the tax year.
Form 8938 Foreign Financial Assets Threshold Requirements
Joint Tax Return (Non-US Residents)
*Can still be US Citizens but living abroad
- more than $400,000 on the last day of the tax year
- more than $600,000 at any time during the tax year.
Estimated Quarterly Taxes
If the taxpayer’s AGI for such prior year was $150,000 or less.
To avoid a penalty on the underpaid amount, the estimated quarterly payments must be 25% of the lesser of the following amounts:
100% of the tax liability shown on the return for the prior year.
90% of the tax liability shown on the return for the current year.
Estimated Quarterly Taxes
If the taxpayer’s AGI for such prior year was more than $150,000 ($75K MFS).
To avoid a penalty on the underpaid amount, the estimated quarterly payments must be 25% of the lesser of the following amounts:
110% of the tax liability shown on the return for the prior year.
90% of the tax liability shown on the return for the current year.
How much rental losses can someone deduct if they make (+ / -) $100K - $150K?
Taxpayers may deduct up to a $25,000 loss provided they “actively participate”.
Active participation requires:
1. Taxpayer ownership of at least 10% of the property, AND
2. Substantial involvement in managing the property.
The $25,000 limit is phased out in the MAGI range from $100,000 to $150,000, regardless of your filing status (single, MFJ, or HOH).
How much stock does a related entity taxpayer need to own to be considered a ‘related person’ under IRC Section 267?
Under IRC Section 267, related persons are defined as a:
- Spouse
- Child
- Grandchild
- Parent
- Sibling
- Related entities: if the taxpayer owns more than 50% of the stock (corporation) or interests (LLCs, partnerships).
1031 Exchanges
A taxpayer has HOW MANY DAYS from the date of the transfer of the relinquished property to identify potential replacement properties.
A taxpayer has 45 days from the date of the transfer of the relinquished property to identify potential replacement properties.
1031 Exchanges
The replacement property must be received, and the exchange completed no later than HOW MANY DAYS after the transfer of the property relinquished in the exchange or the due date (with extensions) of the tax return for the tax year in which the transfer of the relinquished property occurs (whichever is earlier).
The replacement property must be received, and the exchange completed no later than 180 days after the transfer of the property relinquished in the exchange or the due date (with extensions) of the tax return for the tax year in which the transfer of the relinquished property occurs (whichever is earlier).
Useful Life of Depreciable Assets
- Cars
- Computers
- Heavy Machines
- Office Furniture
- Residential Real Estate
- Non-Residential (Commercial) Real Estate
CC HO RN
Useful Life of Depreciable Assets
- Cars = 5 Years
- Computers = 5 Years
- Machines = 7 Years
- Furniture = 7 Years
- Residential Real Estate = 27.5 Years
- Non-Residential (Commercial) Real Estate = 39 Years
CC MF RN
Margin Call Formula
(Stock can drop to this price before getting margin called)
(1 - Initial Margin %) / (1 - Maint. Margin %) x Purchase Price
How much to deposit if you get margin called?
Purchase Price = $120
Shares = 200
Initial Margin = 50%
Maint. Margin = 30%
If price drops to $65, what amount do you need to deposit to cover the margin call?
Step 1: Based off Current Stock Price = $65 x .30 = $19.50 is what we need to have per share
Step 2: Initial Purchase = $120 x 50% Initial Equity = $60
Step 3: Stock Loss = $120 - $65 = $55
Step 4: $60 (Initial Equity) - $55 (Stock Loss) = $5 IS NOT ENOUGH THAT WE NEED TO HAVE!
Step 5: $19.50 - $5 = $14.50 x 200 Shares = $2,900
What are the AIME bend points used to determine the PIA monthly Social Security Retirement Benefits?
- Average Indexed Monthly Earnings (AIME) Adjusts (indexes) each year’s earnings to present-day dollars.
- Based on 35 best years of indexed earnings.
- Calculates average monthly indexed earning.
- AIME is then used to calculate Primary Insurance Amount (PIA)
- PIA is the monthly retirement benefit at Full Retirement Age (FRA) 67.
- In 2024, the bend points are $1,174 and $7,078. (If AIME is below $1,174, the SS benfit is only 90% of it).
What is the self-employment (SE) tax rate for a self-employed person with $100,000 net earnings from self-employment?
$15.30%
A self-employed person must pay both the employer (7.65%) and the employee (7.65%) share of the Social Security self-employment tax. This totals 15.30%
When an NQSO or ISO is execised, and the exersice price is higher than the grant price (Bargain Element) the employee purchased at, what tax will the employee pay on each type of stock option?
NQSO = Ordinary Income Tax
ISO = No Tax
How much income is 1 Social Security Credit?
And what is the max credits per year, and total needed for SS Retirement Benefits?
$1,730 = 1 Credit
4 Credits Max Per Year
Need 40 Earned Credits for SS Benefits (10 Years of Work)
Self Employment Tax Rates
- Multiply net earnings from SE x .9235
- Social Security = 12.4% up to $168,600
- Medicare = 2.9%
- Total = 15.3% up to $168,600
2.9% after $168,600
Steps for Calculating SEP IRA Contributions for owners
Example $100,000 Net Earnings
- $100,000 x .9235 x .153 = $14,129.55
- $14,129.55 x .50 = $7,064.78
- $100,000 - $7,064.78 = $92,935.23
- Adjust SEP Rate = .25 / (1.25) = .20
- $92,935.23 x .20 = $18,857.05
- $18,857.05 / $100,000 = 18.59%
What are the two nuances with adding up Provisional Income for Social Security taxation purposes?
- Only include 50% of Social Security Income
- Include Tax Exempt Income
For Social Security Taxation on Provisional Income, what are the break points and taxation %’s for Single?
$25K + $34K
50% + 85%
- $0 - $25K = 0% Taxable
- $25K - $34K = 50% Taxable
- +$34K = 85% Taxable
For Social Security Taxation on Provisional Income, what are the break points and taxation %’s for MFJ?
$32K + $44K
50% + 85%
- $0 - $32K = 0% Taxable
- $32K - $44K = 50% Taxable
- +$44K = 85% Taxable
For Social Security Taxation on Provisional Income, what are the break points and taxation %’s for MFS?
- +$0 = 85% Taxable
Applies only if living in the same household during the year.
What is the maximum percentage of Social Security benefits that may be subject to income tax?
The maximum percentage of Social Security benefits that may be subject to income tax is 85%.
A minimum of 15% will always be tax-free.
Community Property
(In Marriage)
- Money earned by either spouse, post-marriage
- Property purchased by either spouse, post-marriage
- Commingled separately owned assets and community property assets
Separately Owned Property
(In Marriage)
- Property acquired by either spouse prior to marriage
- Gifts to an individual spouse while married
- Inherited assets bequeathed to either spouse, individually, while married
Tenancy by the Entirety
A tenancy by the entirety is a specialized form of joint tenancy with rights of survivorship existing between co-tenants who are married. The estate is based on the common law concept of “spousal unity” - that married couples are treated as one person.
Child’s Standard Deduction
The Greater of $1,300 or the amount of (earned income + $450) up to $14,600
The Crummey powers withdrawal amount is usually limited to the lesser of:
- The annual exclusion.
- The annual contribution made to the trust.
- The greater of $5,000 or 5% of the amount transferred into the trust.
The CFP Hearing Panel is comprised of at least ___ persons.
CFP = 3!
A CFP Hearing Panel must consist of at least three persons. A majority of the Hearing Panel must be CFP® professionals, and a majority must be DEC members.
LTC Benefit Triggers - ADLs (6)
Unable to perform 2 of 6 ADLs for more than 90 Days
or Substantial Cognitive Impairment
What are the 6 ADLs?
- Bathing
- Eating (Feeding Oneself)
- Dressing
- Continence (Maintaining Continence)
- On / Off Toilet
Grooming – The ability to perform basic self-care, such as brushing hair and teeth.
- Transferring
BED COT
What is the 403(b) Special Catch Up?
- Age 50 Catch Up = $7,500
Special Catch Up
* Available for employees with a minimum of 15 years of service with the sponsoring school or 501(c)(3) employer.
* Additional deferral allowance up to $3,000 per year.
* May be used in the same year as age 50+ catch-up.
* Age 50+ with 15 years of service may defer up to $33,500 (2024) ($23,000 + $7,500 + $3,000).
403 = $3K Bonus
What is the 457(b) Special Catch Up?
- Age 50 Catch Up = $7,500
Special Catch Up
* Available for the last three years of service (at plan normal retirement age)
* Unused deferrals from past service
* Up to twice the normal contribution limit ($46,000 in 2024)
* The age 50+ catch up allowance of $7,500 (2024) may not be used in the same tax year as the special catch-up allowance is used.
457 = $46,000
- Section 457 deferrals are NOT aggregated with other salary deferrals in applying annual maximums.
- NOT considered an “active participant” for IRA deduction purposes.
Features in all Defined Contribution (DC) Plans
- Participant-Directed Accounts
- Max EE/ER contributions $69,000
- Max compensation in benefit formula $345,000 (covered compensation limit )
- Vesting at least 3-year cliff, or 2-6 year graded
- Max employer contribution 25% of covered payroll
- Favors younger participants
- Easy to understand
- No PBGC insurance
Features of Traditional Profit Sharing Plan
(Defined Contribution - DC Plan)
- Flexible year-to-year employer contributions (no annual requirement)
- Contribution must be “substantial and recurring” 3 of last 5 years
- 100% employer funded
- Yearly profit not required by company to make contributions
- Allows in-service hardship withdrawals and loans
- ER contribution can be 100% in employer stock
- Typically not subject to QJSA
- “Age-weighted” traditional profit-sharing plan can skew higher plan contributions to older participants
Features of Section 401(k) Plan
(Defined Contribution - DC Plan)
- Cash or Deferred Arrangement (CODA) provision added to profit-sharing plan (most common), stock bonus plan, or ESOP
- EE Contributions up to lesser of 1) 100% of Comp 2) $23,000 (50+ $30,500)
- ER not required to contribute annually but usually matches
- Allows in-service hardship withdrawals and loans
- ER contribution can be 100% in employer stock
- EE’s must be given min. of 3 diversification alternatives for their contributions (elective deferrals)
- If EE participates in multiple plans, contributions are aggregated to max allowed ($23,000 + $30,500)
- EE contributions subject to ADP testing.
- ER contributions subject to ACP testing.
Features of Money Purchase Pension Plan (Defined Contribution - DC Plan)
- Mandatory annual employer contributions
- 100% employer funded
- Defines employer contributions - % of comp
- No more than 10% employer stock
- No in-service withdrawals until age 62
- Subject to QJSA
Income over $276,000 not included ($69,000 MAX is 25% of $276,000)
Features of Target Benefit Purchase Plan (Defined Contribution - DC Plan)
- Requires mandatory annual employer contributions
- 100% employer funded
- Actuary determines contributions to reach target benefit
- Can skew higher contributions to older participants
- Actuary only used initial year - contributions not adjusted each year thereafter
- Final benefit not guarenteed, it is a target
- No more than 10% employer stock
Features in all Defined Benefit (DB) Plans
- Plans GUARENTEE Final Benefit
- Max annual pension $275,000
- Max compensation in benefit formula $345,000
- Insured by PBCG
- Vesting at least 5-year cliff, or 3-7 year graded
- Cash Balace Plan must use 3-year cliff vesting
- Joint & Survivor payout unless waived
- No participant-directed accounts - employer bears all risk
- No predetermined max deductible ER contribution
- Annual actuarial work required
- Must also satisfy 50/40 rule
Features of Traditional Defined Benefit Pension Plan (Defined Benefit - DB Plan)
- Guarentees monthly pension
- Older, high-earning participants can have substantial funding on their behalf
- Common formula is a % of pay times # of years of service
- No individual accounts
- Accruing a benefit of any account is “active participation” for IRA deduction purposes
- If participant is married the pension must be joint and survivor unless spouse waives (notarized)
Features of Cash Balance Plan (Defined Benefit - DB Plan)
- “Hypothetical” participant accounts for record keeping
- Not partipant-directed
- Guarenteed cash balance at plan’s normal retirement age
- Each year EE accrues plan contribution based on “pay credit” (% of comp) plus “interest rate credit”
- Provides uniform benefit accrual for all EE’s
- EE can convert guarenteed cash balance into lifetime pension (annuity)
- Considered easier for EE’s to understand than a Traditional Defined Benefit Pension Plan
Highly Compensated Employee (HCE) Status
- Owns more than 5% of the company that sponsors the plan at any time during the current or previous plan year
- Earns more than a set dollar amount ($155,000 for 2024) from the company in the previous year
Credit Score Factors
- Payment history (35%)
- Amounts owed (30%)
- Length of credit history (15%)
- New credit (10%)
- Credit mix (10%)
Credit Score Ratings
Over 800 = Exceptional
740 - 799 = Very Good
670 - 739 = Good
580 - 669 = Fair
Under 580 = Poor
The __________ makes the election to ‘qualify’ terminable interest property in a Q-TIP Trust.
The executor elects Q-TIP treatment on Form 706 and ‘qualifies’ the decedent’s estate for the marital deduction.
Audrey has made a gift of property to a charity this year. In exchange for her donation, she will be receiving an annual pro-rata share of income from the charity’s commingled funds for life.
Identify the charitable strategy that Audrey implemented.
Donor-Advised Fund
Private Foundation
Charitable Gift Annuity
Pooled Income Fund
With a Pooled Income Fund, the donor gifts property to a charity and receives an annual pro-rata share of income from the charity’s commingled funds, for life.
Additional gifts can be made to the fund to increase the donor’s income stream. The charity manages the fund which cannot invest in tax-exempt securities and receives the remainder when the donor’s income interest ends.
Income Stream = Pool
Identifying a Skip Person
Non-related persons
Non-related persons: A skip person was born between 37 ½ and 62 ½ years after the transferror.
Trust with a sprinkle or spray provision
A trust with a sprinkle or spray provision permits the trustee to make discretionary distributions from the trust to the beneficiaries.
This sprinkle/spray provision makes gifts into the trust ineligible for the annual gift-tax exclusion.
Gift Tax Adjustment Appreciation Factor Formula
(3-Steps)
Step 1: [(FMV – Basis) ÷ (FMV – Annual Exclusion)] = Appreciation Factor
Step 2: Multiply the ‘Appreciation Factor’ by the Gift Taxes Paid = Gift Tax Adjustment
Step 3: Add Gift Tax Adjustment to orignal basis to find Adjusted Basis
How much can a parent use from a 529 plan each year for K through 12 (private elementary & private high schools)?
529 account funds can be used for up to $10,000 of annual tuition costs associated with K-12 education.
The remainder of expenses must be covered from other funding sources (i.e., CESAs, savings accounts, scholarships, grants, loans).
When an investor takes on significantly more risk following losses, they are exhibiting what bias?
When an investor takes on significantly more risk following losses, they are exhibiting break-evenitis.
Chapter 7 Bankrupcty type?
And how much debt is discharged?
Chapter 7 Bankruptcy
- A liquidation type of procedure.
- Most debts are discharged after 115 days from the date of filing for Chatper 7.
But certain obligations must still be paid back:
* Child Support
* Alimony
* Income Taxes less than 3 years past due
* Student Loans
* Secured Debt
Stays on Credit Report 10 Years
LUCKY 7 - They forgive it all!
Chapter 13 Bankrupcty type?
And how much debt is discharged?
Chapter 13 Bankruptcy
- A wage-earner repayment type of plan.
- Allows debtors to keep their personal assets, but they are obligated to repay debt in full over a period.
- To be elegible, individual must have no more than $466,275 in unsecured debt (CC Bills & Personal Loans).
- And no more than $1,395,875 in secured debt (Mortgages & Car Loans).
Stays on Credit Report 7 Years
Servideos - 13 - Foreclosure - Have to Repay
Chapter 11 Bankrupcty type?
And how much debt is discharged?
Chapter 11 Bankruptcy
- Intended for businesses but also accomodates those who exceed Chatper 13 debt limitation or lack regular income.
- Reorganization
Stays on Credit Report 10 Years
Consumer Credit Protection Act
Right to know Costs & Terms of Credit
Equal Credit Opportunity Act
Right to Fair Opportunity to Obtain Credit
Fair Credit Reporting Act
Right to know what’s in your Credit File
Fair Credit Billing Act
Right to have Billing Mistake Resolved
Fair Debt Collection Practices Act
Righ to be Protected from Collection Agencies
What is the Tax & Penalty for HSA withdrawals not used for qualified expenses when taken before age 65?
If you withdraw money from a Health Savings Account (HSA) before age 65 (not 59.5), and the funds are not used for qualified medical expenses, you’ll face:
- A 20% penalty on the amount withdrawn.
- Ordinary income tax on the withdrawn amount.
However, after age 65, you can withdraw funds for any reason without the 20% penalty, but non-medical withdrawals are still subject to income tax.
What are the two phases of an annuity?
- The Accumulation Phase
- The Distribution Phase
Risk/Return Investments from most risky to least risky?
- Options & Futures
- Common Stock
- Preferred Stock
- Corporate Bonds
- Government Bonds
- CDs (cash alternatives)
- Treasury Bills (cash alternatives)
Beta is the measure of (BLANK) or (BLANK) risks?
Beta is the measure of systematic or non-diversifiable risks.
Current Yield of a Bond formula?
Current Yield = Annual Coupon ÷ Market Price
Instead of the actual costs of operating an automobile while performing the donated services, the law permits a deduction of (BLANK) per mile?
Instead of the actual costs of operating an automobile while performing the donated services, the law permits a deduction of $0.14 cents per mile.
And the cost of tolls and you can elect to use actual gas expenses as opposed to the standard $0.14 per mile.
Failure to File applies for a max of how many months?
- Failure to File [applies for a max of five months] = (0.05% x 5 months) x $10,000 = $2,500
- If both the Failure to Pay Penalty and Failure to File Penalty are applied in the same month, the Failure to File Penalty is reduced by the amount of the Failure to Pay Penalty for that month, for a combined penalty of 5% for each month or part of a month that the return was late.
- Failure to Pay applies beyond 5 months [only applies for the 1 ½ months, prorated to 2 months] = (0.005 x 1 ½ months) x $10,000 = $100
If a taxpayer does not identify the specific block at the time of sale, shares sold are treated as (BLANK) when reporting cost basis?
If a taxpayer does not identify the specific block at the time of sale, shares sold are treated as coming from the earliest block purchased (i.e., FIFO).
What are the 7 items considered investment income for purposes of the Net Investment Income Tax?
- Interest
- Dividends
- Capital Gains
- Rental and Royalty Income
- Non-Qualified Annuities
- Income from business of day trading stocks or commodities
- Income from businesses that are passive activities
A terminally ill individual is someone who has been certified by a physician as having an illness or physical condition that can reasonably be expected to result in death in _________ or less after the date of certification?
A terminally ill individual is someone who has been certified by a physician as having an illness or physical condition that can reasonably be expected to result in death in 24 months or less after the date of certification.
Bob, and Kevin each have a full retirement age of 67. Each of their PIA is $3,000. If Bob claims Social Security retirement benefits at age 72 and Kevin claims benefits at age 62, what is their combined monthly benefit?
- Bob is claiming benefits 5 years after FRA. Benefits are increased 8% for each year delayed to age 70.
- Bob’s benefit is increased by 24% (3 x 8%). His benefit is $3,720 ($3000 x 1.24).
- Kevin is claiming benefits 5 years early and his benefits will be reduced by the maximum amount of 30%. His benefit is $2,100 ($3000 x 0.70).
- Their combined monthly benefits are $5,820.
If Stuart’s FRA is 67 and he claims Social Security retirement benefits at age 65, what percentage of his primary insurance amount (PIA) will he receive each month?
- If he claims retirement benefits age 65, he is claiming benefits 24 months prior to FRA and his monthly benefit will be reduced by 13%. 5/9% x 24 months = 13%.
- He will receive 87% of his PIA.
- 1 - 0.13 = 0.87
- In 2024, a person must have less than (BLANK) a month in unearned income to receive SSI (A couple can get SSI if they have unearned income of less than (BLANK) a month in 2024)?
- A person with a Special Needs Trust who gets SSI can earn up to (BLANK) a month in 2024 ((BLANK) for a couple) and still get SSI?
- In 2024, a person must have less than $943 a month in unearned income to receive SSI (A couple can get SSI if they have unearned income of less than $1,415 a month in 2024).
- A person with a Special Needs Trust who gets SSI can earn up to $1,971 a month in 2024 ($2,915 for a couple) and still get SSI.
A marital deduction is not available for Terminable Interest Property (TIP) unless there is one of two exceptions:
- General Power of Appointment, or
- Qualifying the Terminable Interest Property (Q-TIP election).
What is the penalty % for not distributing enough RMDs?
25% penalty tax on undistributed amount
- Know that if the first RMD is deferred until April 1 of the year following the attainment of age 73
- The owner must make the second RMD by the end of that year, as well.
In an A-B trust arrangement, the surviving spouse has the right to all income and corpus from the (BLANK) and income if needed from the (BLANK).
Only the property from the (BLANK) is included in the surviving spouse’s estate.
In an A-B trust arrangement, the surviving spouse has the right to all income and corpus from the A-trust and income if needed from the B-trust.
Only the property from the A-trust is included in the surviving spouse’s estate.
- The maximum capital loss per year for Single, Head of Household, and MFJ. is limited to (BLANK)?
- The maximum capital loss per year for Married Filing Separately is limited to (BLANK)?
- If a net capital loss is more than these limits, you can carry the loss forward, (BLANK)?
- The maximum capital loss per year for Single, Head of Household, and MFJ. is limited to $3,000.
- The maximum capital loss per year for Married Filing Separately is limited to $1,500.
- If a net capital loss is more than these limits, you can carry the loss forward, indefinitely, to later years.
Refundable Tax Credits
- Earned Income Credit
- Additional Child Tax Credit
- American Opportunity Credit
- Premium Tax Credit
EAAP! 3 Vowels and a Premium
“Can I buy a vowel with my refund?”
Nonrefundable Tax Credit
- Child and Dependent Care Credit
- Child Tax Credit
- Retirement Savings Contribution Credit
- Lifetime Learning Credit
No Vowels and No Premium Refund
Investment Grade Bond Ratings
How many letters?
3-Letters!
Moody’s: Aaa, Aa1, Aa2, Aa3, A1, A2, A3, Baa1, Baa2, Baa3
S&P/Fitch: AAA, AA+, AA, AA-, A+, A, A-, BBB+, BBB, BBB-
Speculative Grade (Junk) Bond Ratings
How many letters?
2-Letters!
Moody’s: Ba1, Ba2, Ba3, B1, B2, B3, Caa, Ca, C
S&P/Fitch: BB+, BB, BB-, B+, B, B-, CCC, CC, C, D (Default)
Private annuity payments are (BLANK) promises to pay a (BLANK) to the seller (BLANK) and are received by the seller as a (BLANK) return of adjusted basis, capital gains, and interest taxed as ordinary income.
Private annuity payments are unsecured promises to pay a monthly fixed payment to the seller for life and are received by the seller as a tax-free return of adjusted basis, capital gains, and interest taxed as ordinary income.
Non-MEC Cash Value Life Insurance Policy
- Taxation at Death Benefit?
- Order of Cash Value Distributions?
- Character of Taxable Distributions?
- Penalty for Taxable Distributions?
Non-MEC Cash Value Life Insurance Policy
- Taxation at Death Benefit = Transfers Tax-Free
- Order of Cash Value Distributions = FIFO (Basis First)
- Character of Taxable Distributions = Ordinary Income
- Penalty for Taxable Distributions = No Penalties
MEC Cash Value Life Insurance Policy
- Taxation at Death Benefit?
- Order of Cash Value Distributions?
- Character of Taxable Distributions?
- Penalty for Taxable Distributions?
MEC Cash Value Life Insurance Policy
- Taxation at Death Benefit = Transfers Tax-Free
- Order of Cash Value Distributions = LIFO (Gains First)
- Character of Taxable Distributions = Ordinary Income
- Penalty for Taxable Distributions = 10% if Prior to Age 59 1/2
Social Security Benefits
Early Retirement (Before FRA) Calculation?
- Ages 64, 65, 66 = 5/9 decrease per Month
Full 3 years = 20% Reduction - Ages 62, 63 = 5/12 decrease per Month)
Full 2 Years = 10% Reduction -
If taken at 62 = 30% Reduction from FRA
*(FRA x 0.70)
Social Security Benefits
Delayed Retirement (After FRA) Calculation?
- Ages 68, 69, 70 = 2/3 increase per Month
-
8% Increase Per Year
Full 3 years = 24% Increase -
If taken at 70 = 24% Increase from FRA
*(FRA x 1.24)
AVD Election excludes depreciating assets and those assets must be valued at their FMV on the date of death.
What are those 5 assets?
- Cars
- Patents (Intellectual Property)
- Copyrighted music/art
- Life Estates
- Remainder Interests
TIP Gift Tax Consequences:
Can the donor spouse take a marital deduction?
Can the donor spouse take a marital deduction? No
Just the tip = Not Married = No Deduction
Q-TIP trusts are established when the decedent spouse wants to give the trust corpus to children from a previous marriage
Medicare Part A provides skilled nursing care in a facility for up to (BLANK) per benefit period.
Does Medicare Part have an annual deductible?
Medicare Part A provides skilled nursing care in a facility for up to 100 days per benefit period.
Medicare Part A does not have an annual deductible, but, rather, a deductible applies for each “benefit period.” Essentially, this deductible applies per hospital admission with a few exceptions.
At the commencement of an investigation, a Respondent must deliver to CFP Board Counsel a document acknowledging receipt of the Notice of Investigation within ____________from delivery to Respondent of the Notice of Investigation.
At the commencement of an investigation, a Respondent must deliver to CFP Board Counsel a document acknowledging receipt of the Notice of Investigation within 14 Days from delivery to Respondent of the Notice of Investigation.
Respondent must deliver to CFP Board Counsel a document acknowledging receipt of the Notice of Investigation within 14 calendar days from delivery to Respondent of the Notice of Investigation.
A (BLANK) is used when an individual is terminally ill, permanently unconscious, or incapacitated, that describes desired medical treatment concerning end-of-life care or life-savings measures.
A living will is used when an individual is terminally ill, permanently unconscious, or incapacitated, that describes desired medical treatment concerning end-of-life care or life-savings measures.
Filing Status Following Death of a Spouse
Tax Year Filing Status
* Year of Death = ?
* 1st Year After Death = ?
* 2nd Year After Death = ?
* 3rd Year and Beyond = ?
Filing Status Following Death of a Spouse
Tax Year Filing Status
* Year of Death = MFJ or MFS
* 1st Year After Death = Qualifying Widow(er) with Dependent Child
* 2nd Year After Death = Qualifying Widow(er) with Dependent Child
* 3rd Year and Beyond = Head of Household (HoH) or Single
What is the term used for the Social Security retirement benefit received at full retirement age (FRA)?
Primary Insurance Amount (PIA) is the monthly retirement benefit at Full Retirement Age (FRA).
The federal estate tax is calculated in five steps:
What are they?
The federal estate tax is calculated in five steps:
- Determining the value of the gross estate.
- Arriving at the adjusted gross estate.
- Determining the taxable estate.
- Calculating the federal estate tax payable before credits.
- Applying the allowable credits to arrive at the net federal estate tax.
Under a cross-purchase buy-sell agreement, the following formula must be used to determine the face amount of each policy: ?
The valuation of the company is $9,000,000 and there are 3 owners, determine the face amount of each policy needed: ?
Under a cross-purchase buy-sell agreement, the following formula must be used to determine the face amount of each policy:
n x (n - 1)
Since there are 3 business owners (Anne, Gloria, Hank): 3 x (3 - 1) = 6 policies
The valuation of the company is $9,000,000. Divide this valuation evenly into 6 policies to determine the face amount of each:
$9,000,000 ÷ 6 = $1,500,000 each
- Section 1245 property is (BLANK) used in a trade or business for the production of income.
- Examples of Section 1245 property include (BLANK), computers, carpet, and decorative light (BLANK).
- A barn used for inventory storage in a business would be categorized as (BLANK) property.
- Section 1245 property is ‘personalty’ used in a trade or business for the production of income.
- Examples of Section 1245 property include furniture, computers, carpet, and decorative light fixtures.
- A barn used for inventory storage in a business would be categorized as Section 1250 property.
1245 = Think 45’s = Think Personality
A (BLANK) will is a will made in agreement with another person to dispose of certain property interests.
A mutual will is a will made in agreement with another person to dispose of certain property interests.
Federal estate tax is usually payable by the (BLANK) on the date the return is due, which is within (BLANK) of the decedent’s death.
Federal estate tax is usually payable by the decedent’s executor on the date the return is due, which is within nine months of the decedent’s death.
Which type of life insurance is most likely to be a participating policy?
Whole life insurance is most likely to be a participating policy, meaning the policy pays dividends.
With an entity purchase plan, the number of policies needed is (BLANK) to the number of partners and/or shareholders.
- When setting up a buy-sell agreement with a larger number of partners, entity purchase plan is the more efficient method.
With an entity purchase plan, the number of policies needed is equal to the number of partners and/or shareholders.
- 5 owners = 5 policies
- When setting up a buy-sell agreement with a larger number of partners, entity purchase plan is the more efficient method.
Self Employed Social Security Tax and Medicare Rates for Owner and Employees?
- Owner = Compensation x .9235
Wage Base = $168,600 x 0.153 (Social Security & Medicare)
Wages Over >$168,600 x 0.029 (Medicare Only)
*Employees = Compensation x 0.0765 (ER Portion of SS & Medicare)
The 5-Year clock on Roth IRA Contributions starts in when?
- Beginning with the first taxable year for which the individual made a Roth IRA Contribution.
- Example: Jon made a 2023 contribution in January 2024, the clock starts January 1, 2023.
- The IRS considers a contribution made in January 2024 for the 2023 tax year as if it were made in 2023. This means Jon’s 5-year period for qualified withdrawals (e.g., tax-free earnings withdrawals) starts on January 1, 2023, and will end on December 31, 2027.
A standard HO-5 policy typically provides coverage for contents at a limit of (BLANK) of the Part A – Dwelling coverage limit.
A standard HO-5 policy typically provides coverage for contents at a limit of 50% of the Part A – Dwelling coverage limit.
Member of the Reserves are able to deduct expenses (travel, meals, lodging) if (BLANK) & (BLANK) miles from home.
When both criteria are met, the Reservist will use the (BLANK).
Member of the Reserves are able to deduct expenses (travel, meals, lodging) if performing services & 100+ miles from home.
When both criteria are met, the Reservist will use the federal per diem rate.
Jeremiah purchased custom cabinetry valued at $10,000 for his art auction house showroom. The salvage value of the cabinets is estimated to be $1,500.
Calculate the allowable depreciation for Jeremiah in the first year of service using the straight-line method.
The annual depreciation would be $1,214 [($10,000 - $1,500) ÷ 7] using the straight-line method. The 7-year useful life is applied for office furniture.
Since this is the first year of service, Jeremiah must apply the half-year convention. As a result, only 50% of the annual depreciation is available:
$1,214 ÷ 2 = $607
- Only (BLANK) may hold the property as tenants by the entirety.
- Property held in tenancy by the entirety can only be severed with (BLANK).
- Only spouses may hold the property as tenants by the entirety.
- Property held in tenancy by the entirety can only be severed with the consent of both spouses or by divorce.
Who receives legal title to the property placed in the trust?
A trustee is a party to whom property is transferred by the grantor and receives legal title to the property placed in the trust. The trustee:
- Manages, distributes, and accumulates income + principal
- Must follow a formal written agreement (i.e., terms of the trust) for the benefit of the beneficiaries.
- Serves as a fiduciary.
According to the Fitness Standards, a prior felony conviction for embezzlement is considered conduct (BLANK). The individual would be permanently barred from receiving CFP® Certification.
According to the Fitness Standards, a prior felony conviction for embezzlement is considered conduct deemed unacceptable. The individual would be permanently barred from receiving CFP® Certification.
How much is each credit worth and what is the calculation?
- AOTC
- LLC
AOTC = $2,500
* 100% of the first $2,000 + 25% of the next $2000
* $2,500 available per student per year
* Qualified Expenses for AOTC:
Tuition and Fees, Course-Related Books, Supplies, and Equipment – Expenses required for a course, whether purchased from the school or elsewhere, Student Activity Fees – Only if they are required for enrollment.
Expenses That Do Not Qualify:
Room and board (housing and meals), Insurance, Medical expenses (including student health fees), Transportation, Non-required fees or equipment (e.g., optional software, sports/gym memberships).
LLC = $2,000
* 20% × QualifiedEducationExpenses ($10K minimum to get max) ($5,000 x 20% = $1,000)
* Qualified expenses include tuition and fees paid to an eligible institution, but not room, board, or personal expenses.
* Only one per year per family
In a community property state, a surviving spouse will receive a (BLANK) step-up to the (BLANK) FMV of the property. In this case, the wife’s new basis would be $160,000.
In a community property state, a surviving spouse will receive a **100% **step-up to the full FMV of the property. In this case, the wife’s new basis would be $160,000.
Per the CFP Board Procedural Rules, the DEC may issue a suspension for a specified period, not less than (BLANK) or greater than (BLANK) years.
Per the CFP Board Procedural Rules, the DEC may issue a suspension for a specified period, not less than 90 calendar days or greater than five years.
Under the provisions of the Equal Credit Opportunity Act, a potential borrower must receive a response from a creditor within (BLANK) after an application indicating whether the request has been approved or denied.
Under the provisions of the Equal Credit Opportunity Act, a potential borrower must receive a response from a creditor within 30 days after an application indicating whether the request has been approved or denied.
An investor purchases a stock for $50. Shortly after the purchase, the stock tumbles to $25, however, the investor still thinks that the stock is worth $50 and the market is wrong. What bias may this investor be demonstrating?
ANCHORING
When someone uses their purchase price as the value regardless of current information, they are anchoring.
EFC %’s for Students
EFC %’s for STUDENTS
- Income = 50%
- Assets = 20%
EFC %’s for Parents
EFC %’s for PARENTS
- Income = 22% - 47%
- Assets = 5.64%
EFC %’s for Grandparents, Aunts, or Uncles?
0%
To qualify for a 529 ABLE plan there must be what 3/4 requirements?
To qualify for a 529 ABLE plan there must b:
- A diagnosis of a significant disability prior to age 26
- With a condition expected to last at least 12 consecutive months.
- In addition, the disabled individual must be in receipt of benefits under SSI and/or SSDI or able to obtain a disability certification from a doctor.
Withdrawals from parent-owned or dependent student-owned (BLANK) and parent-owned or third-party owned (BLANK) are not added back as income on the student’s financial aid application.
Withdrawals from parent-owned or dependent student-owned 529 plans and parent-owned or third-party owned Coverdell ESAs are not added back as income on the student’s financial aid application.
Distributions from student-owned (BLANK) account are counted as income.
(BLANK) distributions are considered income on the FAFSA, as well.
Distributions from student-owned Coverdell ESA account are counted as income.
Roth IRA distributions are considered income on the FAFSA, as well.
Coverdell ESA’s cover what items?
Coverdell ESAs cover:
* such as K-12 tuition
* fees
* supplies
* equipment
* tutoring (special needs)
* room & board and transportation
COVERDELL GOOD FOR PRE-COLLEGE
529 Plans cover what items?
529 Plans cover:
* $10,000 for K-12 tuition & expenses
* College Tuition
* fees, books, computers
* equipment & supplies
* tutoring (special needs)
* room & board and transportation
* Up to $10,000 annually in student loan payments
Each of the following have a **45 calendar day **deadline EXCEPT:
- Documents
- Witnesses
- Written Statements
- Stipulations
WITNESSES
- No later than 30 calendar days after delivery of the Complaint or the filing of a Petition, or by a time the DEC Chair otherwise specifies, each party must file a notice identifying all witnesses.
- Witness List due no later than 60 days before the projected review date.
According to the CFP Board Code of Ethics & Standards of Conduct document, any/all adverse conduct and bankruptcies need to be reported within (BLANK) to the Client.
According to the CFP Board Code of Ethics & Standards of Conduct document, any/all adverse conduct and bankruptcies need to be reported within 90 days to the Client.
Which of the following sanctions is a written reproach of Respondent that CFP Board publishes in accordance with Article 17.7 (General Provisions, Publication) of the Procedural Rules?
- Private Censure
- Public Censure
- Suspension
- Temporary Bar
A public censure is a written reproach of Respondent that CFP Board publishes in accordance with Article 17.7 (General Provisions, Publication).
A Respondent must deliver a written Answer to an Amended Complaint no later than the later of (BLANK) days of delivery of the Amended Complaint or the date an Answer to the original Complaint was due.
A Respondent must deliver a written Answer to an Amended Complaint no later than the later of 14 calendar days of delivery of the Amended Complaint or the date an Answer to the original Complaint was due.
Taxable Distributions of an Annuity are all ordinary income.
Annuities with after-tax basis receive an exclusion allowance for annuitization, what is the formula to find the taxable amount of the distribution?
Basis / Expected Payout = Tax-Free Portion of Annuitization Payment
- Exclusion allowance ends when all basis has been recovered.
- Withdrawals have LIFO tax treatment (earnings first).
- Distributions subject to early withdrawal 10% penalty prior to age 59 1/2 UNLESS they ANNUITIZE THE CONTRACT!.
3 Types of Annuities
What are they and what are the terms?
- Immediate = Annuitant begins to receive income distributions between 1 month and 1 year from the date of purchase.
- Deferred = Annuitant begins to receive income distributions after 1 year from the date of purchase.
- Deferred Income Annuity = Annuitant begins to receive income distributions after 1 year from the date of purchase, but can select a start date, often several years or decades after purchasing the annuity. Most insurers require payments to begin between 55 and 85 at the latest. AKA = Longevity Annuity intended to reduce longevity risk.
In a calculation to determine if a homeowners insurance coinsurance requirement is satisfied in a claim, what value is used in the numerator of the equation?
100% of the existing dwelling coverage amount is used in the numerator of the equation.
Term Life:
The most affordable life insurance for younger individuals. Covers a set time period and promises to pay benefits only if the insured dies during the policy term.
Whole Life:
Characterized by long-term coverage, cash values, and high level premiums. As the name implies, provides coverage for the whole of the insured’s life.
Universal Life:
Pairs lower costs of term and the cash value features of whole life. Ability to adjust face amount and premium payments (with additional underwriting) offers flexibility to the insured.
Variable Life:
Increased the opportunity for cash value fund to grow, but with greater investment risk to the insured.
If the insured forgets to pay the premium or decides to end the contract, the grace period provides (BLANK) days to pay the premium without forfeiting any contractual rights and no questions asked.
If the insured forgets to pay the premium or decides to end the contract, the grace period provides 31 days to pay the premium without forfeiting any contractual rights and no questions asked.
Which life insurance policy non-forfeiture (termination) option that provides the largest death benefit?
The extended-term non-forfeiture option provides the largest death benefit because the original face amount of the policy is continued for a period determined by how long the policy cash value will pay for the coverage. A reduced paid-up non-forfeiture option provides a death benefit that is less than the original face amount of the policy.
Which of the following is not a standard life insurance non-forfeiture (termination) option?
Extended term
Annuitization
Reduced paid-up
Cash surrender
ANNUITIZATION
While some insurance companies may offer annuitization it is not one of the three standard non-forfeiture options.
COBRA generally requires that group health plans sponsored by employers with (BLANK) or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end.
COBRA generally requires that group health plans sponsored by employers with 20 or more employees in the prior year offer employees and their families the opportunity for a temporary extension of health coverage (called continuation coverage) in certain instances where coverage under the plan would otherwise end.
An annuity, five years certain guarantees that the annuity will be paid out for five years. If the annuitant dies before the five-year period, (BLANK) will continue to receive the remaining payments.
An annuity, five years certain guarantees that the annuity will be paid out for five years. If the annuitant dies before the five-year period, their successor beneficiary will continue to receive the remaining payments.
An annuity purchased prior to August 14, 1982, uses BLANK based withdrawals. The $100,000 withdrawal is considered 100% return of basis and not subject to federal tax.
An annuity purchased prior to August 14, 1982, uses FIFO based withdrawals. The $100,000 withdrawal is considered 100% return of basis and not subject to federal tax.
Social Security disability: After a BLANK) month waiting period, Social Security will pay a disability benefit of $1,000 for one month this year. Because of Harold’s income (BLANK)% of the benefit, $850, is taxable at 22%. The tax is $187, resulting in an after-tax benefit of $813 this year.
Social Security disability: After a 5-month waiting period, Social Security will pay a disability benefit of $1,000 for one month this year. Because of Harold’s income 85% of the benefit, $850, is taxable at 22%. The tax is $187, resulting in an after-tax benefit of $813 this year.
Ophelia purchased a bond at par. Since purchase, market yields have decreased and Ophelia’s bond is priced at $1,086. Her bond has a 7.25% coupon and the YTM is 6.25%.
Calculate the current yield on Ophelia’s bond.
Current Yield = Annual Coupon Payment ÷ Market Price
The Current Yield on Ophelia’s bond is calculated as follows:
$72.50 ÷ $1,086 = 6.68%
Geometric mean return
Alternate TVM calculation?
Three years - returns during that time were 20%, -10%, and 5% respectively. What is geometric mean return?
N = 3
PV = -1
FV = (1 + 0.2)(1 - 0.1)(1 + 0.05) = (1.20)(0.90)(1.05) = 1.134
Solve for I/YR = 4.2808, or, 4.28%
Which of the following would be considered a long hedge?
Long the commodity, short the future.
Short the commodity, short the future.
Short the commodity, long the future.
Long the commodity, long the future.
Short the commodity, long the future.
Anyone who is short needs a long hedge, which is accomplished by buying a futures contract.
(BLANK) form belief asserts that fundamental analysis and access to inside information would provide an advantage to the investor.
Weak form belief asserts that fundamental analysis and access to inside information would provide an advantage to the investor.
(BLANK) form belief asserts that only access to inside information would provide an advantage to the investor.
Semi-Strong form belief asserts that only access to inside information would provide an advantage to the investor.
Which of the following option strategies bears unlimited risk?
Covered call writing
Covered put writing
Naked call writing
Naked put writing
By definition, naked call writing bears unlimited risk.
Mutual fund custodians prefer to report cost basis information using the (BLANK) method?
Mutual fund custodians prefer to report cost basis information using the average cost method.
If the home is transferred to a taxpayer as a result of a divorce, the time that the divorced spouse owned the home is (BLANK) the taxpayer’s period of ownership for Section 121 exclusion eligibility.
If the home is transferred to a taxpayer as a result of a divorce, the time that the divorced spouse owned the home is added to the taxpayer’s period of ownership when calculating qualifying eligibility for a Section 121 exclusion.
The Standard Deduction is considered an AMT Adjustment that is added back to Regular Taxable Income to arrive at Alternative Minimum Taxable Income (AMTI).
AMT Deferral Items may include:
- 1987 and subsequent-year depreciation based on ADS
- Amortization of circulation, research and experimental costs
- Amortization of mining exploration and development costs
- Amortization of pollution control costs for facilities placed in service after 1986
- Use of percentage completion for long-term contracts entered after February 28, 1986
- Installment-sale adjustments
- Gain or loss adjustments on the disposition of business property
- Incentive stock options
- Passive activity loss limitation
- AMT net operating loss
When there is tax negligence, a ___ penalty will apply to the amount of a tax deficiency.
20%
25%
5%
75%
Negligence: Deficiency of tax liability if there was no intent to defraud. A 20% penalty will apply to the amount of the deficiency.
When the aggregate value of all foreign financial accounts (FFA) exceeds $10,000 at any time during the calendar year reported, an FinCEN (FORM BLANK) must be submitted.
When the aggregate value of all foreign financial accounts (FFA) exceeds $10,000 at any time during the calendar year reported, an FinCEN (Form 114) must be submitted.
A performing artist is permitted to deduct business expenses in 2024 if:
A performing artist is permitted to deduct business expenses in 2024 if:
- Performing arts services for two or more employers
- $200+ received from each
- Expenses exceed 10% of gross income received
- AGI < $16,000
For the same premium, which of the following types of life insurance provides the least amount of face amount death benefit at the onset of the policy?
Whole life insurance
Universal life Option A
Universal Life Option B
10-year term life insurance
Because a whole life insurance policy’s premium is guaranteed for life, this type of policy initially provides the least amount of face amount death benefit at the policy onset.
Life insurance with cash value subaccount not subject to insurance companies creditors?
Variable Universal Life Insurance
In a community property state, a surviving spouse will receive a 100% step-up to the full FMV of the property.
In a community property state, a surviving spouse will receive a 100% step-up to the full FMV of the property.
When a person dies without a will, they are said to have died intestate.
In such cases, the distribution of their estate is handled according to the intestacy laws of their state or country, which typically prioritize spouses, children, and other close relatives. If no eligible relatives can be found, the estate may eventually go to the government.
When a person dies without a will, they are said to have died intestate.
In such cases, the distribution of their estate is handled according to the intestacy laws of their state or country, which typically prioritize spouses, children, and other close relatives. If no eligible relatives can be found, the estate may eventually go to the government.
Withdrawals from an annuity are typically reported on IRS Form 1099-R. This form is used to report distributions from pensions, annuities, retirement plans, IRAs, and other similar accounts.
Withdrawals from an annuity are typically reported on IRS Form 1099-R. This form is used to report distributions from pensions, annuities, retirement plans, IRAs, and other similar accounts.
A Profit-Sharing Plan is the only qualified plan that may invest 100% in employer stock.
Since a 401K Plan is technically a Profit-Sharing Plan, the Employer (ER) can make their contribution 100% in employer stock.
A Profit-Sharing Plan is the only qualified plan that may invest 100% in employer stock.
Since a 401K Plan is technically a Profit-Sharing Plan, the Employer (ER) can make their contribution 100% in employer stock.
A Money Purchase Pension Plan and a Target Benefit Pension Plan can only invest 10% of plan contributions in employer stock.
A Money Purchase Pension Plan and a Target Benefit Pension Plan can only invest 10% in employer stock.
0% of employer stock is invested in Defined Benefit Pension (DB) Plans (Traditional DB Plan and Cash Balance Pension Plans)
0% of employer stock is invested in Defined Benefit Pension (DB) Plans (Traditional DB Plan and Cash Balance Pension Plans)
A Coverdell Education Savings Account (CESA) can be used to pay for NON-TUITION K-12 Expenses.
A 529 Plan can only be used to pay for K-12 TUITION ONLY.
A Coverdell Education Savings Account (CESA) can be used to pay for NON-TUITION K-12 Expenses.
A 529 Plan can only be used to pay for K-12 TUITION ONLY.
Self-Cancelling Installment Note (SCIN): Partially or fully cancels the installment note before the note matures (at death)
Self-Cancelling Installment Note (SCIN): Partially or fully cancels the installment note before the note matures (at death)
Private Annuity: A seller receives a fixed annuity income stream for life and removes the business/property from their gross estate.
Private Annuity: A seller receives a fixed annuity income stream for life and removes the business/property from their gross estate.
Installment Sale: Used to sell the business to a family member or a 3rd party and provide the seller with secured income.
Installment Sale: Used to sell the business to a family member or a 3rd party and provide the seller with secured income.
- The measure of risk in the Capital Market Line (CML) is the standard deviation of returns (total risk).
- The risk measure in the Security Market Line (SML) is** systematic risk or Beta**.
- The Capital Asset Pricing Model (CAPM) and the Treynor Ratio also include systematic risk, or Beta.
- The measure of risk in the Capital Market Line (CML) is the standard deviation of returns (total risk).
- The risk measure in the Security Market Line (SML) is** systematic risk or Beta**.
- The Capital Asset Pricing Model (CAPM) and the Treynor Ratio also include systematic risk, or Beta.
All felony charges and convictions must be reported by written notice to CFP Board within 30 calendar days.
EXCEPT first offence misdemeanor drug charges, it would need to be a second (or more) offence.
All felony charges and convictions must be reported by written notice to CFP Board within 30 calendar days.
EXCEPT first offence misdemeanor drug charges, it would need to be a second (or more) offence.
Withdrawals from a Section 457(b) plan prior to age 59½ are not subject to a 10% early withdrawal penalty tax.
Withdrawals from a Section 457(b) plan prior to age 59½ are not subject to a 10% early withdrawal penalty tax.
Material changes and updates to public disciplinary history or bankruptcy information must be disclosed to the Client within ninety (90) days, together with the location(s) of the relevant webpages.
Material changes and updates to public disciplinary history or bankruptcy information must be disclosed to the Client within ninety (90) days, together with the location(s) of the relevant webpages.
A contingent beneficiary has a distinct interest in the policy only if the primary beneficiary predeceases the insured.
A contingent beneficiary has a distinct interest in the policy only if the primary beneficiary predeceases the insured.
Part E of a homeowners insurance policy covers legal action brought against the homeowner related to an accident that a visitor experiences in the insured’s home.
Remember “Part E is for Exposure to Legal Action.”
Part E of a homeowners insurance policy covers legal action brought against the homeowner related to an accident that a visitor experiences in the insured’s home.
Remember “Part E is for Exposure to Legal Action.”
Losses are deductible for members of a partnership to the extent of their tax basis in the partnership.
Losses are deductible for members of a partnership to the extent of their tax basis in the partnership.
A Federal Supplemental Educational Opportunity Grant (FSEOG) is for undergraduates with exceptional financial need.
There is no guarantee every eligible student will be able to receive an FSEOG. Students at each school may be awarded an FSEOG based on the availability of funds at that school - Therefor it is not available at allschools.
A Federal Supplemental Educational Opportunity Grant (FSEOG) is for undergraduates with exceptional financial need.
There is no guarantee every eligible student will be able to receive an FSEOG. Students at each school may be awarded an FSEOG based on the availability of funds at that school - Therefor it is not available at allschools.
When the CFP® professional has responsibilities for monitoring and updating, the CFP® professional must communicate to the Client:
- The Client’s responsibility to inform the CFP® professional of any Material changes to the Client’s qualitative and quantitative information;
- The CFP® professional’s responsibility to update the Financial Planning recommendations
When the CFP® professional has responsibilities for monitoring and updating, the CFP® professional must communicate to the Client:
- The Client’s responsibility to inform the CFP® professional of any Material changes to the Client’s qualitative and quantitative information;
- The CFP® professional’s responsibility to update the Financial Planning recommendations
An interim suspension is a suspension of a CFP® professional’s Certification and Trademark License during the pendency of proceedings.
An Order of Interim Suspension is a temporary sanction and does not preclude CFP Board from imposing a final sanction.
An interim suspension is a suspension of a CFP® professional’s Certification and Trademark License during the pendency of proceedings.
An Order of Interim Suspension is a temporary sanction and does not preclude CFP Board from imposing a final sanction.
Legal fees and commissions on the purchase of property increase and are included in the cost basis.
Legal fees and commissions on the purchase of property increase and are included in the cost basis.
When net investment income is $1,000 or less on loans between $10,000 - $100,000, there is no imputed interest.
When net investment income is $1,000 or less on loans between $10,000 - $100,000, there is no imputed interest.
Commissions paid to buy a stock increase cost basis.
Commissions paid to buy a stock increase cost basis.
Dividends on participating life insurance policies may be:
- Taken in cash.
- Used to pay a portion of the next premium.
- Left to accumulate interest.
- Used to purchase single-premium, paid-up additions.
- Used to purchase **one-year term insurance **(fifth dividend option).
Dividends on participating life insurance policies may be:
- Taken in cash.
- Used to pay a portion of the next premium.
- Left to accumulate interest.
- Used to purchase single-premium, paid-up additions.
- Used to purchase **one-year term insurance **(fifth dividend option).
Lump sum withdrawals of an annuity purchased before August 14, 1982 are treated as FIFO based withdrawals. Lump sum withdrawals of annuties purchased after August 14, 1982 are treated as LIFO based.
Lump sum withdrawals of an annuity purchased before August 14, 1982 are treated as FIFO based withdrawals. Lump sum withdrawals of annuties purchased after August 14, 1982 are treated as LIFO based.
Social Security disability has a 5-month waiting period.
Social Security disability has a 5-month waiting period.
Social Security disability income is taxed based on the following:
Most term insurance policies include a convertible feature. This feature permits the policy owner to exchange the term policy for a cash-value insurance contract, without evidence of insurability.
Most term insurance policies include a convertible feature. This feature permits the policy owner to exchange the term policy for a cash-value insurance contract, without evidence of insurability such as Whole life insurance, Universal life insurance, or Variable life insurance. NOT another Term-Life policy.
Non-qualified HSA withdrawals prior to age 65 are subject to a 20% penalty tax.
Non-qualified HSA withdrawals prior to age 65 are subject to a 20% penalty tax.
A standard HO-5 policy typically provides coverage for contents at a limit of 50% of the Part A – Dwelling coverage limit.
A standard HO-5 policy typically provides coverage for contents at a limit of 50% of the Part A – Dwelling coverage limit.
Example: HO-5 coverage is $400,000, Part-A coverage is $200,000
The money market is a financial market. The primary and secondary markets are examples of capital markets.
The money market is a financial market. The primary and secondary markets are examples of capital markets.
Fiscal Policy is GOVERNMENT (FG)
Monetary Policy is FED (MF)
Fiscal Policy is GOVERNMENT (FG)
Monetary Policy is FED (MF)
When an ISO is bought and sold in the same year, and the transaction is categorized as a disqualifying disposition, the bargain element [(Exercise Price – Strike Price) x # of shares] will be taxed as ordinary income, subject to FICA tax.
When an ISO is bought and sold in the same year, and the transaction is categorized as a disqualifying disposition, the bargain element [(Exercise Price – Strike Price) x # of shares] will be taxed as ordinary income, subject to FICA tax.
Section 401(k) of the Internal Revenue Code allows a cash or deferred arrangement (CODA) to be added to a profit-sharing plan to allow participant elective deferrals into the plan.
Section 401(k) of the Internal Revenue Code allows a cash or deferred arrangement (CODA) to be added to a profit-sharing plan to allow participant elective deferrals into the plan.
Both parents and students are offered an Income Protection Allowance as they determine the EFC on the FAFSA form.
The Asset Protection Allowance is only available to parents. It allows parents to exclude certain portions of their assets from consideration when calculating the Expected Family Contribution (EFC).
Both parents and students are offered an Income Protection Allowance as they determine the EFC on the FAFSA form.
The Asset Protection Allowance is only available to parents. It allows parents to exclude certain portions of their assets from consideration when calculating the Expected Family Contribution (EFC).
The Fair Credit Billing Act is a law that provides individuals with the right to have corrections made to credit-related errors.
The Fair Credit Billing Act is a law that provides individuals with the right to have corrections made to credit-related errors.
According to the Code and Standards, the client is responsible for informing you of any material changes to their qualitative and quantitative information. You are responsible for communicating this responsibility to the client in Step 7 of the financial planning process.
According to the Code and Standards, the client is responsible for informing you of any material changes to their qualitative and quantitative information. You are responsible for communicating this responsibility to the client in Step 7 of the financial planning process.
The CFP Board Code of Ethics is comprised of six principles that must be upheld by CFP® professionals at all times.
According to the Code of Ethics and Standards of Conduct a CFP® professional must:
Act with honesty, integrity, competence, and diligence.
Act in the client’s best interests.
Exercise due care.
Avoid or disclose and manage conflicts of interest.
Maintain the confidentiality and protect the privacy of client information.
Act in a manner that reflects positively on the financial planning profession and CFP® certification
The CFP Board Code of Ethics is comprised of six principles that must be upheld by CFP® professionals at all times.
- Act with honesty, integrity, competence, and diligence.
- Act in the client’s best interests.
- Exercise due care.
- Avoid or disclose and manage conflicts of interest.
- Maintain the confidentiality and protect the privacy of client information.
- Act in a manner that reflects positively on the financial planning profession and CFP® certification
Three categories of adverse conduct are identified in the Fitness Standards:
Conduct that is unacceptable; Individual is permanently barred from becoming certified.
Conduct that is presumed to be unacceptable.
III. Other conduct that may reflect adversely upon the individual’s integrity or fitness, the profession, or the CFP® certification marks.
Three categories of adverse conduct are identified in the Fitness Standards:
I. Conduct that is unacceptable; Individual is permanently barred from becoming certified.
II. Conduct that is presumed to be unacceptable.
III. Other conduct that may reflect adversely upon the individual’s integrity or fitness, the profession, or the CFP® certification marks.
Conduct that is presumed to be unacceptable and Other conduct that may reflect adversely upon the individual’s integrity or fitness, the profession, or the CFP® certification marks bars an individual from becoming certified unless the individual petitions the Disciplinary and Ethics Commission (DEC) and the DEC grants the petition or permits the individual to reapply for certification later.
Conduct that is unacceptable; Individual is permanently barred from becoming certified.
Municipal Bond Interest Income is NOT INCLUDED in Net Investment Income for NII Tax
Municipal Bond Interest Income is NOT INCLUDED in Net Investment Income for NII Tax
The additional Medicare tax is applied at a rate of 0.9% for income above $200,000 (single), $250,000 (MFJ), and $125,000 (MFS) - All on P. 3 of Tax Table
The additional Medicare tax is applied at a rate of 0.9% for income above $200,000 (single), $250,000 (MFJ), and $125,000 (MFS) - All on P. 3 of Tax Table
Real estate activities are generally considered to be passive.
Taxpayers may deduct up to a $25,000 loss provided they “actively participate”.
The $25,000 loss is allowed if the taxpayer’s MAGI (AGI without the rental loss) is equal to or less than $100,000.
The $25,000 loss limit, as well as the phase-out ranges of $100,000 to $150,000, are the same regardless of your filing status (single, MFJ, or HOH).
Real estate activities are generally considered to be passive.
Taxpayers may deduct up to a $25,000 loss provided they “actively participate”.
The $25,000 loss is allowed if the taxpayer’s MAGI (AGI without the rental loss) is equal to or less than $100,000.
The $25,000 loss limit, as well as the phase-out ranges of $100,000 to $150,000, are the same regardless of your filing status (single, MFJ, or HOH).
Penalty amounts for early withdrawal of CDs and time deposit accounts are available for deduction in the year of penalty only, not penalties from prior years.
Penalty amounts for early withdrawal of CDs and time deposit accounts are available for deduction in the year of penalty only, not penalties from prior years.
Considered rental property if property use for persional for more than the greater of 14 days or 10% of the days rented.
Considered rental property if property use for persional for more than the greater of 14 days or 10% of the days rented.
If property is mixed use, to calculate deductible expenses for rental use: Add up personal and rentail days used, lets assume it was used a total of 120 days [95 (personal) + 25 (rental) = 120]. Divide rental days by total days used (25 / 120) = 20.83% of its use - multiple that times rental expenses.
If property is mixed use, to calculate deductible expenses for rental use: Add up personal and rentail days used, lets assume it was used a total of 120 days [95 (personal) + 25 (rental) = 120]. Divide rental days by total days used (25 / 120) = 20.83% of its use - multiple that times rental expenses.
A traditional rollover from the Section 401(k) account still held at a previous employer will require mandatory 20% withholding.
A traditional rollover from the Section 401(k) account still held at a previous employer will require mandatory 20% withholding and if not rolled over properly taxed at marginal rate along with an additional 10% tax penalty.
The market that trades in short-term debt instruments is known as the money market.
The market that trades in short-term debt instruments is known as the money market.
Under SEC Rule 415, companies have up to three years to issue shares from their IPO filing. This allows for better timing of the issue.
Under SEC Rule 415, companies have up to three years to issue shares from their IPO filing. This allows for better timing of the issue.
According to the CFP Fitness Standards, Arbitrations and/or civil proceedings are categorized as ‘Other Adverse Conduct.’
According to the CFP Fitness Standards, Arbitrations and/or civil proceedings are categorized as ‘Other Adverse Conduct.’
According to the CFP Fitness Standards, Revocation of a financial license for non-administrative reasons and felony convictions for a financial-based crime are considered ‘Unacceptable’ and will always bar a candidate or person eligible for reinstatement from certification.
According to the CFP Fitness Standards, Revocation of a financial license for non-administrative reasons and felony convictions for a financial-based crime are considered ‘Unacceptable’ and will always bar a candidate or person eligible for reinstatement from certification.
According to the CFP Fitness Standards, RA felony conviction for non-violent crimes (including perjury) within the last five years is a presumptive bar from certification unless the individual petitions the Disciplinary and Ethics Commission (DEC) and the DEC grants the petition or permits the individual to reapply for certification later.
According to the CFP Fitness Standards, RA felony conviction for non-violent crimes (including perjury) within the last five years is a presumptive bar from certification unless the individual petitions the Disciplinary and Ethics Commission (DEC) and the DEC grants the petition or permits the individual to reapply for certification later.
For 2024, a child’s standard deduction is the greater of $1,300 or their earned income plus $450 (not to exceed $14,600).
For 2024, a child’s standard deduction is the greater of $1,300 or their earned income plus $450 (not to exceed $14,600).
All proceeds of a viatical settlement are income tax-free for terminally ill individuals, irrespective of subsequent use.
All proceeds of a viatical settlement are income tax-free for terminally ill individuals, irrespective of subsequent use.
Only funds used for L/T care services from proceeds of a viatical settlement are income tax-free for chronically ill individuals.
Only funds used for L/T care services from proceeds of a viatical settlement are income tax-free for chronically ill individuals.
In a SIMPLE 401(k), the employer match cannot go below 3%.
In a SIMPLE 401(k), the employer match cannot go below 3%.
In a like-kind exchange the recognized gain is the lesser of:
realized gain, or
net boot received.
In a like-kind exchange the recognized gain is the lesser of:
realized gain, or
net boot received.
Withdrawals from a SIMPLE IRA in the first two years of participation are subject to a 25% early withdrawal penalty tax.
Withdrawals from a SIMPLE IRA in the first two years of participation are subject to a 25% early withdrawal penalty tax.
If someone is over age 55 and separating from service with their employer, distributions from a Section 401(k) are not subject to early withdrawal penalty.
If someone is over age 55 and separating from service with their employer, distributions from a Section 401(k) are not subject to early withdrawal penalty.
SIMPLE IRAs may be available to employees who have earned at least $5,000 in each of the past 2 years and are expected to earn $5,000 are eligible.
SIMPLE IRAs may be available to employees who have earned at least $5,000 in each of the past 2 years and are expected to earn $5,000 are eligible.
Failure to answer a complaint will result in CFP Board Counsel delivering an Administrative Order of Suspension or an Administrative Order of Revocation.
There is a mandatory timeframe of 1 year and 1 day that is a part of the Administrative Order of Suspension.
Failure to answer a complaint will result in CFP Board Counsel delivering an Administrative Order of Suspension or an Administrative Order of Revocation.
There is a mandatory timeframe of 1 year and 1 day that is a part of the Administrative Order of Suspension.
The Duty of Care, which requires a CFP® professional to act with the care, skill, prudence, and diligence that a prudent professional would exercise in light of the Client’s goals, risk tolerance, objectives, and financial and personal circumstances.
The Duty of Care, which requires a CFP® professional to act with the care, skill, prudence, and diligence that a prudent professional would exercise in light of the Client’s goals, risk tolerance, objectives, and financial and personal circumstances.
College savings plans, Coverdell savings accounts and 529 accounts held in the parent’s or dependent child’s name are reported as parental assets on the financial aid application (FASFA).
College savings plans, Coverdell savings accounts and 529 accounts held in the parent’s or dependent child’s name are reported as parental assets on the financial aid application (FASFA).
In the Code and Standards, an engagement is defined as “an oral or written agreement, arrangement, or understanding.”
In the Code and Standards, an engagement is defined as “an oral or written agreement, arrangement, or understanding.”
The federal estate tax is calculated in five steps:
Determining the value of the gross estate.
Arriving at the adjusted gross estate.
Determining the taxable estate.
Calculating the federal estate tax payable before credits.
Applying the allowable credits to arrive at the net federal estate tax.
The federal estate tax is calculated in five steps:
- Determining the value of the gross estate.
- Arriving at the adjusted gross estate.
- Determining the taxable estate.
- Calculating the federal estate tax payable before credits.
- Applying the allowable credits to arrive at the net federal estate tax.
SEP Eligibility Rules:
Age 21
Worked for sponsor three of five prior years
Minimum compensation $750 per year (2024)
May exclude union members and non-resident aliens
SEP Eligibility Rules:
Age 21
Worked for sponsor three of five prior years
Minimum compensation $750 per year (2024)
May exclude union members and non-resident aliens
A unique feature of a cash balance plan is that only a 3-year cliff vesting schedule may be used.
A unique feature of a cash balance plan is that only a 3-year cliff vesting schedule may be used.
GDP formula is Y = C + I + G + (X – M)
C is consumer spending
I is investment made by industry
G is government spending
X-M is excess of exports over imports
you may see this listed as ‘NE’ for Net Exports
The GDP formula would be listed as C + I + G + NE
GDP formula is Y = C + I + G + (X – M)
C is consumer spending
I is investment made by industry
G is government spending
X-M is excess of exports over imports
you may see this listed as ‘NE’ for Net Exports
The GDP formula would be listed as C + I + G + NE
GDP is important because it
Indicates the pace of growth or decline of the economy relative to history.
Determines which sectors are over or under-performing.
Can compare the size and growth rate of economies throughout the world.
GDP is important because it
Indicates the pace of growth or decline of the economy relative to history.
Determines which sectors are over or under-performing.
Can compare the size and growth rate of economies throughout the world.
Real GDP includes:
Market value of all final goods and services produced within an economy.
Income of foreigners working in the U.S.
Profits that foreign companies earn in the U.S.
Real GDP excludes:
Imports
Inflation
Transactions where money changes hands but no new goods or services are produced
Income of U.S. citizens working abroad
Profits earned by U.S. companies in foreign countries
Real GDP includes:
Market value of all final goods and services produced within an economy.
Income of foreigners working in the U.S.
Profits that foreign companies earn in the U.S.
Real GDP excludes:
Imports
Inflation
Transactions where money changes hands but no new goods or services are produced
Income of U.S. citizens working abroad
Profits earned by U.S. companies in foreign countries
A Standby Trust is used to manage a person’s assets if they become incapacitated.
There are 3 parties to the trust:
Grantor: creates a trust by transferring the legal title of the property to the Trustee
Trustee: manages the trust property for the beneficiary
Beneficiary: has equitable title to trust property
In a Standby Trust, the Grantor is the Trustee and Beneficiary. A Successor Trustee steps into the Trustee role when the Grantor is incapacitated.
A Standby Trust is used to manage a person’s assets if they become incapacitated.
There are 3 parties to the trust:
Grantor: creates a trust by transferring the legal title of the property to the Trustee
Trustee: manages the trust property for the beneficiary
Beneficiary: has equitable title to trust property
In a Standby Trust, the Grantor is the Trustee and Beneficiary. A Successor Trustee steps into the Trustee role when the Grantor is incapacitated.
A CFP® professional who has monitoring responsibilities must analyze, at appropriate intervals, the progress toward achieving the Client’s goals.
The CFP® professional must review with the Client the results of the CFP® professional’s analysis.
A CFP® professional who has monitoring responsibilities must analyze, at appropriate intervals, the progress toward achieving the Client’s goals.
The CFP® professional must review with the Client the results of the CFP® professional’s analysis.
When a CFP® professional is working as part of a team to provide Financial Advice to a Client, the Duty of Care requires the CFP® professional to communicate with the other members of the team about the scope of their respective services and the allocation of responsibility between them. This might be satisfied by a firm policy or protocol that identifies their respective responsibilities with respect to the services to be provided.
When a CFP® professional is working as part of a team to provide Financial Advice to a Client, the Duty of Care requires the CFP® professional to communicate with the other members of the team about the scope of their respective services and the allocation of responsibility between them. This might be satisfied by a firm policy or protocol that identifies their respective responsibilities with respect to the services to be provided.
A maximum $2,500 deduction is available on student loan interest in 2024, subject to phaseouts.
A maximum $2,500 deduction is available on student loan interest in 2024, subject to phaseouts.
For a contribution to a charity valued from $250 to $500, the only recordkeeping requirement is a donor letter.
For a contribution to a charity valued from $250 to $500, the only recordkeeping requirement is a donor letter.
A Section 125 Plan, also known as a Cafeteria Plan, is a pre-tax benefits plan that allows employees to choose from a variety of benefits while reducing their taxable income. These plans are governed by Section 125 of the Internal Revenue Code (IRC).
A Section 125 Plan, also known as a Cafeteria Plan, is a pre-tax benefits plan that allows employees to choose from a variety of benefits while reducing their taxable income. These plans are governed by Section 125 of the Internal Revenue Code (IRC).
If Classic Auto adopts a profit-sharing plan, Gordon would like to make the maximum contribution for himself and his son. If they integrate the retirement plan at the maximum Social Security wage base using an excess percentage of 25%, what is the base percentage?
Excess 25% minus maximum disparity 5.7% = 19.3%
100% of health insurance premiums for self-employed individuals are deductible.
100% of health insurance premiums for self-employed individuals are deductible.
When contributing to donor-advised funds, donors are entitled to a charitable income tax deduction based on the type of property contributed, subject to AGI limitations.
With charitable remainder trusts, pooled income funds, and charitable gift annuities, the available tax deduction is equal to the PV of the charity’s remainder interest.
When contributing to donor-advised funds, donors are entitled to a charitable income tax deduction based on the type of property contributed, subject to AGI limitations.
With charitable remainder trusts, pooled income funds, and charitable gift annuities, the available tax deduction is equal to the PV of the charity’s remainder interest.
With distributable net income (DNI), the beneficiary will be responsible for taxes on the lesser of the DNI allocation, or the amount required to be distributed according to the trust document.
The beneficiary is responsible for paying taxes on the lesser of these figures.
With distributable net income (DNI), the beneficiary will be responsible for taxes on the lesser of the DNI allocation, or the amount required to be distributed according to the trust document.
The beneficiary is responsible for paying taxes on the lesser of these figures.
To execute a will, you need testamentary capacity, or the will is invalid. This means that the will creator (i.e., testator) must know they are executing a will, must be aware of what assets they own, and must know and remember their relationship to their beneficiaries.
The value of assets and liabilities is not required for testamentary capacity.
To execute a will, you need testamentary capacity, or the will is invalid. This means that the will creator (i.e., testator) must know they are executing a will, must be aware of what assets they own, and must know and remember their relationship to their beneficiaries.
The value of assets and liabilities is not required for testamentary capacity.
Per the CFP Board Procedural Rules, the DEC may issue a suspension for a specified period, not less than 90 calendar days or greater than five years.
Per the CFP Board Procedural Rules, the DEC may issue a suspension for a specified period, not less than 90 calendar days or greater than five years.
The Consumer Credit Protection Act is a law that provides individuals with the right to know the costs and terms of their credit.
The Consumer Credit Protection Act is a law that provides individuals with the right to know the costs and terms of their credit.
The employer basis of NUA stock held in an employer retirement account is recognized as ordinary income to the participant in the year of the distribution.
The employer basis of NUA stock held in an employer retirement account is recognized as ordinary income to the participant in the year of the distribution.
A nondurable power of attorney can be used if a principal needs the agent to complete a specific task on their behalf (e.g., signing a form while the agent is on vacation).
A nondurable power of attorney can be used if a principal needs the agent to complete a specific task on their behalf (e.g., signing a form while the agent is on vacation).
In an A-B trust arrangement, the surviving spouse has the right to all income and corpus from the A-trust and income if needed from the B-trust. Only the property from the A-trust is included in the surviving spouse’s estate.
In an A-B trust arrangement, the surviving spouse has the right to all income and corpus from the A-trust and income if needed from the B-trust. Only the property from the A-trust is included in the surviving spouse’s estate.
The $3,000 capital loss per year can be claimed each year for Single, Head of Household, and MFJ.
The maximum capital loss per year for Married Filing Separately is limited to $1,500.
If a net capital loss is more than these limits, you can carry the loss forward, indefinitely, to later years.
The $3,000 capital loss per year can be claimed each year for Single, Head of Household, and MFJ.
The maximum capital loss per year for Married Filing Separately is limited to $1,500.
If a net capital loss is more than these limits, you can carry the loss forward, indefinitely, to later years.
A ‘Qualifying Disposition’ of ISOs occurs when the sale is at least two years from grant & one year from exercise.
A ‘Qualifying Disposition’ of ISOs occurs when the sale is at least two years from grant & one year from exercise.
TIP Gift Tax Consequences:
The donor spouse cannot take a marital deduction for gifting TIP to the donee spouse.
The donor spouse can take an annual exclusion for the present interest gift.
Is TIP a gift? Yes
Can the donor spouse gift-split? No
Can the donor spouse take an annual exclusion? Yes
Can the donor spouse take a marital deduction? No
TIP Gift Tax Consequences:
The donor spouse cannot take a marital deduction for gifting TIP to the donee spouse.
The donor spouse can take an annual exclusion for the present interest gift.
Is TIP a gift? Yes
Can the donor spouse gift-split? No
Can the donor spouse take an annual exclusion? Yes
Can the donor spouse take a marital deduction? No
Respondent must deliver to CFP Board Counsel a document acknowledging receipt of the Notice of Investigation within 14 calendar days from delivery to Respondent of the Notice of Investigation.
Respondent must deliver to CFP Board Counsel a document acknowledging receipt of the Notice of Investigation within 14 calendar days from delivery to Respondent of the Notice of Investigation.
There is an interest rate risk to the seller in a transfer using a SCIN. The installment note interest is fixed for the term of the SCIN.
There is an interest rate risk to the seller in a transfer using a SCIN because the installment note interest is fixed for the term of the SCIN.
Withdrawals from a SIMPLE IRA in the first two years of participation are subject to a 25% early withdrawal penalty tax.
Withdrawals from a SIMPLE IRA in the first two years of participation are subject to a 25% early withdrawal penalty tax.
SIMPLE IRAs may be available to employees who have earned at least $5,000 in each of the past 2 years and are expected to earn $5,000 are eligible.
SIMPLE IRAs may be available to employees who have earned at least $5,000 in each of the past 2 years and are expected to earn $5,000 are eligible.
