unit 18

Question 1

opening account for natural person

Answer 1

name, legal age, employment
(CIP) USA patriot act- anti terrorism, dob, physical address and ein. CIP needs date of birth and legal age

financial info and objectives

Question 2

tenants by entirety

Answer 2

limited to spouses
permission of spouse needs to make a gift or sale
generally used for real estate
check must be made in name of all owners

Question 3

sole propreetorship

Answer 3

unlim libability

simplist form to form or disolve

Question 4

partnership

Answer 4

income and losses flow through
partnership not taxable entity
pretty easy to form and disolve

all partners considerd for suitability

Question 5

LLC

Answer 5

taxed like partnership
has members
relativlty easy to form or disolve
suitabilty same as partnership
flow through income and loss

Question 6

s corp

Answer 6

limited liability taxed like partnership
max 100 shareholders
no non resident alien shareholdrs
flow through income and loss

Question 7

c corp

Answer 7

corp is taxable entity
shareholder risk limited to investment
double taxation
best for raising capital
suitability is for entity, not shareholder

Question 8

can grantor be trustee

Answer 8

yes

Question 9

simple vs complex trust

Answer 9

simple must distribute dni each year

simple trust cannot dsistribute principal
complex can

Question 10

what is DNI

Answer 10

dividends, interest, etf besides reinvestment capital gains

Question 11

testementary trust

Answer 11

grantor retains control until death.
trust irrevocable
does not reduce income or tax liability

Question 12

durable poa

Answer 12

allows for making desicions for those unable to make decisions

expires when person dies

Question 13

living will

Answer 13

end of life medical care requests

Question 14

TOD and probate and taxes

Answer 14

avoids probate but not estate taxes

Question 15

Totten trust

Answer 15

allowed for the transfer of ownership of a bank account beneficiary after owners death

Question 16

revocable trust

Answer 16

gantor can also be trustee or bene
income can go to grantors 
terms can be changed
grantor responsible for tax
assets remain in grantors taxable estate
Among the benefits of a revocable trust is that the grantor (settlor) retains all control over the assets

Question 17

irrevocable trust

Answer 17

trustee and bene cannot be the grantor
grantor can avoid income tax if distributed to benes(otherwise trust)
no longer considered in estate

Irrevocable life insurance trust. policy owned by someone other than inssured. when insured dies, proceeds to go owner of the policy. not apart of the estate

Question 18

per stirpes

Answer 18

assets pass to decendents of deceased benes

Question 19

intastate

Answer 19

means without a will. Administrator is assigned

Question 20

A form of business organization that offers flow-through of income and loss while providing the owner(s) with limited liability is

Answer 20

LLC

S corp

Question 21

JTWROS can’t

Answer 21

write checks in just one owners name