Blog

Mid-Quarter Depreciation Convention

By Bruce Starks, CPA, CFP®

Course: Income Tax Planning Student Question: Hello, see the question below. I got this question right, but the explanation of why I got it right is weird. I thought mid-month depreciation was only used for real property, and this is saying it is used for equipment. Then, the explanation of the correct answer talks about…

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Early Retirees—Alternatives to Medicare, Part III

By Bruce Starks, CPA, CFP®

Good to Know This article is part III of a IV-part series to help early retirees make informed healthcare coverage choices for the years before they’re eligible for Medicare.  In Part I, we peeled back the onion on faith-based medical cost-sharing ministries.  In Part II, we illustrated how Affordable Care Act (ACA) Policies can help.…

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Maximum Potential Gain On Long Call

By Bruce Starks, CPA, CFP®

What is the maximum potential gain for an investor who is long a call? It is limited to the amount paid for the option Capped by the exercise price It is equal to the loss of a similar short put position Unlimited CLICK TO REVEAL ANSWER Expand The correct answer is number 4.  An investor…

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Solving for Bond Yield

By Dan Madden, CFP®

An investor bought a bond at par that matures in 10 years. The bond pays an annual coupon of $110 and the reinvestment rate is 7%. What is the realized compound yield of this bond? 7.23% 8.01% 9.67% 14.10% CLICK TO REVEAL ANSWER Expand C is the answer. One would anticipate a realized compound yield…

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Early Retirees—Alternatives to Medicare, Part II

By Bruce Starks, CPA, CFP®

Good to Know This article is part II of a series to help early retirees make informed healthcare coverage choices for the years before they’re eligible for Medicare.  Remember that the first article in this series described how faith-based medical cost-sharing ministries can offer cost-effective coverage for those clients willing to accept behavioral exclusions from…

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Loan Impact on Basis in a Modified Endowment Contract

By Dan Madden, CFP®

Course: Insurance PlanningLesson 15: Income Taxation of Life Insurance Student Question: Can you help me better understand the difference between policy basis in a normal policy and policy basis on a modified endowment contract. From the Coursework: But for MEC purposes, the basis is increased by any portion of loans that were considered taxable income…

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Rental Property Like-Kind Exchange

By Dan Madden, CFP®

William found someone to buy his rental property in Maine. Which of the following properties William would like to purchase as rental property would allow him to complete a like- kind exchange? A golf course rental property in Arizona that William identified 30 days after selling his Maine property. A beach rental house at the…

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401(k) Plans and Same-Sex Couples

By Bruce Starks, CPA, CFP®

CFP® Certificants in the News Financial planning for same-sex couples is as important as planning for opposite-sex couples according to CFP Board.  For context, the Supreme Court’s 2015 decision in Obergefell gave same-sex couples the right to marry and, once married, to enjoy the same rights as opposite-sex married couples.  However, the new rights generally…

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Annual Return and Compounding

By Dan Madden, CFP®

Course: Fundamentals of Financial PlanningLesson 5: Using the Calculator Student Question: My question relates to being able to clearly distinguish when the CFP Board exam will require an annual, or other period for the answer.Question 5(b) asks: “What is the rate of return on Investment 2 using daily compounding?” What is the annual rate of…

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