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Portfolio Development and Analysis
A CFP® professional is reviewing a client’s investment portfolio. The client has the following accounts: Traditional IRA Roth IRA Taxable brokerage account Which of the following assets is generally MOST appropriate to hold in the Roth IRA? Municipal bonds A money market fund A diversified stock mutual fund expected to experience significant long-term appreciation Short-term…
Deductible Mortgage Interest
Course: Income Tax PlanningLesson 8: Arriving at Taxable Income Student Question: Hi, If a client has a $250k mortgage on a home worth $500k and they refinance to take equity out of their home, say $100k. Then they use that $100k to purchase a vacation home worth $300k (so they now have $450k in mortgage…
RMD Strategy
Evelyn, age 76, must take a required minimum distribution (RMD) of $40,000 from her traditional IRA in 2026. She does not need the income and plans to donate $25,000 to a qualified charity. Which of the following strategies would MOST effectively reduce Evelyn’s adjusted gross income (AGI)? Take the full RMD and then claim a…
The Great Wealth Transfer Is Already Here. Are Advisors Ready?
Introduction The Great Wealth Transfer is often discussed as if it is still decades away. It isn’t. The transfer has already begun. According to research from Cerulli Associates, approximately $124 trillion is expected to transfer through 2048, with roughly $105 trillion moving to heirs and another $18 trillion directed toward charitable causes.1 While the size…
Corporate Bonds in the Marketplace
Course: Investment PlanningLesson 9: Fixed Income Securities Student Question: Hi, Just a question about Corporate Bond Funds. Gathering my information from the book, it seems they are “debt notes” insured to keep the company going. If they are not repaid the person who accepted the “bonds” can sometimes take assets in the company, like equipment…
Net Investment Income
In 2026, a married couple filing jointly has modified adjusted gross income (MAGI) of $320,000, including $40,000 of net investment income. Assuming no other limitations apply, how much of their net investment income is subject to the 3.8% Net Investment Income Tax (NIIT)? The NIIT threshold in 2026 is $250,000. $0 $20,000 $40,000 $70,000 CLICK…
When Good Financial Advice Fails: The Behavioral Side of Planning
Good to Know Walk into almost any failed financial plan and you will rarely find a flawed spreadsheet. The asset allocation was reasonable. The tax strategy held up. The insurance recommendation fit the need. What went wrong happened after the meeting ended-in the quiet months when the client was supposed to act on advice they…
Integration with Social Security Definition
Course: Retirement PlanningLesson 5: Leveraging Nonqualifed Plans for Small Businesses and Not-For-Profit Employees and Owners Student Question: I’ve seen the phrase “plan formula can be integrated with social security” many times, but I don’t really know what this means. Can you explain how that works or is it beyond the scope of what we need…
Revocable Trusts
Which of the following statements regarding a revocable living trust is CORRECT? Assets transferred to the trust are removed from the grantor’s taxable estate The trust provides income tax-free growth during the grantor’s lifetime The grantor retains control over trust assets and may amend the trust The trust avoids gift tax reporting because it is…