Bruce Starks, CPA, CFP® – Page 23

Protect Concentrated Positions With No Out-of-Pocket Cost

Good to Know Unmanaged concentrated position risk can be a ticking time bomb in your client’s portfolio. For example, one of the nation’s oldest (founded in 1879) and most respected banks was trading at $38/share in 2007. It had a long-term, loyal stockholder following, many of whom with holdings — accumulated over generations — valued…

Deducting Gifts to Customers

Course: Income Tax PlanningLesson 10: Recognition of Expenses, Losses, and Deductions Student Question: Can you clarify the deductibility of gifts when we’re talking about employees of a business versus self-employed individuals? It seems the rules have changed on these. Instructor Response: An employee (W2 employee or statutory employee) can no longer deduct unreimbursed gifts to…

Financial Planning and Happy Marriages

Good to Know Question: What can be a more common cause for divorce than infidelity? Answer: Unresolved money conflicts.1 While being on the same page over money may not guarantee the coveted fiftieth anniversary, fighting over money can undermine marriages well before the golden anniversary. The issues vary, but communication around marital finances can…

Life Insurance in a Cross-Purchase Buy-Sell Agreement

Course: Insurance PlanningLesson 17: Business Uses of Life and Disability Insurance Student Question: I have a quick question regarding buy/sell agreement. I’m not clear on who would pay the premiums on disability and or life insurance on the principals and the key employees? Instructor Response: Great question. A buy-sell agreement relates to owners of the…

Get the Bear, or the Bear Gets You

Good to Know Loss aversion, taken to its extreme, can wreck long-term retirement planning and investment success. We’ll unpack what drives “irrational” loss aversion, identify a dangerous decision error, and illustrate a potential guardrail to remain on track with our long-term investing plans. “Irrational” Loss Aversion We’re a logical, evolved species, right? Before you answer,…

Clarifying Tort Liability

Course: Retirement PlanningLesson 2: Qualified Plan Advantages and Disadvantages for Employees and Business Owners Student Question: Hi, I have a few questions regarding tort liability. Negligence is Tort Liability? Why isn’t it contractual? Are all torts criminal in nature? Instructor Response: Hi, Good questions here. See below for my response to each. Yes Tort law…

Chapter 13 Bankruptcy Means Test

Course: Estate PlanningLesson 13: Case Study Online Student Question: Hi, I am a little confused how one set amount – $100 – is the threshold for means testing a bankruptcy petitioner, when the amount of debt a borrower may owe can vary by large amounts. It would seem the amount left over (income minus allowable…

Get the CFP® Certification: 3 Key Reasons

CFP® Certificants in the News CFP® Certification is fast becoming a “must-have” designation for at least three reasons: Client awareness, Fiduciary Ethical Standard, and Doing well by doing good. Client Awareness An impressive 83% of consumers are aware of the CFP® Mark,1 far outstripping consumer awareness of other financial planning designations. CFP Board played a…

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…

Avoid Turning $1,000,000 into $12,000

Good to Know Imagine an individual investor passionate about a specific stock (it happens more often than you might think). Assume the investor’s portfolio is worth $2 million, but $1 million is in just one stock. How could that $1,000,000 concentration hemorrhage into only $12,000 in just over one year? Sadly, that’s precisely what happened…