Bruce Starks, CPA, CFP® – Page 25

What Do You Need to Know to Pass the CFP Board Exam?

Good to Know The question posed in this article’s title can be answered by applying the timeless wisdom of a Chinese general who died over 2,500 years ago. “If you know the enemy and know yourself, you need not fear the result of a hundred battles.” -Sun Szu, 544-496 BC While the CFP Board exam…

Passing Property Via Will

Course: Investment PlanningLesson 14: Evaluation Portfolio Performance Student Question: Hello- I’m a little confused about the example (below) discussing an heirloom of only sentimental value. Why would this be titled at all for a will, especially since an earlier lecture said items of no value would pass through will as the situation does not involve…

Gift and Estate Tax Basic Exclusion Amount vs. Generation-Skipping Transfer Tax Exemption Amount

Perry made a $12,060,000 taxable gift to his son Ross on 1/1/2022 and a taxable gift of $12,060,000 to Ross’s daughter Marilyn on April 30, 2022. Perry made no gifts or generation-skipping transfers before 2022. Note the following: The Basic Exclusion Amount (BEA) in 2022 is $12,060,000, The GST Exemption is the same dollar amount…

Pro Bono Opportunity: Help Prevent Financial Elder Abuse

CFP® Certificants in the News According to nolo.com, “Financial fraud is the fastest-growing form of elder abuse. Broadly defined, financial elder abuse is when someone illegally or improperly uses a vulnerable senior’s money or other property. Most states now have laws that make elder financial abuse a crime and provide ways to help the senior…

Boot: Recognized Gain in Like-Kind Exchange

Course: Income Tax PlanningLesson 16: Property Transactions Without Gain or Loss Recognition Student Question: Hello- Melvin gave $40,000 in cash plus real property with an adjusted basis of $30,000 (fair market value of $100,000) and received real property with a fair market value (FMV) of $150,000. In this transaction, Melvin would have no recognized gain,…

Investment Risk on the CFP Board Exam: Part IV

Good to Know This is the final article of our four-article series on investment risk for the CFP Board exam. Here’s a reminder of the risk concepts we’ve covered so far in the series: Part I: When to trust the “mean” return, Part II: Using standard deviation to manage investment risk, and Part III: Skewness—Do…

Percentage of Completion Method

Course: Income Tax PlanningLesson 10: Recognition of Expenses, Losses, and Deductions Student Question: Hello- Question 5 (below) did not make sense to me. I started out by breaking down by year — 400,000/2,100,000*3,000,000 and so forth, but did not arrive at the correct answer. So then I tried adding up 3 year — 400+650+700/2100000*3,000,000. That…

Investment Risk on the CFP Board Exam: Part III

Good to Know Question: Why should financial planners and advisors care about skewness? Answer: A negative skew can obscure excess downside risk in a portfolio. We discussed the mean (geometric average) return and standard deviation in our first two blogs. Now we’ll use those concepts to illustrate skewness in this, the third installment in our…

Premium Payments on Buy-Sell Agreements

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

LITTLE USED RESOURCE TO PASS THE CFP BOARD EXAM

CFP® Certificants in the News Certificants who successfully navigated the CFP Board exam know how challenging the exam can be. Your CFP Board invites you to share your experiences with those preparing [for] the exam through the Mentorship program. The following excerpt from the program provides a high-level summary. “The CFP Board Mentor Program connects…