Bruce Starks, CPA, CFP® – Page 31

Donating Short-term Appreciated Securities

Course: Income Tax PlanningLesson 15: Property Transactions Student Question: Dear Greene Consulting Team – In the lesson, deducting donations of ‘cash’ versus ‘long term appreciated securities’ are differentiated. I’m curious about “short term appreciated securities”. In other words, if I own a stock – bought at $10,000 and it’s worth $50,000 when I donate, but…

Current Ratio and Primary Residence

Course: Fundamentals of Financial PlanningLesson 3: Personal Financial Statements Student Question: Hi What role does the client’s primary residence play in the current ratio calculation? Is their outstanding mortgage loan amount considered a liability? Thank you Candace Instructor Response: Hi Candace, That’s a great question. The residence is not considered a liquid asset and is excluded from…

Client Psychology

Good to Know Client decisions, including financial ones, may be driven more by psychology than just cold, hard, rational facts. The chart below identifies four powerful psychological influences. Client Psychology—Influences Values Fundamental personal beliefs Attitude The tendency to view an investment positively or negatively based on our beliefs and experience Bias A behavioral tendency Heuristic…

Retirement Plan Required Minimum Distributions

Course: Retirement PlanningLesson 5: Leveraging Nonqualified Plans for Small Business and Not-For-Profit Employees and Owners Student Question: Hi TI’m trying to distinguish when the required minimum distribution amounts are at 72 years old, versus when they are 70 ½. IRA’s are now 72, correct? Is a 401k plan and a 403b 70 1/2? Thank you…

CFP Board Discipline—Learning from Others’ Mistakes

CFP® Certificants in the News This blog will emphasize recent CFP Board disciplinary trends and the avoidable mistakes made by certificants and candidates1 that can lead to unnecessarily severe discipline. Data for this blog is taken from a CFP Board News Release dated June 30, 2021, in which forty disciplinary actions were published. The topics…

Equitable Distributions

Course: Income Tax PlanningLesson 15: Property Transactions Student Question: Hi This page explains how the basis for inherited property is affected for common-law states and community property states. How is it affected for equitable distribution states like Florida? Thank you Anibal Instructor Response: Great question Anibal! Only marital property is subject to equitable distribution in…

Understanding the Investment Loan Interest Deduction

Good to Know Can you deduct the interest you pay on loans used to make investments? Conventional wisdom would have you believe the rules are complex. Yet, we only need to address the following three questions to gain clarity. What kinds of interest paid on investment loans are deductible? How do dividend income and capital…

Plan Monitoring and Updating Responsibility

Course: Fundamentals of Financial PlanningLesson 9: CFP Board Regulatory Requirements Student Question: Hi In lesson 1, for step 7, I have that a certificant is responsible for monitoring and updating only if explicitly called for in the scope of the engagement. In Lesson 9, I’m reading that the certificant is responsible unless explicitly excluded. Which…

Retirement Plan Required Minimum Distributions

Course: Retirement PlanningLesson 5: Leveraging Nonqualified Plans for Small Business and Not-For-Profit Employees and Owners Student Question: Hi I’m trying to distinguish when the required minimum distribution amounts are at 72 years old, versus when they are 70 ½. IRA’s are now 72, correct? Is a 401k plan and a 403b 70 1/2? Thank you…

2021 Child and Dependent Care Credit

Good to Know The Child and Dependent Care Credit (a potentially refundable tax credit for 2021) is to incent employment. Employed taxpayers receive a tax credit if they have dependents who need child care. The credit is available to those taxpayers currently employed and those seeking employment. Restrictions, conditions, and coordination rules apply. Restrictions The…