Bruce Starks, CPA, CFP® – Page 50

Student Question of the Week: The Applicable Exclusion Amount

Student Question from Andy MCourse: Estate Tax Planning Student Question: A correct response to a question in the textbook reads, “If an individual does not use the Unified Credit, it cannot be TRANSFERRED to others for their use.” Although the 2014 Unified Credit of $2,081,800 is not the same as the $5,340,000 Applicable Exclusion Amount,…

Bipartisan Solutions for America’s Broken Tax Code

Congressman Dave Camp (R-MI), Chairman of the powerful Ways and Means Committee, recently released draft legislation dubbed The Tax Reform Act of 2014 (TRA 2014). TRA 2014 aims at job growth, a simpler and fairer tax code, and putting more hard-earned income back into the hands of taxpayers. Laudable goals all, but the bigger news…

Secrets of the Roth IRA

It would be a mistake to consider the Roth IRA (or Designated Roth account) merely for the income tax-free qualified distributions. There’s more, much more, to the Roth and we’ll reveal a condensed thumbnail of just three commonly overlooked benefits. 1) Minimize the 3.8% Net Investment Income Tax (NIIT) Because the NIIT is based in…

Student Question of the Week: FDIC versus SIPC

Student Question from Leslie GCourse: Fundamentals of Financial Planning Student Question: I thought that all investments were SIPC covered; however, does that change for an IRA invested in a money market fund or CDs? Thanks! Instructor Response: Hi Leslie! The purpose of the FDIC is solely to provide consumer confidence in our nation’s banking system.…

Student Question of the Week: Prorate Section 2032A Recapture?

Student Question from Greg CCourse: Income Tax Planning Student Question: Is the recapture full or is it prorated? I looked at Section 2032A and couldn’t quickly tell although it does not appear to be prorated. That is a complex Code section and the slide appears to do a nice job of distilling it down to…

Surprises from the November 2013 CFP® Certification Exam

Four Surprises to be Aware Of: Psychological Warfare First 10 questions of the 1st exam session were complex to very complex calculations At least one had NO correct answer! Forewarned is forearmed Calculator proficiency is becoming important once again Disproportionate Practice Standards Testing Concepts versus minutiae Extreme focus in one topical area

Student Question of the Week: Net Present Value Calculation

Student Question from Greg CCourse: Fundamentals of Financial Planning Student Question: Hello! It seems to me that the loan proceeds in Question 3 should be positive cash flow entries in year zero, especially if their repayments are negative CFs in Year 5. Why is this not so? Thanks – Greg Question 3: Donald buys small houses…

CFP Board Updates: July CFP® Exam Update

Those taking the July CFP® exam are well-served by understanding the new Medicare taxes. The 3.8% Medicare tax on unearned income and the .9% Medicare tax on wages and self-employment income are likely to be tested on the July Exam. The good news is that the Board is expected to provide the adjusted gross income…

Good to Know: CFP® Practitioner Updates

A financial planner’s work is never done. The administration’s proposed 2014 budget takes aim squarely at the “permanent” estate tax reforms passed in January 2013. The current $5,250,000 estate tax exemption would plummet $1,750,000 to only $3,500,000. The estate tax rate would jump to 45% from the current 40%. But that’s not all. The proposal…

CFP Board Update: Tips for Passing the CFP® Exam

The CFP® Exam continues to evolve from the topic-based rubric of the past. Prior exams were built from a pre-set mix of questions from Fundamentals, Risk Management, Investments, Income Tax, Retirement, and Estate Planning. The CFP® Exam now focuses on eight “Job Task Domains.” Six domains mirror the six steps in the financial planning process while Communications…