Course:  Income Tax PlanningLesson 10: Recognition of Expenses, Losses, and Deductions Student Question: Hi- I read that advisory fees are no longer deductible. So, in this question (below), is it deductible because this is treated as a business deduction since Roger is Self-Employed? Alisha Sheridan, A CFP licensee and fee-only financial planner, has assisted Roger Regate, a self-employed physician, in tax and investment…

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A Section 303 redemption is most likely appropriate for which of the following estates? At Fred’s death, Fred owned all of his assets including the stock of a closely held corporation in Joint Tenancy WROS with his wife. Before Gloria’s death, she transferred all of her assets including the stock in a closely held corporation…

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Which of the following assets would be included in Martin’s gross estate? Life insurance on Martin’s life purchased one year before he died by the trustee of Martin’s irrevocable life insurance trust. Life insurance on Martin’s life purchased by Martin’s wife two years before he died. Life insurance on Martin’s life purchased three years before…

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Which of the following statements concerning differences between qualified and nonqualified stock options is correct? The employer can deduct the cost of both when they are granted. The employer can deduct the cost of qualified stock options but not nonqualified stock options. The employer can deduct the cost of qualified stock options, but the cost…

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CFP® Board Updates On May 29, 2020, the CFP Board announced the adoption of new Procedural Rules for the enforcement of the ethical and practical standards for CFP® Professionals. These new procedural rules become effective on June 30, 2020, when the CFP Board begins enforcement of the new Code of Ethics and Standards of Conduct…

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KC Corporation offers a 401(k) Plan. Under the ADP rules, what is the maximum salary percentage the highly compensated employees can contribute if the non-highly compensated employees contribute 6% of their salary? 6% 8% 10% 12% CLICK TO REVEAL ANSWER Expand B is the answer. Since the non-highly compensated employees contributed between 2% and 8%,…

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Course: Fundamentals of Financial PlanningLesson 5: Using the Calculator Student Question: My question relates to being able to clearly distinguish when the CFP Board Exam will require an annual or other period for the answer. Question 5(b) asks: “What is the rate of return on Investment 2 using daily compounding?” What is the annual rate of return on Investment 2, made 3 years…

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Which of the following statements concerning the characteristics of ESOPs and stock bonus plans is correct? The employer is required to make a specific annual contribution. Non-vested account balances of terminated participants are usually reallocated to the remaining participants. The employer assumes the risk associated with the investment of trust fund assets. The increased investment…

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Lucky Star Corp has been extremely lucky with their defined benefit plan as it is currently overfunded. Management decided to terminate the plan while they are overfunded and share the excess with the employees. What amount of reversion tax will Lucky Star Corp have to pay upon termination? 0% 10% 20% 50% CLICK TO REVEAL…

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Which of the following is a monetary policy that will tighten the money supply? Sell government securities Lower the discount rate Decrease government spending Increase taxes CLICK TO REVEAL ANSWER Expand A is the answer. Selling government securities is a monetary policy that will tighten the money supply as the cash used to purchase the…

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