Dan Madden, CFP® – Page 13 – Online CFP Program

Basis on Sale of Gifted Stock

Tom gave his son, David, a birthday present of Big M stock with a fair market value of $50,000. Tom paid gift tax of $9,700 as Tom had previously given David earlier this year a cash gift. Tom’s adjusted basis in the stock on the date of the gift was $30,000. Three months later, David…

Characteristics of a Will

Which of the following statements concerning a Will are correct? (1) A will can be altered, amended, or completely rewritten at any time before a person’s death. (2) A will cannot be rewritten but can be amended at any time by a codicil. (3) A will must be signed by the maker and usually must…

CFP Board Releases July Exam Results

CFP® Board Updates The CFP Board announced the results of the July 2024 exam. This year’s July exam was administered between July 9th and 16th. During this window, 2,999 candidates took the exam, during which 65% received passing scores. The turnout for the July exam was the 2nd largest in exam history, demonstrating the growing presence of…

Calculating Rate of Return

Course: Investment PlanningLesson 1: Key Principles of Investing Student Question: Hope you are doing well. Can you help solve a practice question? I looked through the textbook and my notes, and just couldn’t wrap my brain about how to solve the problem below. The confusing part to me is that the fund was not sold, so…

Retirement Funding Calculation

Tom wants $70,000 a year in today’s dollars in retirement. He anticipates retiring in 15 years and living in retirement for 30 years. Tom can earn 6% on his investments and he expects inflation to average 4%. Approximately how much should Tom have saved by the day he retires to meet this goal? $1,021,221 $1,573,041…

Annual Return and Compounding

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…

Defining an Insurance Contract

Olivia is a 25-year old single mother with twin girls who just turned three. Olivia has worked for the last 5 years as an administrative assistant for a local law firm. Olivia’s firm provides her with a basic medical insurance policy and a split definition disability. Which of the following is the biggest risk exposure…

CFP Board Announces new Chair-Elect

CFP® Board Updates At its July meeting, The CFP Board of Directors announced that it has elected Terri Kallsen as its 2025 Board Chair-Elect. She will serve as the Chair of the Board if Directors in 2026. Liz Miller, the 2024 Chair-Elect, will serve as Chair of the Board in 2025. To learn more about…

Coverdell ESA versus 529

Course: Fundamentals of Financial PlanningLesson 7: Educational Aid and Funding Calculation Student Question: So is there ever any benefit to choosing a Coverdell ESA over a 529 Plan? It seems the big difference in the two is that the Coverdell has an AGI limit, so why would you just not always steer clients towards 529 Plans since…

Underinsured Dwelling

Tom carries an H0-3 policy with $300,000 of coverage and a $3,500 deductible. It would cost $500,000 to rebuild Tom’s house. How much will his insurance company pay on a $100,000 claim related to a fire that started in Tom’s kitchen? $68,000 $71,500 $96,500 $100,000 CLICK TO REVEAL ANSWER Expand B is the answer. Tom…