Dan Madden, CFP® – Page 32 – Online CFP Program

Sale of Home by Surviving Spouse

April’s husband Jay died 5 years ago when their home was worth $600,000. Due to the soft real estate market, April kept the house until the housing market recovered. She finally sold the home this year for $950,000. What is the amount of April’s taxable gain or loss if she bought the home jointly with…

Tax Saving Strategies

Dan and Karen Burles have 2 children, Coy (age 12, student) and Roger (age 21, student). Dan and Karen own a security equipment sales and installation business, an LLC. Dan and Karen are in the highest income tax bracket. They have a portfolio with $130,000 of municipal bonds (annual income $5,200), $80,000 of corporate bonds…

Like-Kind Exchange

William found someone to buy his rental property in Maine. Which of the following properties that William would like to purchase as rental property would allow him to complete a like-kind exchange? A golf course rental property in Arizona that William identified 30 days after selling his Maine property. A beach rental house at the…

Pre- and Post-1987 After Tax 401(k) Contributions

Course: Retirement PlanningLesson 7: Income Distribution Planning for Qualified Plans Student Question: Regarding the after-tax example: Wouldn’t the full $10,000 hardship come first from the $80,000 that was contributed pre-1987? Don’t you exhaust the $80,000 before concerning yourself with the exclusion ratio? From the Course: Once the pre-1987 after-tax contributions have been withdrawn, or if none existed,…

Various Sources of Income

A client received an annual salary from his employment of $40,000. He was a 50% owner of both a C corporation and an S corporation. The C corporation had net profits of $20,000, and the S corporation had income of $10,000. Neither corporation made a distribution. The client’s revocable trust had income of $5,000 but…

Carryover of Losses

The following information has been provided by a client for income tax purposes: $45,000 salary from an S corporation where the client is a vice-president $3,500 loss from the S corporation $1,500 loss from a 3% interest in a limited partnership $1,200 loss from a 10% interest in Middletown Partnership in which the client does…

Center for Financial Planning Exceeds $1 million in Scholarships

CFP® Board Updates The CFP Board announced in June that the Center for Financial Planning has surpassed $1 million is scholarships. This incredible milestone brings the Center to a total of 225 scholarships awarded. What makes these scholarships so special is that most are focused on students in underrepresented populations in financial planning, continuing the…

Skip Persons and the Generation Skipping Transfer Tax

Course: Estate PlanningLesson 7: Transfer Taxation IV – Generation Skipping Transfers Student Question: Regarding example below, would the death of the father, Stephen, not move Andrew one step up making him only one generation below Mrs. Jones? Would this not remove the generation skipping transfer tax? EXAMPLE: Upon her death, Mrs. Jones left her estate…

Medicare Part A Expenses

Which of the following individuals currently covered by Medicare Part A will not have any of their expenses covered by Medicare Part A? Evan who spent one week in hospice care before losing his battle with cancer. Felicia who was treated by her doctor for Strep throat. Greg who was needed a walker following hip…

OASDI Disability Income Benefits

Which of the following statements concerning OASDI disability income benefits is correct? Disability is defined as the inability to perform all major duties of the insured’s own occupation. Unless specifically exempted, a waiting period of 12 months must be satisfied. If the disabled worker is also receiving workers compensation benefits, the full OASDI benefit is…