Posts by Dan Madden, CFP®
Calculating Gain in an Installment Payment Transaction
Which of the following individuals would be most likely to need to register with the SEC under the Investment Advisers Act of 1940? Adam who retired last year from a big brokerage house, but he recently started providing services to 12 clients who live in his neighborhood that he met while out golfing. Belinda who…
Read MoreBilateral Contracts in Insurance
Course: Insurance PlanningLesson 2: Fundamentals of Insurance Student Question: Regarding the Bilateral Contact section, how is an insurance contract not a bilateral contract? If I’m reading correctly, it states that a bilateral contract is one in which both parties have responsibilities. In an insurance contract, the insurer has to provide insurance and the insured pays the…
Read MoreCalculating Gain in an Installment Payment Transaction
George Sloan sold farmland valued at $200,000 to his son, Frank. Frank paid $40,000 at closing and signed an installment obligation for the remainder of the purchase price to be paid over ten years at 10% interest on the outstanding balance. If Frank sells the property to a second purchaser for $210,000 cash 20 months…
Read MoreRemote Proctoring Option for September 2020 CFP Board Exam
CFP® Board Updates On July 16th, the CFP Board announced an update to arrangements for the September 2020 examination. For candidates who would need to travel more than 50 miles or have a health concern, so long as they can meet minimum technology requirements, a remote proctoring option will be available. This is in response…
Read MoreAppropriate Valuation Method
Sam McBuck has an estate of $10 million and would like to leave it to his nephews. Sam assumes he will live for at least 5 more years. The property in Sam’s estate currently includes the following assets: An apartment building in downtown New York that Sam owns with three partners, each of whom wants…
Read MoreWhich Trust is it?
Kathleen transferred her closely held stock to a trust for the benefit of her two daughters. Kathleen will receive a $50,000 distribution each year for the next 10 years from the trust. At the end of the trust term, Kathleen’s daughters will each receive 50% of the remaining trust assets. What type of trust did…
Read MoreSelecting an Appropriate Trust
Which of the following trusts should Jason establish in his Will to provide for his son Gaven’s living expenses until Gaven reaches age 65 if Gaven is currently a 30-year old unemployed aspiring actor? 2503(b) Trust 2503(c) Trust Crummey Trust Totten Trust CLICK TO REVEAL ANSWER Expand A is the answer. The 2503(b) Trust would…
Read MoreDeducting Advisory Fees
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…
Read MoreSection 303 Redemption
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…
Read MoreLife Insurance in the Gross Estate
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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