Posts by Dan Madden, CFP®

Student Question from Greg CCourse:  Estate Tax Planning Student Question: Dan, The assets in a QTIP trust are automatically included in the surviving spouse’s estate, correct? Thanks, Greg Instructor Response: Hi Greg! Terminal interests are NOT normally included in the beneficiary’s estate. However, the IRS makes a special exception to “Qualify” (hence, QTIP for “Qualified” instead…

Student: Question from Stacey CCourse:  Insurance Student Question: Review Question #5 (shown below) deals with Coinsurance. In the answers, it shows the coinsurance equation to be [(the insured amount/(.80 x replacement cost)] x AMOUNT INSURED.  Is it “amount insured” or “replacement cost of loss” because those amounts are different. Please provide clarification. Thanks. Question 5: Jill…

Student Question from JohnathonCourse:  Income Tax Planning Student Question: Good Afternoon: I am confused by the answer for the question below. It indicates that one of the correct responses is that the family members of the deceased will receive cash from the life insurance policies. The way I understand the Buy-Sell Agreement process is that the…

Student Question from: Margie L.Course:  Insurance Planning Student Question: Why would the Insured purchase a Retirement Protection Benefit Rider instead of a life insurance policy (i.e., 10, 15, 20 or 30-year term)? Instructor Response: Hi Margie!  This is a very good question.  The Retirement Protection Benefit Rider provides something that life insurance doesn’t provide. A Retirement Protection…

Student Question from: Jessica W.Course:  Fundamentals – Calculator Student Question: I am getting confused on when the PV should be entered as a negative or positive number for these calculator problems. If I enter it the wrong way (negative when needs to be positive) I am getting the incorrect answer. Thanks! Instructor Response: This is…

Student Question from: Susan M.Course:  Income Tax Student Question: On Question 2  – Why are we adding the $2,500 security in as a capital addition when it does not lengthen the life of the building?  By definition, doesn’t it have to extend the life of the asset by at least 1 year? 2. Madden Incorporated…

Student Question from: Vincent C.Course:  Fundamentals  – Education Planning Student Question: For the basic rule of only using cash contributions for 529 Plans, can you roll over appreciated stocks from UTMA/UGMA and ESA?  If so, do you have any taxable event tied to the rollover of stocks (if an unrealized gain exists)? Instructor Response: Hi…

Student Question from: Harry F.Course:  Estate Planning Student Question: Dan, given the information on this page, why do Grantor Trusts exist?  What purpose do they serve? Grantor Trusts A Grantor Trust is a trust in which the grantor, due to retained control over the income and/or corpus of the trust, is treated as the owner of…

Student Question from: Katy U.Course:  Income Tax Student Question: On the adjusted basis portion in the question below – why is the $25,000 not included? Isn’t that a commission? I thought you are supposed to include the commission or other similar costs. Nick purchased an office building in Year 1 for $150,000 and sold it…

Student Question from: SteveCourse:  Estate Planning Student Question: Hello Dan, The topic of “Transfers within three years of death” has been very confusing to me. My attempts to research this further on the Internet makes it even more confusing because of either incomplete or flat out incorrect information being provided. It seems that a lot…