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Municipal Bond Tax Equivalent Yield
John, a high-income investor in the 35% federal tax bracket, is considering purchasing a tax-free municipal bond with a yield of 3.5%. He is also evaluating a taxable corporate bond with a yield of 5.0%. Which of the following statements is correct regarding the tax-equivalent yield of the municipal bond? The tax-equivalent yield of the…
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CFP Board Releases AI Guidance
CFP® Board Updates The CFP Board has released the Generative AI Ethics Guide: A Checklist for Upholding the Code and Standards to assist CFP® professionals in ethically integrating generative AI into their practices. The guide provides practical steps to address key concerns such as data privacy, accuracy, and bias, ensuring that AI enhances rather than compromises…
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Crummey Powers
Insurance PlanningLesson 16: The Irrevocable Life Insurance Trust Student Question: Must Crummey powers always be in effect to apply the annual gift tax exclusion in order to transfer to an irrevocable trust? Or is it the case that as long as it was done once, will all transfers be eligible for the annual gift tax exclusion? Instructor…
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Common versus Preferred Stock
Michael is evaluating two different types of stocks for his investment portfolio: common stock and preferred stock. He wants to invest in a security that provides regular income while still offering some potential for appreciation. Which of the following statements best describes the key differences between common and preferred stock? Common stockholders receive fixed dividends,…
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5 Habits of Successful Examinees
CFP® Certificants in the News Successful people are simply those with successful habits -Brian Tracy Habits are either your friend or foe. Take eating habits for example. According to WebMD the Mediterranean Diet is notable for: “Reducing the risk for cardiovascular diseases, such as heart attack and stroke Supporting a healthy weight, Supporting healthy blood sugar,…
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Maximum Family Benefit
Course: Estate PlanningLesson 10: Applications of Estate Planning Concepts Student Question: Does the maximum family benefit apply to a husband and wife that are both fully insured if the combined total between the two exceeds the maximum family limit? If I understand correctly, the maximum family limit only applies if there are beneficiaries within the…
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The Kiddie Tax
Sarah, age 16, is claimed as a dependent by her parents. In 2025, she earned $2,500 from a part-time job and received $6,000 in dividends from a custodial investment account her grandparents set up for her. Her parents have a marginal tax rate of 24%. How will Sarah’s unearned income be taxed under the Kiddie…
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CFP Board’s Study Shows Impact of CFP® Professionals on Financial Well-Being
CFP® Board Updates The CFP Board has released the first findings from its Financial Planning Longitudinal Study, a decade-long research initiative analyzing the financial well-being of American households. The study’s initial results reveal a significant advantage for individuals who work with CERTIFIED FINANCIAL PLANNER® (CFP®) professionals, showing they achieve better financial outcomes and greater personal…
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QTIP Marital Trust
Course: Estate PlanningLesson 10: Applications of Estate Planning Concepts Student Question: Can you help clarify for me seemingly contradictory information in the two sentences below regarding “disinheriting children”? The first sentence seems to imply that the surviving spouse could disinherit children. However, the second sentence states that QTIPs are often used to “prevent a surviving spouse from disinheriting children.”…
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