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Annual Background Checks of CFP® Certificants
CFP Board’s December 17, 2019, Independent Task Force Report Apparently, there’s a new Sheriff in town. As a result of a recent task force analysis, CFP Board will now conduct annual background checks on CFP® Certificants. An overview of the Board’s report follows: Overview On July 30, 2019, the Board of Directors of CFP Board (“The Board”)…
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Distributable Net Income Application
Course: Estate Planning Lesson 9: Income Taxation of Trusts and Estates Student Question: Hi Bruce When a Trust has an income accumulation year, must the Trust pay taxes on that accumulation of DNI in the year of accumulation? If so, why do that – why would a Trust hold income at the confiscatory Trust income tax rates? If not, how many years can a…
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Qualified Pension Plan Ratio Percentage Test
Assume that, of the 100 employees eligible for participation in G Company’s qualified pension plan, 20 are highly compensated employees and all 20 participate. What is the minimum number of G Company’s non-highly compensated employees that must participate in G Company’s qualified pension plan to meet the ratio percentage test? 20 50 56 70 CLICK…
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Good to Know: Dangerous Mistakes In Retirement – Wrong Spend Down Strategies Slows Portfolio Growth
Good to Know Savvy financial advisors know that prudence in taking retirement distributions is balancing income tax efficiency in the current year against long-term retirement portfolio growth. While each client may present unique needs, a discussion starter to the question “where should I take my distributions from?” follows: First – Take the full amount of…
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Percentage of Completion Method
Course: Income Tax Planning Lesson 10: Recognition of Expenses, Losses, and Deductions Student Question: Question 5 (below) did not make sense to me. I started out by breaking down by year – 400,000/2,100,000*3,000,000 and so forth, but did not arrive at the correct answer. So then I tried adding up 3 year – 400+650+700/2100000*3,000,000. That…
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Power of Attorney over Financial Affairs
Laura is concerned she will develop Alzheimer’s disease later in life similar to her mother. Which of the following documents should Laura execute to make sure her son is able to handle her financial affairs in the event she does develop Alzheimer’s disease? Durable springing power of attorney Nondurable springing power of attorney Durable nonspringing…
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CFP® Certificants in the News: Women’s Initiative (WIN)
CFP® Certificant in the News According to the CFP Board, “the percentage of women CFP® professionals has remained flat at 23 percent for at least a decade.” Based upon CFP Board commission researched aimed at increasing that percentage, the “WIN Council” and “WIN Advocates” were created by the Board. Key information follows: “WIN Council Following…
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Expanded Annual Exclusion Amount
Course: Estate Planning Lesson 5: Transfer Taxation II – Lifetime Transfers Student Question: Hi Bruce, I’m reading about the “expanded Annual Exclusion Amount of $155,000.” Just so I’m clear, is this an expansion from the “regular” $15,000 Annual Exclusion Amount? And what is it for? Thanks! Kevin Instructor Response: Hi Kevin, You are correct. The…
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Owner of a Grantor Trust
In which of the following situations would the grantor of a trust not be considered the owner? The grantor has a reversionary interest in the trust, of which the grantor’s son is the sole beneficiary, but the grantor cannot exercise this power until eight years after transfer of property to the trust. The grantor retains…
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