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Reverse Stock Splits
Course: Investment Planning Lesson 14: Evaluating Portfolio Performance Student Question: Hello! Re: Reverse Splits: When companies decide to do a reverse stock split, does the company always take in the outstanding shares as “treasury stock”? If not, what happens to the outstanding stock that has been taken away? Where does it go on the balance…
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Risk Exposure
Olivia is a 25-year-old single mother with twin girls who just turned three. Olivia has worked for the last 5 years as an administrative assistant for a local law firm. Olivia’s firm provides her with a basic medical insurance policy and a split definition disability. Which of the following is the biggest risk exposure for…
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Good to Know: Tricks, Traps and Opportunities in the 20% Qualified Business Income Deduction
Today, we conclude our 4-part series with insights into tricks, traps and planning opportunities in the 20% Qualified Business Income Deduction (QBID) under Internal Revenue Code Section 199A, brought to us courtesy of the Tax Cuts and Jobs Act. But first, here’s an uber quick refresher of key concepts from the previous three QBID blogs:…
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When to Use Negative Entries
Course: Fundamentals of Financial Planning Lesson 5: Using the HP12-C Calculator Student Question: Hi, how do i know when to use CHS in the calculator, I’m a little unclear about that. Instructor Response: Hi Julio- Good to hear from you. Hope all is going well thus far. Yeah, this can certainly be confusing. There are some…
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Insurance Contracts
Which of the following statements concerning insurance contracts is NOT correct? An insurance contract is bilateral because both the insurer and the insured make legally enforceable promises. In an insurance contract, the insurer has made legally enforceable promises for which it can be sued for breach of contract. Because property insurance contracts are personal, it…
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Determining Margin Calls
Course: Investment Planning Lesson 3: Equity Securities Student Question: I’m having trouble following the math on the example (shown below) at the bottom of the page. Could you please walk through the calculations? I understand how the initial margin with cash amount is calculated, but it gets a bit fuzzy for me after that. Example…
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529 Plan – Lump Sum Educational Funding
Nancy recently received $250,000 from her mother’s life insurance policy. She wants to use a portion of the money to fund her son’s college education that currently costs $10,000 a year and she anticipates an 8% yearly increase. Nancy can earn 7% on her investments and the overall inflation rate is 3%. Nancy’s son will…
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Good to Know: Calculating The 20% Qualified Business Income Deduction – The Basics
In our most recent blog on this topic – Part 2 of a 4-part series – we explained how Congress denied or restricted the 20% Qualified Business Income (QBI) deduction to owners of Specified Trades or Businesses (SSTBs) that earned more than an indexed amount. Today, in Part 3 of our 4-part series, we will…
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Alimony Recapture
Course: Income Tax Planning Lesson 4: Calculating Total Income Student Question: So, if I’m understanding this correctly, alimony recapture should no longer be an issue in 2019 and beyond due to alimony no longer being deductible, correct? Instructor Response: Hi Lafe, Good question. Alimony paid under a divorce decree executed before 1/1/19 will continue to…
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