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CFP® Practice Question: How To Analyze A Buyout Offer
Mary and Penny were equal partners in the ownership of a gift shop but after several disagreements, have decided to terminate the partnership. Mary offers to purchase Penny’s interest by paying either $20,000 today or $35,000 five years from today. If Penny’s opportunity cost is 12% annually, which of the following options should Penny choose?…
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Student Question of the Week: QTIP Marital Trust
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…
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Student Question of the Week: Coinsurance and Replacement Cost
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…
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CFP® Practice Question: What Would You Do if Laid Off?
THIS QUESTION BROUGHT TO YOU BY: KEIR EDUCATION RESOURCES To learn more about Keir’s CFP Board Exam review materials and classes, select the program you’re registered in below: Practice Question: Bob, age 47, has worked for XYZ Company the past 12 years. XYZ Company has lost a major contract and must begin downsizing immediately. Bob was…
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Student Question of the Week: Buy-Sell Agreements – Funds for the Deceased’s Family
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…
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CFP® Practice Question: Calculating Education Expenses
THIS QUESTION BROUGHT TO YOU BY: KEIR EDUCATION RESOURCES To learn more about Keir’s CFP Board Exam review materials and classes, select the program you’re registered in below: Practice Question: Tammy wants to set aside a sum of money today that will be sufficient to pay for 4 years of college tuition. The 4 tuition payments…
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CFP® Practice Question: Calculating Mortgage Payments
THIS QUESTION BROUGHT TO YOU BY: KEIR EDUCATION RESOURCES To learn more about Keir’s CFP Board Exam review materials and classes, select the program you’re registered in below: Colin Farrell has a gross annual income of $48,000. The current interest rate for 30-year mortgages is 7%. The house that Colin is considering has property taxes of…
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Student Question of the Week: Retirement Protection Benefit Rider Versus Life Insurance
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…
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CFP Board Updates: July CFP® Exam Update
Those taking the July CFP® exam are well-served by understanding the new Medicare taxes. The 3.8% Medicare tax on unearned income and the .9% Medicare tax on wages and self-employment income are likely to be tested on the July Exam. The good news is that the Board is expected to provide the adjusted gross income…
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