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CFP® Practice Question: Disadvantages of Universal Life Insurance
Which of the following statements concerning the disadvantages of universal life insurance is (are) correct? (1) The future yield potential for the policy owner is uncertain. (2) The semi-compulsory regular savings feature of conventional whole life insurance is lost. (3) Since the cash value is invested primarily in common stocks and other equities, it is…
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CFP® News: CFP Board Changing Exam-Taking Procedure
The CFP Board has announced that starting in November 2014, the national Board Exam will be computerized and shortened to 6 hours. The current exam is given over a two-day period, totaling 10 hours, and on a scantron. An ongoing concern of the CFP Board has been the number of students in Approved Educational Programs…
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Student Question of the Week: Prorate Section 2032A Recapture?
Student Question from Greg CCourse: Income Tax Planning Student Question: Is the recapture full or is it prorated? I looked at Section 2032A and couldn’t quickly tell although it does not appear to be prorated. That is a complex Code section and the slide appears to do a nice job of distilling it down to…
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CFP® Practice Question: Including Short-Term Disability in Gross Income
Bob broke his leg skiing earlier this year. Bob collected $10,000 from his short-term disability plan, paid for solely by his employer. How much does Bob have to include in his gross income? A. $0 B. $5,000 C. $8,500 D. $10,000 CLICK TO REVEAL ANSWER The correct answer is D. Bob must include 100% of…
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Surprises from the November 2013 CFP® Certification Exam
Four Surprises to be Aware Of: Psychological Warfare First 10 questions of the 1st exam session were complex to very complex calculations At least one had NO correct answer! Forewarned is forearmed Calculator proficiency is becoming important once again Disproportionate Practice Standards Testing Concepts versus minutiae Extreme focus in one topical area
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Student Question of the Week: Property Ownership
Student Question from EtebeCourse: Estate Planning Student Question: Good evening, #7 on the review question…why would four business associates with equal partnership be tenants in common? I thought it would be JTWROS as their interest is equal and undivided. Thanks. 7. An investment by four business associates, each wishing to contribute 25% of the purchase price. 100%…
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Student Question of the Week: Insurance Policy Dividends
Student Question from Margie LCourse: Insurance Planning Student Question: Insurance policy dividends may be taxable if they are paid in cash to the policy owner, but what about dividends that remain in the policy to purchase additional coverage (Paid-Up Additions)? Are those dividends non-taxable as long as the coverage is not lapsed or surrendered? Instructor Response:…
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Student Question of the Week: Net Present Value Calculation
Student Question from Greg CCourse: Fundamentals of Financial Planning Student Question: Hello! It seems to me that the loan proceeds in Question 3 should be positive cash flow entries in year zero, especially if their repayments are negative CFs in Year 5. Why is this not so? Thanks – Greg Question 3: Donald buys small houses…
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Student Question of the Week: Sources of Gift Tax Liability
Student Question from Ryan FCourse: Estate Planning Student Question: Hi Dan, I have a question about an estate planning concept. I think I’m just reading it wrong, but I want to make sure I have a clear understanding. What is the correct answer to this question, and why? A husband and wife wish to reduce the size…
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