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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…
CFP® Practice Question: Mortgage Refinance
Brandon refinanced his home mortgage to a 30-year fixed mortgage with biweekly payments. How much is each payment if he owed $250,000 at the time of the refinance and the interest rate is 5%? $619 $671 $1,336 $1,342 CLICK TO REVEAL ANSWER A is the answer. Brandon pays his mortgage every two weeks, which means…
Beta as a Measure of Risk
Course: Investment Planning Lesson 1: Key Principles of Investing Student Question: Hi Dan- I don’t understand why this statement is true: “Beta is a measure of systematic, non-diversifiable risk.” I thought Beta was a measure ofrelative volatility? This is from a Board-Related Question in “Measures of Investment Risk” in “Principles of Investing”. Craig Instructor Response:…
CFP® Practice Question: Net Worth Increase
During the year, Michelle paid down her car loan by $5,000 and her school loan by $3,000. She also contributed $5,000 cash from her checking account to an IRA. Michelle’s investment account grew by $10,000 during the year. How much did Michelle’s net worth increase for the year? $8,000 $13,000 $18,000 $23,000 CLICK TO REVEAL…
The 20% Qualified Business Income Deduction – Congress Denies the Deduction to Certain Successful Business Owners
In Part 1 of this 4-part series, we introduced the extraordinary power of the Qualified Business Income (QBI) deduction to slash your business owner client’s taxes by as much as 20%. We ended Part 1 with a heads-up that restrictions apply. We’ll take a close look at a key restriction in this article – Part…
Saving Taxes for Shareholders – Buy/Sell Agreements: Stock Redemption vs Cross Purchase
Course: Insurance Planning Lesson: 17 – Business Uses of Life and Disability Insurance Student Question: Under the Stock Redemption Method – how is basis treated specifically to stock remaining outstanding (not Treasury stock) and how does this compare to the Cross Purchase Method? Is basis treated the same – do both methods provide the same…
CFP® Practice Question: Bankruptcy Discharges
Chuck lost his job last year when his company moved their factory overseas. Chuck has been unable to find another job and had to file for a Chapter 7 bankruptcy. Which of the following debts can be discharged in the bankruptcy? $10,000 of rent he owes his landlord $20,000 of taxes he owes the IRS…
Identifying Skip and Non-Skip persons.
Course: Estate Planning Lesson 7: Transfer Taxation IV – Generation Skipping Transfers Student Question: Wouldn’t Ellen be a non-skip person since Jane is deceased and she bumps up the ladder one step to be just one generation behind?? (See question below in which Ellen is identified as a skip person.) Question 1: The following chart shows the…
CFP® Practice Question: Investment Advisors Act of 1940
Which of the following individuals need to register with the SEC under the Investment Advisers Act of 1940? Adam, who retired last year from a big brokerage house but he recently started providing services to 12 clients who live in his neighborhood that he met while out golfing. Belinda, who writes weekly investment articles for…