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Student Question of the Week: Retirement Planning
Student Question from: Natalia G.Course: Retirement Planning – Characteristics of ESOPs Student Question: Quick question – under “Recognition deferral” paragraph (below in bold), it is stated that ESOP plan participants can “defer recognition of a portion of their gains when employer securities are distributed at retirement. Participants are generally eligible to delay recognition of gain…
CFP® Practice Question of the Week: Mortgage
A CFP® professional meets with two new clients who would like advice about their mortgage. In the review, the CFP® professional finds that their essential expenses exceed their income. Mortgage rates have come down significantly and they intend to refinance their current 30-year mortgage to a 15-year mortgage. Their payments will be higher than their current payment.…
CFP® Practice Question of the Week: Retirement
During an annual review with Anna and Lawrence Harvey, a CFP® professional discusses their retirement objectives. Because of weak market performance over the past few years, it appears that they are no longer on track for retirement. How should the CFP® professional best direct discussion of this situation? Tell the Harveys that they must increase their monthly…
Winners and Losers in the Fiscal Cliff Deal
“Some gotta win, some gotta lose” is more than a line in an Elvis Presley song – it’s the government’s rendition of the Fiscal Cliff Deal. What exactly is the fiscal cliff? Is the fiscal cliff sheer media hype or a real crisis? The fiscal cliff refers to a perfect storm of tax increases and…
Student Question of the Week: Income Tax
Student Question from: Amanda S.Course: Income Tax – Code Section 179 Student Question: Hi there! Can you explain more about the second bullet in the blue box (shown below) regarding the $560k excess and how it works? I think I understand the first scenario in the example: $560k – $139k allowed for immediate expense =…
CFP® Practice Question of the Week: Sensitive Information
A CFP® professional observes that John and Barbara are constantly living a few steps ahead of their means. They assure the CFP® professional that they will reign in their spending, but their credit card balances continue to rise. All of the following are acceptable strategies EXCEPT: Terminate the relationship with the clients Document their inability to take…
Student Question of the Week: Income Tax
Student Question from: John C.Course: Income Tax – Childcare Credit Student Question: I have a quick question about review exercise number 3 (below). It indicates that $2,100 would be the correct answer. I thought $6,000 was the maximum for two children? Are you perhaps asking for the minimum instead, or should we have assumed some…
CFP® Practice Question of the Week: Tax Liability
Kevin’s non-qualified stock options are as follows: 2,000 shares: strike price $34 5,000 shares: strike price $30 Current stock price: $65 Kevin’s tax bracket: 42% (federal and state) Kevin has decided to exercise the above stock option awards, which will expire in the next 2 years. Assuming he exercises them today, what is his tax…
Student Question of the Week: Income Tax – Gross Income Calculation
Student Question from: John C.Course: Income Tax – Gross Income Calculation Student Question: Hi. I just wanted to verify that the employee premium in the example below is not prorated between the “tax-free” and taxable insurance coverage. And, if it’s not, why? Here is my calculation: 5 x 4.5% + 7 *0.5 % = 26%…