Blog

Conversion of Personal Use Property

By Bruce Starks, CPA, CFP®

Course:  Income Tax PlanningLesson 15: Property Transactions Student Question: Running with the last example on this page where the sale is between the basis for a gain or a loss, is there ever a situation where factoring in depreciation would result in either a gain or loss? Example Kevin’s home has been declining in value, so he has decided to move and rent…

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ADP Rules and 401(k)

By Dan Madden, CFP®

KC Corporation offers a 401(k) Plan. Under the ADP rules, what is the maximum salary percentage the highly compensated employees can contribute if the non-highly compensated employees contribute 6% of their salary? 6% 8% 10% 12% CLICK TO REVEAL ANSWER Expand B is the answer. Since the non-highly compensated employees contributed between 2% and 8%,…

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Good to Know: Social Security: Another COVID-19 Casualty?

By Bruce Starks, CPA, CFP®

Good to Know What do you think of first when someone says, “victim of COVID-19?” Most of us think of medically vulnerable fellow citizens or business failures. But what about Social Security’s health? Before answering that question, let’s recognize a few fundamental forces behind Social Security’s financial challenges: Social Security become law in 1935 and,…

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Annual Return and Compounding

By Dan Madden, CFP®

Course: Fundamentals of Financial PlanningLesson 5: Using the Calculator Student Question: My question relates to being able to clearly distinguish when the CFP Board Exam will require an annual or other period for the answer. Question 5(b) asks: “What is the rate of return on Investment 2 using daily compounding?” What is the annual rate of return on Investment 2, made 3 years…

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ESOPs and Stock Bonus Plans

By Dan Madden, CFP®

Which of the following statements concerning the characteristics of ESOPs and stock bonus plans is correct? The employer is required to make a specific annual contribution. Non-vested account balances of terminated participants are usually reallocated to the remaining participants. The employer assumes the risk associated with the investment of trust fund assets. The increased investment…

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FAQs – Remaining CFP Board Exams in 2020

By Bruce Starks, CPA, CFP®

CFP Board Exam FAQs The questions surrounding CFP Board’s response to COVID-19 number in the dozens if not hundreds.  In this blog, we’ll identify key FAQs on the subject. Is there an additional fee to register for the September Exam? Candidates who were registered to take the exam in July will be able to reschedule…

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Tax-Deferred versus Tax-Free

By Bruce Starks, CPA, CFP®

Course: Fundamentals of Financial PlanningLesson 6: Educational Savings Techniques Student Question: Hello Dan, I’m working through some of the educational savings vehicles and I see the term tax-deferred and tax-free. But what does each mean?  Investment grows tax-deferred.  I understand deferred is to pay later, right?  My understanding is that it means one does not pay taxes for investment growth. So why is…

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Defined Benefit Plan Reversion Tax

By Dan Madden, CFP®

Lucky Star Corp has been extremely lucky with their defined benefit plan as it is currently overfunded. Management decided to terminate the plan while they are overfunded and share the excess with the employees. What amount of reversion tax will Lucky Star Corp have to pay upon termination? 0% 10% 20% 50% CLICK TO REVEAL…

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SEC Regulation Best Interest – Who is Protected and When?

By Bruce Starks, CPA, CFP®

Good to Know The Security and Exchange Commission’s Regulation Best Interest (Reg BI) is aimed squarely at protecting the best interests of retail investors. A common issue that arises is exactly when Reg BI applies. The short answer is that Reg BI applies when a retail customer receives and subsequently uses a recommendation from a…

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