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Social Security Retirement Benefits
Course: Insurance PlanningLesson 10: Social Security Student Question: This question (below) doesn’t quite make sense to me. Could you clarify why the correct answer is D? Robin Elizabeth qualifies for a retirement benefit of $250 and a spouse’s benefit of $400. At her full retirement age, she will receive which of the following? Instructor Response: Great…
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Tax Saving Strategies
Dan and Karen Burles have 2 children, Coy (age 12, student) and Roger (age 21, student). Dan and Karen own a security equipment sales and installation business, an LLC. Dan and Karen are in the highest income tax bracket. They have a portfolio with $130,000 of municipal bonds (annual income $5,200), $80,000 of corporate bonds…
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What You Should Know About CFP Board Discipline
CFP® Certificants in the News CFP Board publishes disciplinary actions that include public censure, suspension, and even permanent revocation of the right to use the CFP® mark. We’ll identify two recent disciplinary actions taken by CFP Board and then make observations. Public Censure Paul, a CFP® certificant from New York, “entered into a Letter of…
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No Additional Cost Services Exclusion
Course: Income Tax PlanningLesson 6: Employer-Sponsored Total Income Exclusions Student Question: For “No Additional Cost Services” provided by an employer, which are excluded from employee income, there is the requirement that no significant costs are incurred. How is “significant” cost determined? Significant sounds subjective. Is there a general rule for determining what is considered significant?…
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Possible Penalties on Tax Return
Terry received a notice from the IRS correcting a math error on his individual income tax return. As a result, Terry owes $1,000 in taxes, penalties and interest. Which of the following is the most likely penalty or interest assessed against Terry? Understatement penalty Failure to file penalty Fraud penalty Underpayment penalty CLICK TO REVEAL…
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CFP Board Releases Book on CFP History
CFP® Board Updates To commemorate the 50th anniversary of CFP® certification, the CFP Board has published The First 50 Years of CFP® Certification: The Standard for Financial Planning, written by Michelle Kruger, Ph.D., CFP®. Filled with memories and forward-looking insights from individuals who helped lead the CFP® certification’s development over the years. To purchase the book,…
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Annual Return and Compounding
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…
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Owner of a Grantor Trust
In which of the following situations would the grantor of a trust not be considered the owner? The grantor has a reversionary interest in the trust, of which the grantor’s son is the sole beneficiary, but the grantor cannot exercise this power until eight years after transfer of property to the trust. The grantor retains…
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Social Security Bankruptcy—Fear or Fact?
Good to Know Social Security consists of two major benefit programs-disability and retirement/survivorship. We’ll address these programs in just a moment, but first, the author will contrast the crucial difference between Social Security “solvency” and “bankruptcy.” Solvency is the ability to pay 100% of benefits. Bankruptcy is the inability to make any significant benefit payments.…
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