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Power Exercisable with Consent of Another – Include in Estate?

By Dan Madden, CFP®

Course: Estate Planning Lesson 6: Transfer Taxation III Student Question: For “Power exercisable with consent of another”, can you explain  why the assets WOULD be included in John’s estate? Since he has  power to appoint property, wouldn’t that be adverse to Betty and  her ability to enjoy the property? The example is below. EXAMPLE Albert…

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Practice Question: Bond Compound Yield

By Dan Madden, CFP®

An investor bought a bond at par that matures in 15 years. The bond pays an annual coupon of $130 and the reinvestment rate is 9%. What is the realized compound yield of this bond? 11.05% 12.55% 13.00% 14.10% CLICK TO REVEAL ANSWER A is the answer. One would anticipate a realized compound yield rate…

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Are Gifts Taxable as Income?

By Bruce Starks, CPA, CFP®

Course: Income Tax Planning Lesson 5: Gross Income Exclusions Student Question: In the Gifts & Inheritance section of Income Tax Planning and, how come there is not mention of the $15,000 gift tax limit. All it says is that gifts can be excluded from Gross Income. The amount of gifts excluded from taxable income is limited,…

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Standard Deviation

By Dan Madden, CFP®

Big Blue Company stock has an average return of 7% and a standard deviation of 3%. What percentage of the time should an investor in Big Blue Company expect to earn 4% or more? A.34% 68% 84% 95% CLICK TO REVEAL ANSWER C is the answer. Big Blue Company will earn between 4% and 11%,…

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Good to Know: Who Needs Long-Term Care Insurance?

By Bruce Starks, CPA, CFP®

What are the odds you’ll need long-term care? Long-term care is a distinct possibility for millions of Americans. Today’s baby-boomers and their parents are living longer, but longer life expectancies are often accompanied by a need for extended long-term care.  According to the American Society on Aging, 70% of Americans 65 and older will need…

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Corporate Dividend Exclusion

By Dan Madden, CFP®

Course: Investment Planning Lesson 3: Equity Securities Student Question: I don’t quite understand the corporate dividend exclusion. A corporation can exclude 70% of dividends from a different company when they own less than 20%. I don’t understand what happens when they own more than 20%. Also, is there a rule preventing companies from investing in…

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Systematic Risk

By Dan Madden, CFP®

Which of the following statements concerning systematic risk is correct? It can be greatly reduced by owning a diversified portfolio of common stocks. It covers those types of risks that cause all securities to move together in a systematic manner. Business risk, such as a strike at an individual firm, is considered systematic risk. It…

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CFP Board Webinar: Roadmap to the New Code of Ethics and Standards of Conduct

By Dan Madden, CFP®

As we are all aware, the new Code of Ethics and Standards of Conduct become effective on October 1, 2019.  Many CFP® Professionals and those working towards the certification are anxious about what exactly will be changing.  In response, the CFP Board will be hosting a webinar dedicated to distilling the essential information about the…

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In the Money versus Out of the Money

By Bruce Starks, CPA, CFP®

Course: Investment Planning Lesson 3: Equity Securities Student Question: Hi Bruce, In reviewing the tax implications of derivatives, I had a question about the terms in & out of money. Is premium price factored into whether something is in or out of money? Or is it strictly referring to market and strike price? Thanks, Instructor…

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