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Long-Term Disability Coverage Trap
Good to Know What’s worse than never accumulating wealth? Losing it after you’ve accumulated it! From that perspective, an underinsured long-term disability can zap a client’s wealth faster than the government can spend tax dollars. When, if ever, has your client reviewed their LTD insurance policy? They may be under the mistaken impression that the…
Donating Short-term Appreciated Securities
Course: Income Tax PlanningLesson 15: Property Transactions Student Question: In the lesson, deducting donations of ‘cash’ versus ‘long term appreciated securities’ are differentiated. I’m curious about “short term appreciated securities”. In other words, if I own a stock – bought at $10,000 and it’s worth $50,000 when I donate, but I’ve only owned it 6…
Accelerated Death Benefits
Which of the following individuals would typically qualify for accelerated death benefits under their term life insurance policy? Ida who is expected to die within 7 months from cancer. Jacob who is expected to die within 10 months from AIDS. Kay who is expected to die within 3 months from kidney failure All of the…
This Short Quiz Can Keep You Out of Trouble With CFP Board
CFP® Certificants in the News CFP Board reminds us of the duty to report ethical matters in their July Newsletter article-Focus on Ethics: Duty to Report Information to CFP Board. This brief quiz will test your understanding. True or False, a CFP® professional must report the following to CFP Board within 30 days? Being named…
Loan Impact on Basis in a Modified Endowment Contract
Course: Insurance PlanningLesson 15: Income Taxation of Life Insurance Student Question: Can you help me better understand the difference between policy basis in a normal policy and policy basis on a modified endowment contract. From the Coursework: But for MEC purposes, the basis is increased by any portion of loans that were considered taxable income…
S Corp and C Corp Gross Income Calculation
A client received an annual salary from his employment of $40,000. He was a 50% owner of both a C corporation and an S corporation. The C corporation had net profits of $20,000, and the S corporation had income of $10,000. Neither corporation made a distribution. The client’s revocable trust had income of $5,000 but…
Can Your Clients Avoid Capital Gains Tax?
Good to Know Yes-even clients with a 6-figure income can pay no tax on long-term capital gains. Sound too good to be true? Read on to see how many of your current clients qualify. Long-Term Capital Gain (LTCG) Rates We tend to assume that clients with LTCG and an above-average income will pay at least…
Business Uses of Life and Disability Insurance
Course: Insurance PlanningLesson 17: Business Uses of Life and Disability Insurance Student Question: I have a quick question regarding buy/sell agreement; not clear who would pay the premiums on disability and or life insurance on the principals and the key employees? Instructor Response: Great question. A buy-sell agreement relates to owners of the business while…
Transfer of Interest in Property Held in Joint Tenancy
Gary Chapelle owns a duplex with his brother in joint tenancy with right of survivorship. Gary would like to pass his interest in the property to his son, Bill, and Gary has provided in his will that his interest in the duplex will pass to Bill. Which of the following statements concerning the transfer of…