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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…
Vanguard Becomes Newest Founding Sponsor of Center for Financial Planning
CFP® Board Updates The CFP Board has announced Vanguard as the newest Founding Sponsor of CFP Board Center for Financial Planning. Having worked with the CFP Board for the past 6 years, Vanguard has been an invaluable support for the goals of the Center. Corporate sponsors like Vanguard form the backbone of opportunities provided by…
Solving for Annual Equivalent Rate
Course: Fundamentals of Financial PlanningLesson 5: Using the Calculator Student Question: I am confused as to how to get the correct answer for number 4. Jackie invests her bonus at the beginning of this calendar year. If she earns 7% compounded monthly, what is the annual equivalent rate? Round your answer to two decimal places.…
Selecting an Appropriate Trust
Which of the following trusts should Jason establish in his Will to provide for his son Gaven’s living expenses until Gaven reaches age 65 if Gaven is currently a 30-year old unemployed aspiring actor? 2503(b) trust 2503(c) trust Crummey trust Totten trust CLICK TO REVEAL ANSWER Expand A is the answer. The 2503(b) trust would…