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Contingent Business Interruption versus Extra Expense Insurance

By Bruce Starks, CPA, CFP®

Course: Insurance PlanningLesson 6: Commercial Property and Liability Insurance Student Question: Can you please provide an example of contingent business interruption and extra expense insurance? Thanks, Laura Instructor Response: Hi Laura, Good question.  Here’s how contingent business interruption insurance might apply.  You own a nationwide chain of jewelry stores that specialize in gold/palladium alloys.  Your…

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Power of Attorney over Financial Affairs

By Dan Madden, CFP®

Laura is concerned she will develop Alzheimer’s disease later in life similar to her mother. Which of the following documents should Laura execute to make sure her son is able to handle her financial affairs in the event she does develop Alzheimer’s disease? Durable springing power of attorney Nondurable springing power of attorney Durable nonspringing…

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Reprieve from the Warden: Individual Federal Income Tax Return Due Date Extended

By Bruce Starks, CPA, CFP®

Good to Know “WASHINGTON – The Treasury Department and Internal Revenue Service announced today that the federal income tax filing due date for individuals [including sole proprietors and owners of certain single-member LLCs] for the 2020 tax year will be automatically extended from April 15, 2021, to May 17, 2021.” “Individual taxpayers can also postpone…

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Maximum Family Benefit

By Bruce Starks, CPA, CFP®

Course: Insurance PlanningLesson 10: Social Security Student Question: Does the maximum family benefit apply to a husband and wife that are both fully insured if the combined total between the two exceeds the maximum family limit?   If I understand correctly, the maximum family limit only applies if there are beneficiaries within the family receiving benefits…

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S Corp and C Corp Gross Income Calculation

By Dan Madden, CFP®

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…

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CFP Board Relaunches “LetsMakeAPlan”

By Bruce Starks, CPA, CFP®

CFP® Certificants in the News Relying on extensive consumer research and user testing, Certified Financial Planner Board of Standards, Inc. (CFP Board) recently launched its redesigned and updated consumer-facing website, LetsMakeAPlan.org (LMAP). The refreshed website includes updated content and a modernized interface with a mobile-friendly design to improve user experience, educate consumers on financial planning concepts and…

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Crummey Powers

By Bruce Starks, CPA, CFP®

Course: Insurance PlanningLesson 16: The Irrevocable Life Insurance Trust Student Question: Must Crummey Powers always be in effect to apply the annual gift tax exclusion in order to transfer to an irrevocable trust? Or is it the case that as long as it was done once, will all transfers be eligible for the annual gift tax exclusion? Thanks,…

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Basis on Sale of Gifted Stock

By Dan Madden, CFP®

Tom gave his son, David, a birthday present of Big M stock with a fair market value of $50,000. Tom paid gift tax of $11,700 as Tom had previously given David earlier this year a cash gift equal to the annual gift tax exclusion amount. Tom’s adjusted basis in the stock on the date of…

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IRS Riddle: How Do You Save $435 or More in Tax Penalty With 55 Cents?

By Bruce Starks, CPA, CFP®

Good to Know The IRS recognizes that a taxpayer may not have received all of the tax information needed to file a tax return by the due date, especially if there are complex issues to resolve. Individual tax returns for 2020 are due by April 15, 2021. By exception, winter storm victims in Louisiana and…

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