Blog
Ownership of Property in a Trust
Course: Estate PlanningLesson 3: Understanding Trusts and Trust Documents Student Question: Hello- Perhaps a slightly mundane question, but here we go: It had been my understanding that property in a trust was held and owned by the trust itself, as a separate legal entity. However, several times in this course there has been reference to the trustee having…
Read More
Modified Endowment Contract Loan
Alan paid $70,000 for a MEC policy when he was 50 years old. What are the income tax ramifications if he takes a $15,000 loan 3 years after purchasing the policy? The policy was worth $78,000 at the time of the loan. Alan would not have to report any taxable income or penalty. Alan would…
Read More
What Do You Need to Know to Pass the CFP Board Exam?
Good to Know The question posed in this article’s title can be answered by applying the timeless wisdom of a Chinese general who died over 2,500 years ago. “If you know the enemy and know yourself, you need not fear the result of a hundred battles.” -Sun Szu, 544-496 BC While the CFP Board exam…
Read More
Passing Property Via Will
Course: Investment PlanningLesson 14: Evaluation Portfolio Performance Student Question: Hello- I’m a little confused about the example (below) discussing an heirloom of only sentimental value. Why would this be titled at all for a will, especially since an earlier lecture said items of no value would pass through will as the situation does not involve…
Read More
Gift and Estate Tax Basic Exclusion Amount vs. Generation-Skipping Transfer Tax Exemption Amount
Perry made a $12,060,000 taxable gift to his son Ross on 1/1/2022 and a taxable gift of $12,060,000 to Ross’s daughter Marilyn on April 30, 2022. Perry made no gifts or generation-skipping transfers before 2022. Note the following: The Basic Exclusion Amount (BEA) in 2022 is $12,060,000, The GST Exemption is the same dollar amount…
Read More
Pro Bono Opportunity: Help Prevent Financial Elder Abuse
CFP® Certificants in the News According to nolo.com, “Financial fraud is the fastest-growing form of elder abuse. Broadly defined, financial elder abuse is when someone illegally or improperly uses a vulnerable senior’s money or other property. Most states now have laws that make elder financial abuse a crime and provide ways to help the senior…
Read More
Boot: Recognized Gain in Like-Kind Exchange
Course: Income Tax PlanningLesson 16: Property Transactions Without Gain or Loss Recognition Student Question: Hello- Melvin gave $40,000 in cash plus real property with an adjusted basis of $30,000 (fair market value of $100,000) and received real property with a fair market value (FMV) of $150,000. In this transaction, Melvin would have no recognized gain,…
Read More
Defining a Stock Spread
Which of the following combinations correctly describes a spread? A combination of a short sale and a purchase of a call for the same stock A combination of buying and selling calls on the same stock with different expiration dates and exercise prices A combination of a put and a call on the same stock…
Read More
Investment Risk on the CFP Board Exam: Part IV
Good to Know This is the final article of our four-article series on investment risk for the CFP Board exam. Here’s a reminder of the risk concepts we’ve covered so far in the series: Part I: When to trust the “mean” return, Part II: Using standard deviation to manage investment risk, and Part III: Skewness-Do…
Read More