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Net Unrealized Appreciation
Course: Retirement PlanningLesson 7: Income Distribution Planning for Qualified Plans Student Question: Regarding net unrealized appreciation, the value of company shares at the time of distribution would be considered the client’s cost basis in that any earnings in excess of that amount could be subject to short-term cap gains if sold within a year of…
Section 179 Expensing
Which of the following expenses can Vicki expense entirely under Section 179 expense assuming she meets all other requirements? $10,000 for a new coat of paint in the lobby and office. $20,000 for a new roof on the warehouse $30,000 for vacation $25,000 for new computers CLICK TO REVEAL ANSWER Expand D is the answer.…
The 2021 Crystal Ball: Year-End Tax Strategies for Individuals
Good to Know Year-end tax planning for 2021 depends in large part on proposed legislation, such as the “Build Back Better Act.” Without a reliable crystal ball, the ultimate passage of the Act and other legislation is hard to handicap. However, the passage of the Act could hit many upper-middle-income and high-income taxpayers squarely in…
Qualified Plans – Parties in Interest
Course: Retirement PlanningLesson 6: Matching Business Owner Needs to the Right Qualified Plan Student Question: How is “connection to the plan” defined in regards to a “party in interest” when talking about qualified plans? Would a plan participant count as someone with a connection to the plan? From the Coursework: A party in interest is…
Life Insurance in the Gross Estate
Which of the following assets would be included in Martin’s gross estate? Life insurance on Martin’s life purchased one year before he died by the trustee of Martin’s irrevocable life insurance trust. Life insurance on Martin’s life purchased by Martin’s wife two years before he died. Life insurance on Martin’s life purchased three years before…
HOW TO REDUCE CYBER RISKS IN CLIENT ACCOUNTS
CFP® Certificants in the News CFP Board’s recent background and disclosure review project resulted in a higher-than-expected number of reviews, investigations, and disciplinary actions taken against CFP® certificants. Solely in the author’s opinion, the scope and depth of the disclosure violations, when coupled with the CFP Board’s strategic goal of utmost public trust, may have…
Understanding the Relationship Between Coupon Rates and Duration
Course: Investment PlanningLesson 9: Fixed Income Securities Student Question: There is a question regarding duration that I continue to struggle with.Which of the following are true: 1 – Lower coupon bonds are more sensitive to interest rates than high coupon bonds.2 – There is inverse relationship between bond prices and change in interest rates.3 – There is a…
Appropriate Valuation Method
Sam McBuck has an estate of $10 million and would like to leave it to his nephews. Sam assumes he will live for at least 5 more years. The property in Sam’s estate currently includes the following assets: An apartment building in downtown New York that Sam owns with three partners, each of whom wants…
Is the Stretch IRA Dead for Everyone?
Good to Know The answer posed by the blog title is no. That’s good news. The bad news is that only a short list of beneficiaries is eligible for stretch IRA treatment at the death of the original IRA owner. Only an eligible designated beneficiary can stretch distributions from Traditional IRAs where the original owner…