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5 Habits of Successful CFP Exam Takers
CFP® Certificants in the News This blog is dedicated to CFP® Candidates, especially those planning to take the CFP Board Exam soon. What better place to begin planning than planning to pass the CFP Board Exam? By the way, hope is not a plan. Hope is a wonderful quality but we need a specific, sequential…
Unused Premiums in Term Insurance
Course: Insurance PlanningLesson 12: Types of Life Insurance Student Question: Could you help clarify the term “unused premiums” as it relates to term life insurance? I guess I don’t see how you could have a premium not used in term life. Thanks, Michael Instructor Response: Hi Michael, Assume you pay $6,000 in annual prepaid premiums…
Basis of Inherited Property
Bill Farmer bought 1,000 acres of farmland for $300,000. When his oldest son married, Bill gave him 400 acres for a farm. When Bill died this year, the remaining 600 acres were divided in Bill’s will between his two younger sons. The 600 acres had a fair market value at Bill’s death of $600,000. Which…
Last Minute Tax Deductions for 2020
Good to Know Taxpayers may reduce their 2020 taxable income by tens of thousands of dollars by contributing to tax-deductible IRAs, 401(k)s, and other accounts by May 17, 2021. Traditional Deductible IRA Contributions Taxpayers who are unaware of this opportunity or miss the usual April 15, 2021, deadline may contribute to an IRA for 2020…
Percentage of Completion Method
Course: Income Tax PlanningLesson 10: Recognition of Expenses, Losses, and Deductions Student Question: Question 5 (below) did not make sense to me. I started out by breaking down by year: 400,000 / 2,100,000 * 3,000,000 and so forth but did not arrive at the correct answer. So, then I tried adding up 3 year: 400 +…
Owner of a Grantor Trust
In which of the following situations would the grantor of a trust not be considered the owner? The grantor has a reversionary interest in the trust, of which the grantor’s son is the sole beneficiary, but the grantor cannot exercise this power until eight years after transfer of property to the trust. The grantor retains…
CFP Board Launches Spring Awareness Campaign
CFP® BOARD UPDATES The CFP Board has launched its Spring 2021 Public Awareness Campaign. The focus of the campaign is to raise awareness of the value of the CFP® Certification and the peace of mind that comes from having a CFP® Professional help prepare a financial plan. The Board has been running awareness campaigns since…
Contingent Business Interruption versus Extra Expense Insurance
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…
Power of Attorney over Financial Affairs
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…