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Good to Know: Tricks, Traps and Opportunities in the 20% Qualified Business Income Deduction

By Bruce Starks, CPA, CFP®

Today, we conclude our 4-part series with insights into tricks, traps and planning opportunities in the 20% Qualified Business Income Deduction (QBID) under Internal Revenue Code Section 199A, brought to us courtesy of the Tax Cuts and Jobs Act. But first, here’s an uber quick refresher of key concepts from the previous three QBID blogs:…

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When to Use Negative Entries

By Dan Madden, CFP®

Course: Fundamentals of Financial Planning Lesson 5: Using the HP12-C Calculator Student Question: Hi, how do i know when to use CHS in the calculator, I’m a little unclear about  that. Instructor Response: Hi Julio- Good to hear from you.  Hope all is going well thus far. Yeah, this can certainly be confusing.  There are some…

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Insurance Contracts

By Dan Madden, CFP®

Which of the following statements concerning insurance contracts is NOT correct? An insurance contract is bilateral because both the insurer and the insured make legally enforceable promises. In an insurance contract, the insurer has made legally enforceable promises for which it can be sued for breach of contract. Because property insurance contracts are personal, it…

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Determining Margin Calls

By Dan Madden, CFP®

Course: Investment Planning Lesson 3: Equity Securities Student Question: I’m having trouble following the math on the example (shown below) at the bottom of the page. Could you please walk through the calculations? I understand how the initial margin with cash amount is calculated, but it gets a bit fuzzy for me after that. Example…

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529 Plan – Lump Sum Educational Funding

By Dan Madden, CFP®

Nancy recently received $250,000 from her mother’s life insurance policy. She wants to use a portion of the money to fund her son’s college education that currently costs $10,000 a year and she anticipates an 8% yearly increase. Nancy can earn 7% on her investments and the overall inflation rate is 3%. Nancy’s son will…

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Good to Know: Calculating The 20% Qualified Business Income Deduction – The Basics

By Bruce Starks, CPA, CFP®

In our most recent blog on this topic – Part 2 of a 4-part series – we explained how Congress denied or restricted the 20% Qualified Business Income (QBI) deduction to owners of Specified Trades or Businesses (SSTBs) that earned more than an indexed amount. Today, in Part 3 of our 4-part series, we will…

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Alimony Recapture

By Bruce Starks, CPA, CFP®

Course: Income Tax Planning Lesson 4: Calculating Total Income Student Question: So, if I’m understanding this correctly, alimony recapture should no longer be an issue in 2019 and beyond due to alimony no longer being deductible, correct? Instructor Response: Hi Lafe, Good question. Alimony paid under a divorce decree executed before 1/1/19 will continue to…

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CFP® Practice Question: Mortgage Refinance

By Dan Madden, CFP®

Brandon refinanced his home mortgage to a 30-year fixed mortgage with biweekly payments. How much is each payment if he owed $250,000 at the time of the refinance and the interest rate is 5%? $619 $671 $1,336 $1,342 CLICK TO REVEAL ANSWER A is the answer. Brandon pays his mortgage every two weeks, which means…

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Beta as a Measure of Risk

By Bruce Starks, CPA, CFP®

Course: Investment Planning Lesson 1: Key Principles of Investing Student Question: Hi Dan- I don’t understand why this statement is true: “Beta is a measure of systematic, non-diversifiable risk.” I thought Beta was a measure ofrelative volatility? This is from a Board-Related Question in “Measures of Investment Risk” in “Principles of Investing”. Craig Instructor Response:…

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