Blog

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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CFP® Practice Question: Net Worth Increase

By Dan Madden, CFP®

During the year, Michelle paid down her car loan by $5,000 and her school loan by $3,000. She also contributed $5,000 cash from her checking account to an IRA. Michelle’s investment account grew by $10,000 during the year. How much did Michelle’s net worth increase for the year? $8,000 $13,000 $18,000 $23,000 CLICK TO REVEAL…

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The 20% Qualified Business Income Deduction – Congress Denies the Deduction to Certain Successful Business Owners

By Bruce Starks, CPA, CFP®

In Part 1 of this 4-part series, we introduced the extraordinary power of the Qualified Business Income (QBI) deduction to slash your business owner client’s taxes by as much as 20%. We ended Part 1 with a heads-up that restrictions apply. We’ll take a close look at a key restriction in this article – Part…

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Saving Taxes for Shareholders – Buy/Sell Agreements: Stock Redemption vs Cross Purchase

By Bruce Starks, CPA, CFP®

Course: Insurance Planning Lesson: 17 – Business Uses of Life and Disability Insurance Student Question: Under the Stock Redemption Method – how is basis treated specifically to stock remaining outstanding (not Treasury stock) and how does this compare to the Cross Purchase Method? Is basis treated the same – do both methods provide the same…

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CFP® Practice Question: Bankruptcy Discharges

By Dan Madden, CFP®

Chuck lost his job last year when his company moved their factory overseas. Chuck has been unable to find another job and had to file for a Chapter 7 bankruptcy. Which of the following debts can be discharged in the bankruptcy? $10,000 of rent he owes his landlord $20,000 of taxes he owes the IRS…

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Identifying Skip and Non-Skip persons.

By Dan Madden, CFP®

Course: Estate Planning Lesson 7: Transfer Taxation IV – Generation Skipping Transfers Student Question: Wouldn’t Ellen be a non-skip person since Jane is deceased and she bumps up the ladder one step to be just one generation behind?? (See question below in which Ellen is identified as a skip person.) Question 1: The following chart shows the…

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CFP® Practice Question: Investment Advisors Act of 1940

By Dan Madden, CFP®

Which of the following individuals need to register with the SEC under the Investment Advisers Act of 1940? Adam, who retired last year from a big brokerage house but he recently started providing services to 12 clients who live in his neighborhood that he met while out golfing. Belinda, who writes weekly investment articles for…

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Good to Know: Claiming Dependents – Waste of Time or Great Way to Save on Income Taxes?

By Bruce Starks, CPA, CFP®

We lost the deduction for personal and dependency exemptions starting in 2018 under the Tax Cuts and Job Act. With the loss of the deduction, many taxpayers rightly ask, “Should I even bother documenting and claiming my dependents on my tax return?” That a reasonable question and the answer is… YES for many taxpayers. Claiming…

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Mortgage-Backed Bonds and Mortgage Pools

By Bruce Starks, CPA, CFP®

Student Question: Course: Investment Planning Lesson 9: Fixed Income Securities I don’t clearly understand how money is made in the mortgage-backed bond process.  What are mortgage pools? Does the investor make money from the interest of the pooled mortgages? What if the mortgages default? Thanks, Kevin Instructor Response: Great question.  Here’s a quick example: John Doe…

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