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Student Question of the Week: 529 Nonqualified Withdrawal Penalty

By Dan Madden, CFP®

Student Question from Andrew S.Course: Fundamentals of Financial Planning Student Question: Under “penalties and restrictions for nonqual WDs from 529 plans”, what exactly is “this additional tax” mentioned in the third paragraph? Is it talking about the penalty or the penalty and income tax? Thanks. Andrew Instructor Response: Hi Andrew! This is a key topic…

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Student Question of the Week: Interest Rate Sensitive Industries

By Dan Madden, CFP®

Student Question from Grace R.Course: Investment Planning Student Question: Hi Dan! In the fundamental equity analysis discussion regarding sectors, it states that the Utilities sector is considered interest rate sensitive. Would you mind explaining how utilities are interest rate sensitive? Instructor Response: Hi Grace! Great to hear from you!  And a very good question here.…

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CFP® Practice Question: Differences Between Preferred Stock and Long-Term Bonds

By Keir

Which of the following statements correctly describe differences between preferred stock and long-term bonds? (1)   Preferred stock is more risky for the investor than long-term bonds issued by the same company. (2)   The market price of preferred stock fluctuates more than the market price of long-term bonds. (3)   Long-term bonds usually have a longer maturity…

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Student Question of the Week: Maximum Bodily Injury Coverage

By Dan Madden, CFP®

Student Question from Safiya J.Course: Insurance Planning Student Question: Hi Dan, I hope you are doing well! I have a question about Question #8 (SHOWN BELOW) – what does the $300,000 mean in the coverage amount? I thought that was the maximum bodily injury coverage, but I must not be understanding that because I’m not…

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Why Become a CFP® Certificant?

By Bruce Starks, CPA, CFP®

The Financial Planning profession is expected to grow dramatically in the near term according to a recent CFP Board newsletter. The Board expects the need for personal financial advisors to shoot up by some 41% in the near term and continue leading the average occupation growth through 2020. If you are currently practicing as a…

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Student Question of the Week: The Applicable Exclusion Amount

By Bruce Starks, CPA, CFP®

Student Question from Andy MCourse: Estate Tax Planning Student Question: A correct response to a question in the textbook reads, “If an individual does not use the Unified Credit, it cannot be TRANSFERRED to others for their use.” Although the 2014 Unified Credit of $2,081,800 is not the same as the $5,340,000 Applicable Exclusion Amount,…

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Student Question of the Week: Buy-Sell Agreements

By Dan Madden, CFP®

Student Question from Holly SCourse: Income Tax Planning Student Question: Hi Dan. On this page, step 6 of the Stock Redemption steps seems incorrect. My understanding from a prior lesson was that the remaining owner % would be unchanged (stay at 33% in this example) since the corporation bought the deceased owner’s shares. What am…

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Student Question of the Week: Emergency Fund

By Dan Madden, CFP®

Student Question from Sophie LCourse: Fundamentals of Financial Planning Student Question: Hi Dan, The adequate amount for an Emergency Fund is 3 months for married clients who both have substantial and reliable income. What is the generally accepted level, if any, for “substantial income”? In Question 3, I considered that $60,000 per spouse was not…

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Bipartisan Solutions for America’s Broken Tax Code

By Bruce Starks, CPA, CFP®

Congressman Dave Camp (R-MI), Chairman of the powerful Ways and Means Committee, recently released draft legislation dubbed The Tax Reform Act of 2014 (TRA 2014). TRA 2014 aims at job growth, a simpler and fairer tax code, and putting more hard-earned income back into the hands of taxpayers.  Laudable goals all, but the bigger news…

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