Blog
Crummey Powers
Course: Insurance PlanningLesson 16: The Irrevocable Life Insurance Trust Student Question: Must Crummey Powers always be in effect to apply the annual gift tax exclusion in order to transfer to an irrevocable trust? Or is it the case that as long as it was done once, will all transfers be eligible for the annual gift tax exclusion? Thanks,…
Basis on Sale of Gifted Stock
Tom gave his son, David, a birthday present of Big M stock with a fair market value of $50,000. Tom paid gift tax of $11,700 as Tom had previously given David earlier this year a cash gift equal to the annual gift tax exclusion amount. Tom’s adjusted basis in the stock on the date of…
IRS Riddle: How Do You Save $435 or More in Tax Penalty With 55 Cents?
Good to Know The IRS recognizes that a taxpayer may not have received all of the tax information needed to file a tax return by the due date, especially if there are complex issues to resolve. Individual tax returns for 2020 are due by April 15, 2021. By exception, winter storm victims in Louisiana and…
Chapter 13 Bankruptcy Means Test
Course: Estate PlanningLesson 13: Case Study Online Student Question: I am a little confused how one set amount – $100 – is the threshold for means testing a bankruptcy petitioner when the amount of debt a borrower may owe can vary by large amounts. It would seem the amount left over (income minus allowable expenses)…
Defined Benefit Plan Reversionary Tax
Lucky Star Corp has been extremely lucky with their defined benefit plan as it is currently overfunded. Management decided to terminate the plan while they are overfunded and share the excess with the employees. What amount of reversion tax will Lucky Star Corp have to pay upon termination? 0% 10% 20% 50% CLICK TO REVEAL…
CFP Board Releases New Compliance Resources
CFP® BOARD UPDATES The CFP Board has developed and made available a series of resources that will help CFP® Professionals navigate the sometimes choppy waters of CFP Board compliance. These guidance resources help CFP® Professionals understand and comply with the Code of Ethics and Standards of Conduct. These resources include: An FAQ to help locate…
Custodial Accounts and Gifting
Course: Estate PlanningLesson 13: Case Study Online Student Question: If a check given by Mary to Peter was deposited into a custodial account where Mary was the custodian, doesn’t that mean that Mary didn’t give up ALL control, so it’s not a completed gift? Thanks, Megan Instructor Response: Hi Megan, That’s a great way to…
Actuarial Assumptions in Defined Benefit Pension Plans
Which of the following statements concerning the various actuarial assumptions used in estimating an employer’s contributions to a Defined Benefit Pension Plan is correct? The higher the assumed rate of investment income, the larger the employer’s assumed contribution rate. The higher the employee turnover or termination rate, the larger should be the employer’s assumed contribution…
IRS Discount “Coupons” – Flexible Spending Arrangements
Good to Know If your doctor emailed a 35% discount coupon to your inbox, would you take the free money? Your clients that are under-utilizing Flexible Spending Arrangements to pay medical and child-care costs may be throwing away free money. How? Contributions to the Flexible Spending Arrangements discussed herein are not subject to income, Social…