CFP® Practice Question

Sam carries an H0-3 policy with $500,000 of coverage and a $2,000 deductible. It would cost $700,000 to rebuild Sam’s house. How much will his insurance company pay on a $200,000 claim related to a fire that started in Sam’s kitchen? $176,571 $178,571 $231,235 $198,000 CLICK TO REVEAL ANSWER Expand A is the answer. Frank…

April’s husband Jay died 5 years ago when their home was worth $600,000. Due to the soft real estate market, April kept the house until the housing market recovered. She finally sold the home this year for $950,000. What is the amount of April’s taxable gain or loss if she bought the home jointly with…

Dan and Karen Burles have 2 children, Coy (age 12, student) and Roger (age 21, student). Dan and Karen own a security equipment sales and installation business, an LLC. Dan and Karen are in the highest income tax bracket. They have a portfolio with $130,000 of municipal bonds (annual income $5,200), $80,000 of corporate bonds…

William found someone to buy his rental property in Maine. Which of the following properties that William would like to purchase as rental property would allow him to complete a like-kind exchange? A golf course rental property in Arizona that William identified 30 days after selling his Maine property. A beach rental house at the…

A client received an annual salary from his employment of $40,000. He was a 50% owner of both a C corporation and an S corporation. The C corporation had net profits of $20,000, and the S corporation had income of $10,000. Neither corporation made a distribution. The client’s revocable trust had income of $5,000 but…

The following information has been provided by a client for income tax purposes: $45,000 salary from an S corporation where the client is a vice-president $3,500 loss from the S corporation $1,500 loss from a 3% interest in a limited partnership $1,200 loss from a 10% interest in Middletown Partnership in which the client does…

Which of the following individuals currently covered by Medicare Part A will not have any of their expenses covered by Medicare Part A? Evan who spent one week in hospice care before losing his battle with cancer. Felicia who was treated by her doctor for Strep throat. Greg who was needed a walker following hip…

Which of the following statements concerning OASDI disability income benefits is correct? Disability is defined as the inability to perform all major duties of the insured’s own occupation. Unless specifically exempted, a waiting period of 12 months must be satisfied. If the disabled worker is also receiving workers compensation benefits, the full OASDI benefit is…

Kathleen transferred her closely held stock to a trust for the benefit of her two daughters. Kathleen will receive a $50,000 distribution each year for the next 10 years from the trust. At the end of the trust term, Kathleen’s daughters will each receive 50% of the remaining trust assets. What type of trust did…

Sam McBuck has an estate of $10 million and would like to leave it to his nephews. Sam assumes he will live for at least 5 more years. The property in Sam’s estate currently includes the following assets: –  An apartment building in downtown New York that Sam owns with three partners, each of whom…