Questions of the Week

Course: Investment Planning Lesson 4: International Equity Securities Student Question: Is it not true that ADRs eliminate currency risk because transactions are done in USD? Lafe   Instructor Response: Great question Lafe. ADRs do not guarantee exchange rates; they merely exchange foreign currency to US$ as a convenience to ADR investors. Changes in the exchange rate…

Course: Fundamentals of Financial Planning Lesson 2: Economic Concepts and Consumer Protection Laws Student Question: I was really hoping I could get some sort of expanded reasoning on the below statement if possible, please. I am having a hard time wrapping my head around this for some reason. I tried to Google this and look…

Course: Investment Planning Lesson 15: Fundamentals of Derivatives – Futures and Options Student Question: So, if the max loss on a short put is the strike price less the premium, and the breakeven point is also the strike price minus the premium, does that mean the max loss is breaking even? And does the same…

Course: Income Tax Planning Lesson 7: Arriving at Adjusted Gross Income Student Question: Dan, can you help me with the below question? While I know a self-employed person can reduce AGI by 50%, I still couldn’t seem to come up with an answer that matched any of the choices. QUESTION Scott is a self-employed financial…

Course: Estate Planning Lesson 6: Transfer Taxation III Student Question: For “Power exercisable with consent of another”, can you explain  why the assets WOULD be included in John’s estate? Since he has  power to appoint property, wouldn’t that be adverse to Betty and  her ability to enjoy the property? The example is below. EXAMPLE Albert…

Course: Income Tax Planning Lesson 5: Gross Income Exclusions Student Question: In the Gifts & Inheritance section of Income Tax Planning and, how come there is not mention of the $15,000 gift tax limit. All it says is that gifts can be excluded from Gross Income. The amount of gifts excluded from taxable income is limited,…

Course: Investment Planning Lesson 3: Equity Securities Student Question: I don’t quite understand the corporate dividend exclusion. A corporation can exclude 70% of dividends from a different company when they own less than 20%. I don’t understand what happens when they own more than 20%. Also, is there a rule preventing companies from investing in…

Course: Investment Planning Lesson 3: Equity Securities Student Question: Hi Bruce, In reviewing the tax implications of derivatives, I had a question about the terms in & out of money. Is premium price factored into whether something is in or out of money? Or is it strictly referring to market and strike price? Thanks, Instructor…

Course: Insurance Planning Lesson 5: Personal Auto and Umbrella Liability Policies Student Question: Hi If I have liability insurance and I’m driving a vehicle that belongs to a charity (not my own vehicle) and I get into an accident, then my insurance covers this? Sarah Instructor Response: Hi Sarah- Liability coverage generally follows the car,…

Course: Income Tax Planning Lesson 1: Introduction to Taxation Student Question: Hi How is the answer to question #5 (below) $810? Jerry’s taxes were due April 15th. He filed his return in October of the same year and paid his $3,000 two months later. Would Jerry be subject to a penalty? How much? No. Jerry…