Course:  Insurance PlanningLesson 2: Fundamentals of Insurance Student Question: Regarding the Bilateral Contact section, how is an insurance contract not a bilateral contract? If I’m reading correctly, it states that a bilateral contract is one in which both parties have responsibilities.  In an insurance contract, the insurer has to provide insurance and the insured pays the…

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Course:  Fundamentals of Financial PlanningLesson 7: Educational Aid and Funding Calculation Student Question: In Step 5: solving for LUMP SUM needed today… Step 5: Determine funding actually needed Lump sum needed TODAY to fund the full cost of college education. How come we are solving for PV and not PMT? Thanks. Kelly Instructor Response: Hi Kelly, If any…

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Course:  Income Tax PlanningLesson 6: Employer-Sponsored Total Income Exclusions Student Question: Hi- Could you explain the Business Deduction for work related expense in very simple language.  I don’t quite follow whether it’s a deduction or not. Thanks. M Instructor Response: Hello Kyle, If any employee-incurred expenses related to her employer’s business, such as gifts to customers, for example, those…

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Course:  Income Tax PlanningLesson 10: Recognition of Expenses, Losses, and Deductions Student Question: Hi- Can you clarify for me the deductibility of gifts when we’re talking about employees of a business versus self-employed individuals? It seems the rules have changed on these. Thanks. Kyle Instructor Response: Hello Kyle, Thank you for the question.  Things have certainly changed. An employee (W2 employee or statutory employee) can no…

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Course:  Income Tax PlanningLesson 10: Recognition of Expenses, Losses, and Deductions Student Question: Hi- I read that advisory fees are no longer deductible. So, in this question (below), is it deductible because this is treated as a business deduction since Roger is Self-Employed? Alisha Sheridan, A CFP licensee and fee-only financial planner, has assisted Roger Regate, a self-employed physician, in tax and investment…

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Course:  Estate PlanningLesson 12: Valuation and Freeze Techniques to Reduce Estate Tax Liability Student Question: I’m not sure how gains are spread out over the course of the note if these are typically structured “as interest only with a balloon payment at the end”.  Here’s the language from the lesson: Instead of an outright sale, an…

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Course:  Fundamentals of Financial PlanningLesson 5: Using the Calculator Student Question: If it would be at all possible, can you provide me with a practical working explanation of when to use begin mode key and the end mode key in solving these calculations?  Thank you for your attention Eric Instructor Response: Hi Eric, Great question.  Ultimately, we look to the fact pattern of the question,…

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Course:  Income Tax PlanningLesson 15: Property Transactions Student Question: Running with the last example on this page where the sale is between the basis for a gain or a loss, is there ever a situation where factoring in depreciation would result in either a gain or loss? Example Kevin’s home has been declining in value, so he has decided to move and rent…

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Course: Fundamentals of Financial PlanningLesson 5: Using the Calculator Student Question: My question relates to being able to clearly distinguish when the CFP Board Exam will require an annual or other period for the answer. Question 5(b) asks: “What is the rate of return on Investment 2 using daily compounding?” What is the annual rate of return on Investment 2, made 3 years…

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Course: Fundamentals of Financial PlanningLesson 6: Educational Savings Techniques Student Question: Hello Dan, I’m working through some of the educational savings vehicles and I see the term tax-deferred and tax-free. But what does each mean?  Investment grows tax-deferred.  I understand deferred is to pay later, right?  My understanding is that it means one does not pay taxes for investment growth. So why is…

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