Student Question

Course:  Estate PlanningLesson 7: Transfer Taxation IV – Generation-Skipping Transfers Student Question: Regarding the example below, would the death of the father Stephen not move Andrew one step up, making him only one generation below Mrs. Jones? Would this not remove the Generation-Skipping Transfer Tax? EXAMPLE: Upon her death, Mrs. Jones left her estate in trust to provide income for life to…

Course:  Retirement PlanningLesson 7: Income Distribution Planning for Qualified Plans Student Question: Regarding the after-tax example: Wouldn’t the full $10,000 hardship come first from the $80,000 that was contributed pre-1987? Don’t you exhaust the $80,000 before concerning yourself with the exclusion ratio? From the Course: Once the pre-1987 after-tax contributions have been withdrawn, or if none existed, all other after-tax contributions are withdrawn on…

Course:  Insurance PlanningLesson 4: Homeowners Insurance Student Question: Is there a definition for personal injury as noted under the personal injury endorsement? FROM LESSON: The personal injury endorsement expands the Section II liability coverage to include “personal injury” and “bodily harm, sickness or disease.” How does this vary from bodily injury that is covered without an endorsement? Thanks. Matthew Instructor…

Course:  Income Tax PlanningLesson 14: Tax Credits, Payments, and Forms Student Question: Is the statement correct on this page that “The dependent must be at least 17 years of age” and “other than a taxpayer’s child” for the Other Dependent Credit? From the Coursework: The Other Dependent Credit is a $500 nonrefundable credit for dependents other than a taxpayer’s child. The dependent…

Course:  Retirement PlanningLesson 1: Using IRAs to Build and Distribute More Retirement Income Student Question: Hi I was doing a little further reading on the new IRA distribution rules and wanted to see if “conduit” or “accumulation” trust rules will be necessary information for the exam? As I understand it, trusts as beneficiaries are held to the “five-year rule” or the “payout rule” depending on…

Course:  Fundamentals of Financial PlanningLesson 3: Personal Financial Statements Student Question: What role does the client’s primary residence play in the current ratio calculation? Is their outstanding mortgage loan amount considered a liability? Candace Instructor Response: Hi Candace, That’s a great question.  The residence is not considered a liquid asset and is excluded from “assets” for the current ratio. …

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…

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…

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…

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…