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CFP - Finley > CFP - Final Push > Flashcards

CFP - Final Push Flashcards

1
Q

Who establishes and maintains margin regulation requirements?

A

The Fed

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2
Q

Are retirement accounts of parents included in FAFSA calculations?

A

No

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3
Q

Are retirement accounts of students included in FAFSA calculations?

A

No

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4
Q

Is personal property included in FAFSA calculations?

A

No

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5
Q

What is the amount allowed for the American Opportunity Tax Credit?

A

Per child:

100% of the first $2,000 of qualified college expenses

25% of the next $2,000 for a max of $2,500

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6
Q

What is the result of fraud on an insurance application?

A

Misstated age: reduced benefit pro rated for the amount of premium paid

Anything else: rescinded

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7
Q

Is the interest expense on borrowed money for a margin account, investment loan, or line of credit to earn investment income deductible?

A

Yes

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8
Q

Do both spouses have to participate in a qualified plan to be affected by IRA deductibility phaseout rules?

A

No,

The participating spouse uses the regular phaseout amount

The non-participating spouse uses the Spousal IRA phaseout numbers

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9
Q

Options payoffs are:

Futures payoffs are:

Symmetrical or Asymmetrical?

A

Options: Asymmetrical

Futures: Symmetrical

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10
Q

Surviving spouse with child-in-care benefits terminate when the child reaches age…

A

16

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11
Q

Which comes first when determining index annuity returns?

Annual cap %

or

Participation limit?

A

Participation limit first, then annual cap %

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12
Q

What is the formula for insurance below the required coinsurance amount?

A

Amount of actual insurance / Amount required (i.e. 80%)

= New coinsurance percentage covered

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13
Q

What is the formula for basis with gift tax included?

A

Basis +

(FMV - basis) / (FMV-annual exclusion) x gift tax paid

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14
Q

The capital gain rate for collectibles is…

A

28%

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15
Q

Medical expenses are only deductible to the extent that they exceed…

A

7.5% of AGI

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16
Q

Section 121:

If you have owned and lived in a residence for more than _____ years, the proceeds from the sale of the residence is excluded from gross income to certain limits.

A

2

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17
Q

Section 121 sale of a personal residence:

Max exclusion for single
Max exclusion for MFJ

A

$250,000 single

$500,000 MFJ

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18
Q

If one spouse meets the 2 year rule for Section 121 sale of a personal residence and the other does not, how much is excluded from income?

A

Spouse that qualifies: $250,000

Spouse that doesn’t:
Months living at the residence / 24 x $250,000

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19
Q

Are dividends paid by a company deductible?

A

No

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20
Q

Personal bad debt is recognized as…

A

Short term capital loss

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21
Q

Which happens as soon as you sell something?

Recognized or realized?

A

Realized

22
Q

Which happens when it is applied to your taxes?

Recognized or realized?

A

Recognized

23
Q

What is the standard deduction for kiddie tax?

A

Earned income + $350

limited to $12,000

24
Q

For gift loans greater than $10,000 and less than or equal to $100,000, no interest is imputed if the borrower’s net investment income for the year does not exceed $______.

A

$1,000

25
Q

What business can deduct passive losses against active?

A

A closely-held C corporation that is not a personal service corporation - passive losses may be used to offset active, but not portfolio income.

26
Q

If a security becomes worthless during the tax year, how is the loss recognized?

A

The loss is treated as if it occurred on the last day of the tax year.

27
Q

Under the Employer’s Educational Assistance Program, an employer can reimburse an employee’s tuition, enrollment fees, books, supplies, and equipment up to $_______ per year

A

$5,250

28
Q

What is the formula for coefficient of variance?

A

Standard Deviation / Return

29
Q

What is the employee and employer max for SIMPLE IRAs?

A

$12,500 employee

$5,500 employer

$18,000 total

30
Q

Private placements are limited to _____ unaccredited investors and ______ accredited investors.

A

35

Unlimited

31
Q

Are VEBA benefits tax exempt?

A

Yes, if they meet requirements of Section 501(c)(9)

32
Q

Transferring a life insurance policy on own life (to beneficiary or ILIT) removes the death benefit from the gross estate if they live more than ______ years afterwards.

A

3

33
Q

If the spouse is not a U.S. citizen, only the first $_______ of annual present interest gifts to them is exempt from gift tax.

A

$152,000

34
Q

What is the max Lifetime Learning Credit??

A

20% of qualified expenses up to $10,000 = $2,000 max credit PER FAMILY

35
Q

Which credit is family based and which is individual based?

A

Lifetime Learning Credit - family

American Opportunity Credit - individual

36
Q

Can a taxpayer take both Lifetime Learning Credit and American Opportunity Credit for the same student?

A

No, but they can if multiple dependents are students

37
Q

What are the underpayment of estimated tax rules for prior year AGI less than $150,000?

A

Lesser of:

90% of current year tax liability

and

100% of prior year tax liability

38
Q

What are the underpayment of estimated tax rules for prior year AGI greater than $150,000?

A

Lesser of:

90% of current year tax liability

and

110% of prior year tax liability

39
Q

Accredited investors:

Income more than $_______ (S) $_______ (MFJ)

Net worth more than $___________

A

$200,000
$300,000

$1,000,000

40
Q

What is the information ratio?

A

Alpha divided by standard deviation

41
Q

Special use valuation (2032A) is for farms or closely held business that has property that makes up _____% of the adjusted value of the gross estate and real property is _____%. The decedent must have been a material participant for ____ of the last _____ years.

A

50%
25%

5
8

42
Q

If special use property (Section 2032A) is disposed of to a nonfamily member or the property discontinues its qualified use withing _____ years of the decedents death, all or part of the estate savings may be captured - exceptions exist if the heir dies or goes bankrupt.

A

10

43
Q

Deferred payment of estate tax (section 6166) can occur if the value of the closely held business exceeds ____% of the value of the adjusted gross estate.

A

35%

44
Q

Deferred payment of estate tax (section 6166) allows estate tax to be deferred for _____ years, then paid in _____ annual installments.

A

5

10

45
Q

What is the benefit of a stock redemption (section 303)?

A

The estate can redeem the decedent’s shares - stepped up then sold as a capital gain rather than ordinary income

46
Q

What are the 3 conditions that must be met for a section 303 stock redemption?

A
  1. Shares must be included in decedent’s estate
  2. Value of the stock must be more than 35% of AGE
  3. Redemption proceeds cannot be more than federal and state death taxes plus deductible funeral and administrative expenses
47
Q

According to the 50/40 test, defined benefit pension plans must benefit no fewer than the lesser of:

A

50 employees

40% or more of all non-excludable employees

48
Q

No more than ____% of the employer contributions to a qualified plan can be used to purchase whole life insurance, and no more than _____% can be used to by term or universal.

A

50% whole

25% term/universal

49
Q

For defined benefit plans, the life insurance death benefit cannot exceed what?

A

100x the expected monthly benefit for the employee

50
Q

Medicaid look back is…

A

60 months

51
Q

Loss property: Gain basis & holding period

A

Donor’s basis, donor’s holding period

52
Q

Loss property: Loss basis & holding period

A

FMV at the time of gift, holding period begins at time of gift

CFP - Finley (11 decks)

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