Down to the wire 2

Question 1

C corp

Answer 1

double taxation

nonqualified deferred comp

Question 2

S corp

Answer 2

capital-intensive (raise money for nonactive owners)
equal control, minimize taxes
must be domestic
must have board of directors

Question 3

general partnership

Answer 3

all active owners

Question 4

business life insurance premiums

Answer 4

NOT deductible (after-tax)

Question 5

asset transfer to SNT

Answer 5

incomplete gift (NO gift tax return)

Question 6

AMT

Answer 6

items deductible for regular tax (but different rules)

Question 7

ABLE

Answer 7

ONLY if receive SSI/Medicaid but NOT AUTOMATICALLY elligible

Question 8

Qualifying resident test

Answer 8

1. member of taxpayer household

2. pass gross income test

Question 9

NOT important in property settlement

Answer 9

how much mortgage paid during marriage

Question 10

service partner in partnership

Answer 10

guaranteed payment

Question 11

impairment-related expense

Answer 11

ONLY handicap

NOT subject to 7.5% medical & 2% miscellaneous

Question 12

NOT income in SNT

Answer 12

distribution to pay for caregiver

Question 13

pool special needs trust

Answer 13

separate account

• alternative to SNT if not enough assets
• NOT repository for family gifts/ inheritance

Question 14

contribution from ROTH IRA dispersed

Answer 14

tax-free ANYTIME

Question 15

worse from longevity risk

Answer 15

inflation risk

Question 16

marital deduction

Answer 16

surviving spouse does NOT have to be U.S. citizen/ resident alien

Question 17

applicable credit amount

Answer 17

only applied to FEDERAL taxes

Question 18

above the line deduction

Answer 18

tax credit claimed as deduction (regardless if itemized)

Question 19

social security

Answer 19

annuity payment

Question 20

prospect thoery

Answer 20

1. nonlinear probability weighting
2. reference dependence
3. loss aversion

Question 21

satisficing

Answer 21

“good enough” decision

Question 22

limited partnership

Answer 22

compensate for passive owners

Question 23

right to surrender policy

Answer 23

inclusion in estate

Question 24

file fed estate tax return

Answer 24

ONLY when exceed basic exclusion/ credit amount

Question 25

NOT completed gift

Answer 25

1. REVOCABLE trust
2. NO withdrawal from joint
3. asset transfer to SNT

Question 26

estate administration

Answer 26

NOT individual benefit

Question 27

NOT step 3

Answer 27

Monte Carlo method

Question 28

multi-generational family

Answer 28

1. retirement planning
2. debt management
3. college planning

Question 29

installment payments (6166)

Answer 29

first 5 years NOT interest only

Question 30

NOT income tax deductible

Answer 30

divorce and appraisal fees

Question 31

Sale of business interest for private annuity

Answer 31

annuity terminates at seller death

Question 32

Part C Medicare

Answer 32

monthly premium

Question 33

exempt Medicaid resource test

Answer 33

cash value of life insurance

vehicle for transport

Question 34

community property

Answer 34

NO automatic right of survivorship

Question 35

failure to pay child support

Answer 35

civil and criminal