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CFP Study Anytime > Numbers/Rates Memorization > Flashcards

Numbers/Rates Memorization Flashcards

1
Q

Charges or misconduct reported to CFP Board

A

30 days

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2
Q

May appeal DEC ruling

A

Within 30 days

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3
Q

PITI %

A

28% of gross income

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4
Q

Monthly debt %

A

36% of gross income

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5
Q

Kiddie tax unearned standard deduction

A

$1,150 standard deduction
$1,150 at kids rate 10%
Excess unearned income at parent’s rate

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6
Q

Kiddie tax earned income

A

Greater of $1,150
or earned income +$400

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7
Q

Primary residence home sale gain exclusion

A

$500k married
$250k single

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8
Q

18 months COBRA

A

Voluntary/involuntary termination
Full to part time transition
Employees dependents

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9
Q

36 months COBRA

A

Death, Divorce, Separation, eligible for Medicare, spouse+ dependents

Loss of dependent status, dependents with status change

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10
Q

Disability covers x% of earned income

A

50%- 60%

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11
Q

Unemployment benefits duration

A

Up to 26 weeks

13 week extension in high unemployment periods

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12
Q

Disability qualifying event

A

29 months

Expected to last not less than 12 months

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13
Q

Most disability policy elimination periods

A

90 days

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14
Q

Inform simultaneous death act

A

Deaths within 120 hours = predeceased

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15
Q

Health FSA contribution limit

A

$2,850 annually

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16
Q

Dependent care FSA reimbursement max

A

$5,000 per year

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17
Q

Accredited investor

A

$1mm net worth
$200k annual single income
$300k annual married income

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18
Q

Frivolous return penalty

A

$5,000

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19
Q

Negligence tax underpayment penalty

A

20% of underpayment

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20
Q

Tax fraud penalty

A

75% of underpayment

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21
Q

Failure to pay taxes penalty

A

0.5% per month, max 25%

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22
Q

Failure to file taxes penalty

A

5% per month, max of 25%

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23
Q

Avoid penalty on tax underpayment, pay ->

A

90% of current year tax liability
100% of prior year or
110% of prior year of MAGI $150k+

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24
Q

Self employment tax

A

14.13%

1/2 deductible

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25
Q

Insurance premiums paid in group coverage tax-free up to

A

$50k of coverage

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26
Q

Tax-free benefit for dependent care

A

$5,000

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27
Q

Tax-free employer educational assistance

A

$5,250

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28
Q

Tax free employer assisted adoption benefits

A

$10k

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29
Q

Tax- free employer subsidized parking

A

$280 / month

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30
Q

Tax-free discount to employees on company products

A

20% discount on selling price to customers

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31
Q

State and local tax
Personal property tax
Real estate tax

Limited deduction

A

$10k combined

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32
Q

These 3 itemized deductions are limited to $10k combined

A

State and local sales tax
Personal property tax
Real estate tax

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33
Q

Mortgage interest deductible (on mortgage base balance)

A

$750k married
$375k single
Improvements only

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34
Q

Medicate tax

A

2.35% on wages over $200k
1.45% on wages up to $200k

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35
Q

Credit for child care expense limit

A

$3k (1 child)
$6k total (2+ childs)

At 20% of expenses

$600
$1,200

36
Q

Child tax credit

MAGI reduction

A

$2k per child

Reduced by $50 for every $1k above $400k MAGI

Up to $1,400 per child is refundable tax credit

37
Q

Retirement savings contribution credit

A

$2k single / $4k MFJ

38
Q

Max adoption credit

A

$14,890 per eligible child

39
Q

Dividend received deduction

US Corp investing in other US Corp

A

Own 20% or less, exclude 50% divy
Own 20-80%, exclude 65% divy
Own 80%+, exclude dividend 100%

40
Q

Accumulated earnings tax

A

20%

$250k can be accumulated for business need

41
Q

Trust tax exemption

A

Required to distribute (complex) $300

Not required to distribute (complex) $100

42
Q

MACRS Tables

A

MACRS
Y1, 5Yr 20% 7-year 14.29%
Y2, 5Yr 32%. 7-year 24.49%

Straight-line
Y1, 5Yr 10%. 7-year 7.14%
Y2, 5Yr 20%. 7-year 14.29%

43
Q

Like kind exchange time constraints:

Identified w/i x date of transfer
Title received w/i x days of transfer

A

Identified 45 days
Title received 180 days

44
Q

Deductible net loss from real estate

A

$25k/ year

45
Q

Gift of appreciated LTCG Property to 59% organizations (charity)

A

If basis used, deduct up to 50% of AGI
If FMV used. deduct up to 30% of AGI

46
Q

Social Security Fully Insured

A

40 Quarters of coverage

Currently insured = 6 quarters -> $255 lump sum death benefit

47
Q

Section 415 Limit
Max Ann’l Qualified Limits

A

$61k or 100% of Salary

Only $305k if salary taken into account

Annual life annuity= lesser of $245k or 100% compensation(3 year average of highest salary years)

48
Q

Elective deferral limit

A

$20,500 with $6,500 catch up after 50

49
Q

Highly compensated employees (HCE)

A

Greater than 5% owner

Earning $135k in prior year

50
Q

Key employee

A

Greater than 5% owner

Officer with $200k compensation

Greater than 1% owner and compensation more than $150k

51
Q

Top heavy plan

A

60% of balances or balances to key employees

Salaries capped at $305k for calculation

52
Q

ADP ACP Testing
HCE vs NHCE

A

HCE not more than 125% of NHCE (ADP is 8%+)

HCE not more than 200% of NHCE rate and not more than 2% greater than NHCE Rate (1-8%)
0-2% NHCE x2 = HCE
2-8% NHCE +2 = HCE

53
Q

SIMPLE Contribution limit

A

$14,000 max aggregate
$3k age 50 catch up

54
Q

Aggregate Limits Retirement Contribution Max

401(k), 403(b), SARSEP

A

$20,500
$6,500 catch up

55
Q

Employer compensation deduction limit

A

Max of 25% if all aggregate eligible participant compensation

56
Q

% of community property included in Gross Estate

A

1/2

57
Q

Community property step-up?

A

100% step up IF 1/2 property includes in decedents gross estate

58
Q

3-year rule within death

A

If made within 3 years of death (included in gross estate):

Gift tax paid out of pocket
Transfers of life insurance to the insured

59
Q

Estate Tax Rate

A

40%

60
Q

GSTT Rate

A

40%

61
Q

Annual gift exclusion

A

$16k

62
Q

Lifetime Exclusion

A

$12,060,000

63
Q

Gift Tax Rate

A

40%

64
Q

Rate on ALL 3 types of Transfer Tax

A

40%

65
Q

Non spouse super annual gift tax exclusion

A

$164,000

66
Q

Asset $ to qualify for Medicaid

A

< $2k in assets

67
Q

Rule against perpetuities

A

Must vest no later than 21 years and 9 months after youngest Bene lives (from when trust was created)

68
Q

Medical expense deduction max

A

7.5% of AGI FLOOR

Includes medical insurance premiums

69
Q

Margin interest expense deductible up to

A

Investment income:

Interest
Ordinary dividends
STCG

70
Q

HALE (Health) Corps Taxation

A

PSCs taxed at 21%

Accumulated earnings > $150k taxed at 20% accumulated earnings tax

71
Q

Corporate Tax Rate

A

21%

72
Q

Section 179 expense election available for 1245 property

A

Limited to Corporation’s taxable income (current max $1mm)

73
Q

Deduction for active participation in real estate (plus phase out)

A

Deduct up to $25k per year

< $100k AGI

74
Q

Cost recovery deductions that can be taken in year 1 (%)

A

10%

75
Q

SS included in Gross Income

A

MAGI > $25k 50% included
MAGI > $34k. 85% included

76
Q

Money purchase permitted disparity

A

70%

77
Q

SEP Contribution limits
15% & 25%

A

15% = 12.12% of net income
25% = 18.59% of net income

78
Q

Retirement early withdrawal penalty

A

10% penalty
25% if taken within 2 years of first participation

79
Q

Simple IRA Special Election (Employer)?

Also give match % (baseline)

A

100% match of first 3%

Election:
1% match in no more than 2 years in any 5 year period

80
Q

UBTI subject to tax

A

LP income in excess of $1k -> UTBI tax

81
Q

ISO vs NSO

A

One year:

First $100k are ISOs
Excess over $100k are NSOs

82
Q

15% PSP Shortcut

A

$Profit x 0.1212 or 12.12%

83
Q

Charitable contribution tax deduction (insurance policy)

A

Lesser of Cash Value or Basis

Limited to 50% of AGI

84
Q

Max Gift in any one year without causing gift tax

A

$12,076,000

Annual $16k plus lifetime $12,060,000

85
Q

Business property coinsurance

A

90%

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