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Question 1

What does it mean when npv equals zero?

Answer 1

Interest rate is same as required rate of return. Good investment.

Question 2

Which calculations are always in begin mode?

Answer 2

One college tuition two retirement benefits three family needs

Question 3

Which calculations are always in end mode?

Answer 3

Retirement plan contributions, Bond interest, mortgage payments

Question 4

What does it mean when npv is below required rate of return?

Answer 4

Bad investment.

Question 5

Child tax credit

Answer 5

Child tax credit of $2,000 for each qualifying child under 17. Credit phased out above $400,000 Magi mfj and 200,000 single. 1400 per child refundable credit

Question 6

Cfod tcja

Answer 6

To be replaced

Question 7

Child Care Credit

Answer 7

Children under age 13, non-refundable 20% of expenses paid for care of a dependent that allows the taxpayer to work in an income. Qualifying expenses limited to $3,001 dependent 6,000 two or more

Question 8

Qualified adoption expenses (4)

Answer 8

Eligible children 17 or younger any age was a US citizen or resident alien, who has special needs court costs attorney fees cost to adopt a foreign child no surrogate no spouse’s child claim in the year of adoption finalized

Question 9

Elderly and disabled credit (3)

Answer 9

Person must be age 65 permanently and totally disabled

Question 10

Foreign tax credit

Answer 10

Credit for foreign tax paid

Question 11

Net operating income calculation

Answer 11

Potential rental income minus collection in vacancy costs minus operating expenses

Question 12

Installment sale gain calculation

Answer 12

Determine gain recognized in year of sale and each subsequent year. Profit over total contact price equals gross profit percentage. Long-term capital gains

Question 13

YMCA calculations premium Bond

Answer 13

To be replaced

Question 14

YMCA calculations discount Bond

Answer 14

To be replaced

Question 15

Question gp-9. Steve and Barb’s budget outflows exceed their income and they want to retire now period what option would you recommend they consider?

Answer 15

Obtain a reverse mortgage

Question 16

What is irr?

Answer 16

It’s the rate at which the present value of the future cash flow equals the cost of the investment

Question 17

What do we know when irr is greater than expected return?

Answer 17

The investment is good

Question 18

What keys are important in irr?

Answer 18

CFO and cfj

Question 19

Devaluation

Answer 19

Lowering of value of a currency relative to another country’s currency

Question 20

Reevaluation

Answer 20

An increase in the value of a currency relative to another country’s currency

Question 21

What variable does rho signify?

Answer 21

Correlation coefficient

Question 22

What is correlation coefficient?

Answer 22

Tb replaced

Question 23

What number are two perfectly positively correlated securities?

Answer 23

1.0. this means they move exactly together

Question 24

What is the number for two perfectly negatively correlated securities?

Answer 24

-1.0. they move exactly oppositely. This would imply full mitigation of risk

Question 25

How do you get the correlation coefficient mathematically?

Answer 25

Divide the covariance number into standard deviations of security one times standard deviations of security 2

Question 26

CV

Answer 26

Coefficient of variation, or risk per unit of expected return

Question 27

Standard deviation definition

Answer 27

Measures variability of returns. Measures total risk

Question 28

What does beta measure?

Answer 28

Volatility of returns in the portfolio and measure of systematic risk

Question 29

Mnemonic for how to use duration to manage Bond portfolios

Answer 29

UPS f a l l e n If rates will rise, shorten duration If rates will fall, lengthen duration

Question 30

HALE

Answer 30

Health education, law, engineering. personal Service Corp.

Question 31

Where is taxable income or loss reported for a sole proprietorship?

Answer 31

On schedule c, loss carries to the first page of the 1040

Question 32

What form is the partnership tax return?

Answer 32

1065, but for information purposes only

Question 33

What is the IRS section concerning subchapter s corps?

Answer 33

1120s

Question 34

What type of interest can be deducted without any limits?

Answer 34

Sole proprietor loans, on schedule c

Question 35

How is a corp shareholders adjust their basis each year?

Answer 35

By the profit or loss for their share for the year

Question 36

Is the owner's salary in an s corp subject to FICA?

Answer 36

Yes, FICA and futa

Question 37

Section 1231

Answer 37

Games over and above macrs, to appreciation

Question 38

Section 1244

Answer 38

Governs stock in an s corp

Question 39

Section 179

Answer 39

Tbr

Question 40

Section 121

Answer 40

Governs capital gains in your personal residence

Question 41

Section 2032a

Answer 41

Governs valuation of a closely held especially land-based business, for a state purposes

Question 42

Section 403b

Answer 42

Governs retirement plan for schools school districts and nonprofits 501c3s

Question 43

Section 6166

Answer 43

Governs paying for estate taxes with installment sales when closely held businesses especially farming and ranching are involved

Question 44

Section 1035

Answer 44

Governs exchanges of insurance products

Question 45

Section 1031

Answer 45

Governs exchanges of like property, especially real estate

Question 46

Section 303

Answer 46

Governs arrangements for financing from shares of a closely held business especially farming and ranching

Question 47

SPAG

Answer 47

Special purpose rbr

Question 48

What's a disqualifying disposition?

Answer 48

Ex and sale within 1-2 years iso

Question 49

What is the stepped up basis at death in community property?

Answer 49

Jointly owned assets step up for both shares

Question 50

What is cost recovery recapture?

Answer 50

It means that your income recaptures the depreciation and that now becomes income when you sell an asset? BUT does your basis change? And does this matter for individual taxes? Of course you don't usually take deprec unless you own real est

Question 51

What are other names for the bypass trust?

Answer 51

B trust, unified credit shelter trust, nonmarital trust, family trust, applicable credit amount

Question 52

Why bypass trust?

Answer 52

Usually 11,580,000, equal to exemption. To give decedent postmortem control over the property. At surv spouse death, remaining assets pass estate tax free to the remainder bennie

Question 53

QTIP

Answer 53

Qualified terminal interest property trust

Question 54

Q-tip trust simple or complex?

Answer 54

Simple

Question 55

What does q-tip trust do?

Answer 55

Decedent wishes to provide surviving spouse with stream of income for life yet also wishes to qualify property for marital deduction. must be included as an asset in the gross estate of surviving spouse

Question 56

Keys to a q-tip trust (l a m e)

Answer 56

Lifetime income interest for the spouse Annual payments to the spouse Mandatory payments to the spouse Exclusively for the spouse

Question 57

What are personal service corporations a subset of?

Answer 57

C Corp