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Wrong Answers Retirement > Wrong Answer > Flashcards

Wrong Answer Flashcards

1
Q

Whats the formula for PIA?

A

PIA - [(months prior/180) * PIA]

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2
Q

What is the max amount of annual contribution to a defined benefit plan?

A

There is none actuarially determined.

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3
Q

What is the max annual limit for life annuity under 415 limit

A

265,000 Or 100% of comp avg last 3 years. Lessor of.

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4
Q

Whats the steps in calculating pension benefits?

A

Multiply percentage given by years of service then by average annual compensation.

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5
Q

Do investment returns affect account balances in a money purchase plan?

A

No

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6
Q

If forfeitures are not reallocated to money plan participants would the employer decrease contributions?

A

Yes

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7
Q

In DB plans do forfeitures always reduce employer cont.

A

Yes

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8
Q

Must profit sharing plans make cont. that are “substantial and recurring”?

A

Yes

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9
Q

What age do you collect Medicare at?

A

65

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10
Q

Which tax form is used to report federal gift taxes

A

709

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11
Q

When a gift is split do both spouses have to file when a gift is split?

A

yes

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12
Q

Which form is used to file federal estate taxes?

A

706

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13
Q

Can the joint and last survivor table for be used if your spouse is 9 years younger than you?

A

No must be 10 years younger

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14
Q

Can the joint and last survivor table be used if with a child?

A

no

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15
Q

Is a qualified Stock option plan considered an ISO?

A

yes

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16
Q

Is the calculation of discounts unequal cash flows at a required rate of return less the initial cost of an investment NPV?

A

yes

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17
Q

Is Portability of an estate exemption when the surviving spouse uses the life time exemption of deceased spouse.?

A

yes

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18
Q

If an annuity is immediate does it lose its tax deferral status?

A

yes

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19
Q

Does a rental apartment building help with income tax deferral?

A

yes

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20
Q

Is private-activity municipal bond interest an add back item for AMT?

A

yes

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21
Q

Are NYC income taxes an add back item for AMT?

A

yes

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22
Q

Is the bargain element on exercised ISOs add back for AMT?

A

yes

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23
Q

Is it better to gift cash than securities to reduce taxes?

A

Yes Donees basis is higher

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24
Q

Under CFP Board code of ethics are you allowed to terminate a client relationship if you feel uncomfortable?

A

yes

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25
Q

If parents purchase bonds in their names to benefit their child for education would their AGI be a factor during redemption?

A

Yes if their agi is below a certain threshold then they would be free from Federal tax exposure.

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26
Q

If the coupon is higher does that shorten the duration?

A

yes

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27
Q

If a client is trading frequently and wants to lower taxes what should they do?

A

Switch from short to long term.

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28
Q

Is a deductible IRA good for a business owner with low income and wants to reduce his taxes?

A

Yes.

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29
Q

What form is used for RMDs that were not taken due to personal oversight think eXcise tax?

A

1040X

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30
Q

Does a gift-leaseback technique offer any discounting?

A

no

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31
Q

Is gifting a rental building into a newly established family LP with limited interest with family members good for reducing taxes?

A

yes

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32
Q

Is a letter of admonition private?

A

no public on CFP board website

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33
Q

When gifting common stock for gift purposes what is the is based on.

A

Difference between FMV of corp and agg value of preferred shares.

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34
Q

Is reallocating a portfolio based on market conditions a tactical strategy?

A

yes

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35
Q

At death of first spouse for SS does the spouse get to take 100% of their spouses benefits?

A

yes

36
Q

What’s the time frame to use the 10,000 first home from a Roth IRA?

A

5

37
Q

Does PITI remain constant even as the mortgage gets paid down?

A

yes

38
Q

How does withdrawals come out for an annuity?

A

Lifo

39
Q

What bond feature should a client use if they believe that interest rates will fall?

A

Call feature if rates are high.

40
Q

What comes after gross income for calculating getting to AGI?

A

Deductions and business expenses.

41
Q

What do you add to Net income for business owners after prior to SE tax?

A

Dividends and interest.

42
Q

What comes after SE tax has been taken for a business owner?

A

IRA deductions

43
Q

How many months after 62 can a client claim SS?

A

1 month

44
Q

When 85% is trigged for a single tax payer for SS what is the income amount?

A

34,000.

45
Q

Can you elect basis when transferring stock to charity?

A

yes

46
Q

For a marginal tax income bracket of 22% or less what would favor a client more credits or deductions?

A

credits

47
Q

How much can a business owner deduct for entertainment?

A

0

48
Q

How much can a business owner deduct for travel?

A

100%

49
Q

How much can a business owner deduct for meals?

A

50%

50
Q

Are Coverdell cont affected by the cont of a QTP?

A

no

51
Q

If someone gifts money and then dies within 3 years does a portion go back into the gross estate?

A

yes

52
Q

What part of auto insurance would cover a collision into a stationary object?

A

D

53
Q

What is contained in the P/E valuation model?

A

Future earnings X P/E ratio.

54
Q

If after using the P/E valuation model, the amount is higher then the current stock price. Is the stock underpriced?

A

yes

55
Q

What’s the biggest risk in establishing an unfunded ILIT?

A

A transfer in a second to die policy and grantor(s) die within 3 years

56
Q

Is property of renters excluded from home owners insurance?

A

Yes doesn’t matter where on property.

57
Q

If a client feels cheated on an investment transaction where do they start?

A

With Compliance (registered principal).

58
Q

Can you collect a commission on an ETF with a series 6?

A

No

59
Q

Can you trade mutual funds with a series 6?

A

yes

60
Q

Under ERISA rules can a profit sharing plan exclude employees who work fewer than 1,000 hrs per year?

A

Yes

61
Q

How many hours is usually required to be part of a employer-provided health insurance plan?

A

32 hrs

62
Q

In figuring out a stocks over or under performance based on dividends which formula do you use first?

A

R = rf + (rm-rf)B

63
Q

Is interest deductible on a home equity loan that is not used for home improvement?

A

No must be used.

64
Q

For a “service” related business what is the min. threshold of income for deductible due to QBI?

A

464,200

65
Q

How soon would the CFP board want to know of the certificant’s disciplinary action by a regulator ruling to revoke?

A

10 days.

66
Q

How is a distribution from a 2503 c minor trust taxed?

A

Kiddie.

67
Q

In a situation where a clients health is declining and they have trouble recalling things should you reach out to family member?

A

No go with a trusted professional, Dr. is better.

68
Q

Is bunching deductions and using DAFs a good way to lower taxable income?

A

yes

69
Q

What is the cutoff age for a child tax credit deduction?

A

17

70
Q

How much of the child tax credit is refundable?

A

1600

71
Q

Can famers and insurance companies claim NOL carryback losses?

A

Yes

72
Q

Whats the first step in a casualty loss?

A

FMV or basis lessor of

73
Q

Whats the 2nd step P&C loss?

A

Less insurance

74
Q

Whats the 3rd step in P&C loss?

A

-$100

75
Q

Whats the 4th step in P&C loss?

A

10% of AGI

76
Q

Can casualty losses be deducted?

A

No

77
Q

Is an exchange for a hotel and a shopping center a fair 1031 exchange?

A

Yes

78
Q

What percent can a sole prop deduct as a below the line deduction under 199A?

A

20%

79
Q

Can a sole prop take a standard deduction and a business deduction?

A

Yes passthrough.

80
Q

Is a casualty loss subject to AGI phaseout?

A

No

81
Q

For business income and a W2 what lessor amounts is their deduction limited to?

A

20% of business or 50% of W2.

82
Q

Is there a limit to the child credit of 2,000 based on how many kids you have?

A

No

83
Q

What is the AGI phaseout for the child tax credit?

A

400,000

84
Q

Does the retirement savers credit apply to 529 accounts?

A

No just ABLE or retirement plans

85
Q

What is the credit amount for Retirement Savings Cont. credit?

A

2,000(s) 4,000(mfj).

86
Q

What income level is no credit for retirement savings available?

A

33,000(s) and 66,000(MFJ).

87
Q

What does SOFR stand for?

A

Secured Overnight Financing Rate

Wrong Answers Retirement (4 decks)

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