"Constructive Receipt" is normally applicable to the tax treatment of... - ANSWER Non-
Qualified Deferred Compensation Plans
Non-Qualified Deferred Compensation - ANSWER TCHRA: Compensation that is not im-
mediately taxable. It does not qualify under ERISA for tax exemption. Taxation occurs once
the individual receives the compensation or "property"
A 1035 exchange refers to a tax free exchange of... - ANSWER Annuities
1035 Exchange - ANSWER IRS allows tax-free transfer of cash values between 2 LIKE poli-
cies (i.e. Life to Life, Annuity to Annuity, or Life to Annuity).
If a bank uses its own proprietary mutual funds for fiduciary accounts then it should do the
following (3) - ANSWER -Be able to substantiate the reasonableness of using these funds
-Explain the fees associated
-Monitor the fund's investment performance
A simple trust earned $27,000 in dividends. It paid $4,000 in trustee fees. 1/2 from Income
and 1/2 from P. What is the DNI? - ANSWER $23,000
T/F: In a simple trust, trustee fees are deducted from DNI even the fees that come out of
Principal? - ANSWER True
Sprinkling trust - ANSWER A trust in which the income or principal is distributed among
the members of a designated class in amounts and proportions as may be determined in the
discretion of the trustee or other party. Also called spraying trust.
1
, A US dollar can buy 33 Thai Baht. What is a characteristic of the Thai Baht? - ANSWER
The Thai Baht is a medium f exchange to facilitate trade and of itself has no intrinsic value.
A very wealthy client created a trust that names your bank as a co-trustee with an individual
following the client's death. Upon reviewing the trust document, you notice that the individ-
ual trustee is granted sole and complete responsibility for all trust investment decisions. Is
that acceptable? What should you follow up with? - ANSWER This is ok but you should
require that trust contain broad language specifying that the bank will be exonerated (excul-
pated) from any decision made individual trustee.
Al, Bob and Chuck purchased a $300,000 piece of real property. They each contributed
$100,000 to the purchase. Which of the following forms of property ownership would auto-
matically pass the property to Bob and Chuck if Al dies first? - ANSWER JTWROS
Assume Ann, 45, leaves her job at Google and takes a similar position at Facebook. If she in-
structs Google's human resource department to distribute her existing 401(k) balance to an
IRA, - ANSWER Google may distribute Ann's full account balance without withholding any
amount.
Assume that the United States is experiencing a larger than normal GDP growth and the Fed-
eral Reserve wants to "cool things off" with an interest rate hike. Which of the following
BEST describes the mechanism to accomplish this objective? - ANSWER Pursue open
market activities (OMA) to sell bonds.
Assuming Amy created a five-year grantor annuity trust (GRAT) in 2015 with a 25% annuity
payment, and she dies in 2018 - ANSWER Amy could have used her closely held business
or a publicly traded stock to fund the GRAT
Barney, an insurance agent, shows Myron why he needs $250,000 of additional coverage.
Myron is young and has three young children. He is investment-minded and likes to play the
market. Which of the following is the best option for Myron - ANSWER $250,000 variable
universal life policy
2
Qualified Deferred Compensation Plans
Non-Qualified Deferred Compensation - ANSWER TCHRA: Compensation that is not im-
mediately taxable. It does not qualify under ERISA for tax exemption. Taxation occurs once
the individual receives the compensation or "property"
A 1035 exchange refers to a tax free exchange of... - ANSWER Annuities
1035 Exchange - ANSWER IRS allows tax-free transfer of cash values between 2 LIKE poli-
cies (i.e. Life to Life, Annuity to Annuity, or Life to Annuity).
If a bank uses its own proprietary mutual funds for fiduciary accounts then it should do the
following (3) - ANSWER -Be able to substantiate the reasonableness of using these funds
-Explain the fees associated
-Monitor the fund's investment performance
A simple trust earned $27,000 in dividends. It paid $4,000 in trustee fees. 1/2 from Income
and 1/2 from P. What is the DNI? - ANSWER $23,000
T/F: In a simple trust, trustee fees are deducted from DNI even the fees that come out of
Principal? - ANSWER True
Sprinkling trust - ANSWER A trust in which the income or principal is distributed among
the members of a designated class in amounts and proportions as may be determined in the
discretion of the trustee or other party. Also called spraying trust.
1
, A US dollar can buy 33 Thai Baht. What is a characteristic of the Thai Baht? - ANSWER
The Thai Baht is a medium f exchange to facilitate trade and of itself has no intrinsic value.
A very wealthy client created a trust that names your bank as a co-trustee with an individual
following the client's death. Upon reviewing the trust document, you notice that the individ-
ual trustee is granted sole and complete responsibility for all trust investment decisions. Is
that acceptable? What should you follow up with? - ANSWER This is ok but you should
require that trust contain broad language specifying that the bank will be exonerated (excul-
pated) from any decision made individual trustee.
Al, Bob and Chuck purchased a $300,000 piece of real property. They each contributed
$100,000 to the purchase. Which of the following forms of property ownership would auto-
matically pass the property to Bob and Chuck if Al dies first? - ANSWER JTWROS
Assume Ann, 45, leaves her job at Google and takes a similar position at Facebook. If she in-
structs Google's human resource department to distribute her existing 401(k) balance to an
IRA, - ANSWER Google may distribute Ann's full account balance without withholding any
amount.
Assume that the United States is experiencing a larger than normal GDP growth and the Fed-
eral Reserve wants to "cool things off" with an interest rate hike. Which of the following
BEST describes the mechanism to accomplish this objective? - ANSWER Pursue open
market activities (OMA) to sell bonds.
Assuming Amy created a five-year grantor annuity trust (GRAT) in 2015 with a 25% annuity
payment, and she dies in 2018 - ANSWER Amy could have used her closely held business
or a publicly traded stock to fund the GRAT
Barney, an insurance agent, shows Myron why he needs $250,000 of additional coverage.
Myron is young and has three young children. He is investment-minded and likes to play the
market. Which of the following is the best option for Myron - ANSWER $250,000 variable
universal life policy
2
