CRPC Sample Tests Questions and Answers 100% Correct

Gift splitting - ANSWER-Allows a married couple to double their allowable annual exclusions is only allowed for married couples Ownership limited to spouses only - ANSWER-Joint tenancy tenancy by the entirety community property Grantor retained interest Trust Grit - ANSWER-Grantor can receive all income earned by the trust Qualified terminable interest Property Trust Q-tip - ANSWER-Income of a Q-tip goes to the grantor's spouse Charitable lead Trust CLT - ANSWER-The income goes to charity Power of appointment trust POA - ANSWER-Income goes to the grantor's spouse Valuation date for gifts - ANSWER-The date on which the transfer is completed Gross estate - ANSWER-Includes all the property that is subject to the federal estate tax whether or not owned by the decedent and whether or not included in the the probate or taxable estate Taxation of reinvestment of ordinary dividends - ANSWER-Qualified dividends are subject to the same tax rates applicable to long-term capital gains The basis for charitable contribution deduction for stock - ANSWER-Based on the current fair market value of the stock Taxation of substitute payments in lieu of a dividend - ANSWER-Substitute payments in lieu of a dividend are not subject to preferential treatment and are treated as ordinary income How does a stock dividend affect basis - ANSWER-The basis is reduced to provide basis for shares are received as a stock dividend Net capital loss amount - ANSWER-$3,000 per year are deductible Taxation of qualified dividends - ANSWER-Dividends are taxed at 15% or 20% if the dividends fall into the 39.6% bracket Text treatment for a shareholder participating in common stock dividend reinvestment program - ANSWER-The shareholder is treated as if he received a cash dividend equal to the fair market value of the shares purchased under the plan When is earned income taxed - ANSWER-It is taxed in the year when the check was received Medical expenses and AMT - ANSWER-Most that are deducted are allowed for AMT purposes 10% of AGI Bargain element on exercise of an incentive stock option and AMT - ANSWER-Included as a preference item for AMT Private activity municipal bonds and AMT - ANSWER-Interest from private activity Muni bonds is an AMT preference item except for bonds issued in 2009 and 2010 Home mortgage interest and AMT - ANSWER-Home mortgage interest is allowed for regular and AMT Adjusted gross income - ANSWER-Income remaining after subtracting the adjustments to income Domestic Partners transfer wealth to the other vs legal spouse - ANSWER-Governor domestic partner cannot take a marital deduction in excess of the gift tax annual exclusion for the transfer while a donor spouse could If a domestic partner is appointed as conservator or Guardian - ANSWER-The individual should make his or her desire to have the domestic partner appointed by executing written documents approved by state law as intestacy laws typically follow the bloodline Per year 4 retirement benefit increase over full retirement age - ANSWER-8% Qlac - ANSWER-Suitable for those who are healthy and have a family history of longevity and those entering retirement with Social Security as their only source of guaranteed income Bucket approach to withdrawals from retirement savings - ANSWER-... Proper written Financial goal - ANSWER-Specific in terms of gold dollar amount and time frame Income replacement percentages - ANSWER-Income replacement percentages vary between low-income and high-income retirees. Income replacement ratios should not be used as the only basis for planning. Are useful for younger clients as a guide to their long-term planning and investing. Investment policy attributes - ANSWER-Long-term perspective. Realistic. Clearly defined. Asset allocation strategies - ANSWER-Tactical. Core satellite. Strategic Correlation and diversification - ANSWER-The lowest correlation provides the most diversification Two major risks associated with Common Stocks - ANSWER-Market risk and business risk Two major risks associated with Bond investing - ANSWER-Interest rate risk and purchasing power risk Calculating yield to maturity on the calculator - ANSWER-Set the end mode Allowable earnings limit for 2015 for no reduction in Social Security benefits - ANSWER-$15,720 earned income Social Security benefits available when fully insured worker begins at full retirement age - ANSWER-At full retirement age the workers spouse will receive at least 50% of the workers PIA. Capitulo 4 retirement age the PIAA is reduced by 25/36 of 1% for each of the first 36 months the spouse is under full retirement age How does tax-exempt interest affect social security taxation - ANSWER-All tax-exempt income is included to determine a social security taxation a maximum of 85% of Social Security benefits are subject Features of defined benefit plans - ANSWER-Write a predetermined fix retirement benefit for participating employees Do Target benefit plans offer Survivor annuity benefits to married participants - ANSWER-Qualified Pension Plan such as Target benefit plans are required to offer Survivor annuity benefits to married participants qualified profit sharing plans including stock bonus plans and Aesop's generally are not subject to the Survivor annuity requirements but more typically offer lump sum payouts Describe an in lieu of plan - ANSWER-A pure Deferred Compensation Plan is sometimes called in lieu of plan because the employee is receiving the employer's promise to pay benefits in lieu of current income. death benefit plans provide no life time benefits to the employee participant the employer helps to fund the retirement benefit provided by a supplemental plan. some Deferred Compensation Plan provide additional benefits such as benefits for disability Similarity between qualified and non-qualified plans - ANSWER-They must enable the employee to defer taxation on the plan funds until retirement