CDFA Exam Study Materials
5-year cliff vesting - Answer-An employee who has at least five years of service must have a non-
forfeitable right to 100% of the employee's accrued benefit [IRC §411(a)(2)(A)].
3- to 7-year vesting (7-year graded vesting) - Answer-An employee who has completed at least three
years of service must have a non-forfeitable right to at least the following percentages of his or her
accrued benefit: 20% after three years of service, 40% after four years of service, 60% after five years of
service, 80% after six years of service, and 100% after seven years of service [IRC §411(a)(2)(B)].
Top-heavy plans or matching contributions typically use _________ vesting - Answer-3-year cliff vesting
or 6-year graded vesting.
Schedule A: Itemized Deductions - Answer-Schedule ____ may help identify unlisted assets or sources of
income. For example, property taxes may reveal real property or a boat that one spouse does not know
exists; and gambling losses would reveal that there are gambling winnings.
Schedule B: Interest and Ordinary Dividends - Answer-Schedule ____ identifies the assets and
investments generating interest and dividends.
Schedule C: Profit or Loss from Business - Answer-Schedule ___ may be a place to hide assets or
income. For example, depreciation expense is not a cash outflow and should sometimes be added back
to net income to determine actual income. The depreciation schedule may also reveal additional assets
in the business.
,Schedule D: Capital Gains and Losses - Answer-Schedule _______ is used to report gains and losses from
the sale of stocks, bonds, and real estate.
Schedule E: Supplemental Income and Loss - Answer-Schedule _____ is used to report income from
rental properties, royalties, partnerships, and S-corporation income. Depreciation would be something
to review.
Form 1065 - Answer-Form _________ is used to report partnership income.
Form 1120 - Answer-Form __________ is used to report corporate income
Form 1120S - Answer-Form ___________ is used to report corporate income for S corporations.
Schedule 1: Additional Income and Adjustments to Income - Answer-Schedule ____________________
includes additional income, such as capital gains, unemployment compensation, prize or award money,
and gambling winnings. It also includes deductions such as student loan interest, self-employment tax,
and educator expenses.
Schedule 2 Tax - Answer-Schedule _________ details the alternative minimum tax (ATM) or an excess
advance premium tax credit repayment.
Schedule 3 Nonrefundable Credits - Answer-Schedule _________ is used to claim a nonrefundable
credit other than the child tax credit or the credit for other dependents, such as the foreign tax credit,
education credits, or general business credit.
Schedule 4 Other Taxes - Answer-Schedule ___________ reports other taxes, such as self-employment
tax, household employment taxes, additional tax on IRAs or other qualified retirement plans and tax-
favored accounts.
,Schedule 5: Other Payments and Refundable Credits - Answer-Schedule _________ is used to claim a
refundable credit other than the earned income credit, American opportunity credit, or additional child
tax credit.
Form 4562 - Answer-Form _________ reports deductions for depreciation and amortization as well as
provides information on the business/investment use of automobiles and other listed property.
Form 4797 - Answer-Form ___________ reports the sale or exchange of business property and the
computation of recapture amounts under sections 179 and 280F(b)(2).
Accountant - Answer-An __________________ is a person who is qualified to keep, audit, and inspect
the financial records of individuals or business concerns and prepares financial and tax reports.
Actuary - Answer-An ___________ is a person whose work is to calculate statistically risks, premiums,
and life expectancies for insurance and pension plans.
Attorney - Answer-An ________________ person who is legally qualified and licensed to represent a
person in a legal matter, such as a transaction or lawsuit.
Business Valuator - Answer-A _________________ is an individual who is trained in evaluating and
assigning a value to a business.
Divorce - Answer-A __________________ is the legal proceeding by which a marriage is legally
terminated. It may be contested (where one party denies the allegation or wants to keep the marriage
in place) or uncontested.
Mediator - Answer-A _______________ is an individual who has been trained to assist people in coming
to an agreement, especially one that reconciles differences between disputants.
, Pension Valuator - Answer-A ________________________ is an individual who is qualified to calculate
the value of defined benefit pension plans, such as the marital portion of a plan for the division of assets
in a divorce.
Arbitration - Answer-_________________ is submitting a disputed matter for decision to a person who
is not a judge. The decision of an arbitrator is usually binding and final. Arbitration varies greatly from
mediation.
Best Interest of the Child - Answer-_____________________________ is a discretionary legal standard
used by judges when making decisions about custody, visitation, and support for a child when the
parents are divorcing.
Change of Venue - Answer-A ______________________ is a change of judges or geographical location,
requested by a party to the action who feels that the change is justified by state law.
Collaborative Divorce - Answer-A ____________________________ is a team approach to divorce in
which divorcing couples obtain professional help from specialists in the legal, financial, and mental
health fields; when needed, additional professionals (including child/parenting experts) may be called in
to help the couple settle their case.
Collaborative Law - Answer-_____________________________ is a new dispute resolution model in
which each party retains their own attorney who has gone through specialized
"___________________________" training. The lawyer's only job is to help settle the dispute. All parties
agree to work together respectfully, honestly, and in good faith to try to find "win-win" solutions to the
legitimate needs of both parties. No one may go to court, or even threaten to do so. If that should occur,
the ___________________________ process terminates and both lawyers are disqualified from any
further involvement in the case.
Collusion - Answer-________________ is an agreement between two or more persons where one of
the parties brings false charges against the other. In a divorce case, the husband and wife may agree to
use adultery as a ground in order to obtain divorce more quickly, knowing full well that adultery was not
committed. _________________ is illegal.
5-year cliff vesting - Answer-An employee who has at least five years of service must have a non-
forfeitable right to 100% of the employee's accrued benefit [IRC §411(a)(2)(A)].
3- to 7-year vesting (7-year graded vesting) - Answer-An employee who has completed at least three
years of service must have a non-forfeitable right to at least the following percentages of his or her
accrued benefit: 20% after three years of service, 40% after four years of service, 60% after five years of
service, 80% after six years of service, and 100% after seven years of service [IRC §411(a)(2)(B)].
Top-heavy plans or matching contributions typically use _________ vesting - Answer-3-year cliff vesting
or 6-year graded vesting.
Schedule A: Itemized Deductions - Answer-Schedule ____ may help identify unlisted assets or sources of
income. For example, property taxes may reveal real property or a boat that one spouse does not know
exists; and gambling losses would reveal that there are gambling winnings.
Schedule B: Interest and Ordinary Dividends - Answer-Schedule ____ identifies the assets and
investments generating interest and dividends.
Schedule C: Profit or Loss from Business - Answer-Schedule ___ may be a place to hide assets or
income. For example, depreciation expense is not a cash outflow and should sometimes be added back
to net income to determine actual income. The depreciation schedule may also reveal additional assets
in the business.
,Schedule D: Capital Gains and Losses - Answer-Schedule _______ is used to report gains and losses from
the sale of stocks, bonds, and real estate.
Schedule E: Supplemental Income and Loss - Answer-Schedule _____ is used to report income from
rental properties, royalties, partnerships, and S-corporation income. Depreciation would be something
to review.
Form 1065 - Answer-Form _________ is used to report partnership income.
Form 1120 - Answer-Form __________ is used to report corporate income
Form 1120S - Answer-Form ___________ is used to report corporate income for S corporations.
Schedule 1: Additional Income and Adjustments to Income - Answer-Schedule ____________________
includes additional income, such as capital gains, unemployment compensation, prize or award money,
and gambling winnings. It also includes deductions such as student loan interest, self-employment tax,
and educator expenses.
Schedule 2 Tax - Answer-Schedule _________ details the alternative minimum tax (ATM) or an excess
advance premium tax credit repayment.
Schedule 3 Nonrefundable Credits - Answer-Schedule _________ is used to claim a nonrefundable
credit other than the child tax credit or the credit for other dependents, such as the foreign tax credit,
education credits, or general business credit.
Schedule 4 Other Taxes - Answer-Schedule ___________ reports other taxes, such as self-employment
tax, household employment taxes, additional tax on IRAs or other qualified retirement plans and tax-
favored accounts.
,Schedule 5: Other Payments and Refundable Credits - Answer-Schedule _________ is used to claim a
refundable credit other than the earned income credit, American opportunity credit, or additional child
tax credit.
Form 4562 - Answer-Form _________ reports deductions for depreciation and amortization as well as
provides information on the business/investment use of automobiles and other listed property.
Form 4797 - Answer-Form ___________ reports the sale or exchange of business property and the
computation of recapture amounts under sections 179 and 280F(b)(2).
Accountant - Answer-An __________________ is a person who is qualified to keep, audit, and inspect
the financial records of individuals or business concerns and prepares financial and tax reports.
Actuary - Answer-An ___________ is a person whose work is to calculate statistically risks, premiums,
and life expectancies for insurance and pension plans.
Attorney - Answer-An ________________ person who is legally qualified and licensed to represent a
person in a legal matter, such as a transaction or lawsuit.
Business Valuator - Answer-A _________________ is an individual who is trained in evaluating and
assigning a value to a business.
Divorce - Answer-A __________________ is the legal proceeding by which a marriage is legally
terminated. It may be contested (where one party denies the allegation or wants to keep the marriage
in place) or uncontested.
Mediator - Answer-A _______________ is an individual who has been trained to assist people in coming
to an agreement, especially one that reconciles differences between disputants.
, Pension Valuator - Answer-A ________________________ is an individual who is qualified to calculate
the value of defined benefit pension plans, such as the marital portion of a plan for the division of assets
in a divorce.
Arbitration - Answer-_________________ is submitting a disputed matter for decision to a person who
is not a judge. The decision of an arbitrator is usually binding and final. Arbitration varies greatly from
mediation.
Best Interest of the Child - Answer-_____________________________ is a discretionary legal standard
used by judges when making decisions about custody, visitation, and support for a child when the
parents are divorcing.
Change of Venue - Answer-A ______________________ is a change of judges or geographical location,
requested by a party to the action who feels that the change is justified by state law.
Collaborative Divorce - Answer-A ____________________________ is a team approach to divorce in
which divorcing couples obtain professional help from specialists in the legal, financial, and mental
health fields; when needed, additional professionals (including child/parenting experts) may be called in
to help the couple settle their case.
Collaborative Law - Answer-_____________________________ is a new dispute resolution model in
which each party retains their own attorney who has gone through specialized
"___________________________" training. The lawyer's only job is to help settle the dispute. All parties
agree to work together respectfully, honestly, and in good faith to try to find "win-win" solutions to the
legitimate needs of both parties. No one may go to court, or even threaten to do so. If that should occur,
the ___________________________ process terminates and both lawyers are disqualified from any
further involvement in the case.
Collusion - Answer-________________ is an agreement between two or more persons where one of
the parties brings false charges against the other. In a divorce case, the husband and wife may agree to
use adultery as a ground in order to obtain divorce more quickly, knowing full well that adultery was not
committed. _________________ is illegal.
