Mastering the CRPC: Your Essential Guide to
Effective Sample Tests and Study Strategies
A Comprehensive CRPC Sample Tests
Current Updated Exam Study Guide 2025/2026.
Gift splitting - ansAllows a married couple to double their allowable annual exclusions is
only allowed for married couples
Ownership limited to spouses only - ansJoint tenancy tenancy by the entirety community
property
Grantor retained interest Trust Grit - ansGrantor can receive all income earned by the trust
Qualified terminable interest Property Trust Q-tip - ansIncome of a Q-tip goes to the grantor's
spouse
Charitable lead Trust CLT - ansThe income goes to charity
Power of appointment trust POA - ansIncome goes to the grantor's spouse
Valuation date for gifts - ansThe date on which the transfer is completed
Gross estate - ansIncludes 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 - ansQualified dividends are subject to the
same tax rates applicable to long-term capital gains
The basis for charitable contribution deduction for stock - ansBased on the current fair market
value of the stock
Taxation of substitute payments in lieu of a dividend - ansSubstitute 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 - ansThe basis is reduced to provide basis for shares
are received as a stock dividend
Net capital loss amount - ans$3,000 per year are deductible
Taxation of qualified dividends - ansDividends 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 - ansThe 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 - ansIt is taxed in the year when the check was received
Medical expenses and AMT - ansMost that are deducted are allowed for AMT purposes 10%
of AGI
Bargain element on exercise of an incentive stock option and AMT - ansIncluded as a
preference item for AMT
Private activity municipal bonds and AMT - ansInterest from private activity Muni bonds is
an AMT preference item except for bonds issued in 2009 and 2010
Home mortgage interest and AMT - ansHome mortgage interest is allowed for regular and
AMT
Adjusted gross income - ansIncome remaining after subtracting the adjustments to income
Domestic Partners transfer wealth to the other vs legal spouse - ansGovernor domestic
partner cannot take a marital deduction in excess of the gift tax annual exclusion for the
transfer while a donor spouse could
,Mastering the CRPC: Your Essential Guide to
Effective Sample Tests and Study Strategies
A Comprehensive CRPC Sample Tests
Current Updated Exam Study Guide 2025/2026.
If a domestic partner is appointed as conservator or Guardian - ansThe 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 - ans8%
Qlac - ansSuitable 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 - ans...
Proper written Financial goal - ansSpecific in terms of gold dollar amount and time frame
Income replacement percentages - ansIncome 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 - ansLong-term perspective. Realistic. Clearly defined.
Asset allocation strategies - ansTactical. Core satellite. Strategic
Correlation and diversification - ansThe lowest correlation provides the most diversification
Two major risks associated with Common Stocks - ansMarket risk and business risk
Two major risks associated with Bond investing - ansInterest rate risk and purchasing power
risk
Calculating yield to maturity on the calculator - ansSet the end mode
Allowable earnings limit for 2015 for no reduction in Social Security benefits - ans$15,720
earned income
Social Security benefits available when fully insured worker begins at full retirement age -
ansAt 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 - ansAll 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 - ansWrite a predetermined fix retirement benefit for
participating employees
Do Target benefit plans offer Survivor annuity benefits to married participants - ansQualified
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 - ansA 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
,Mastering the CRPC: Your Essential Guide to
Effective Sample Tests and Study Strategies
A Comprehensive CRPC Sample Tests
Current Updated Exam Study Guide 2025/2026.
plan. some Deferred Compensation Plan provide additional benefits such as benefits for
disability
Similarity between qualified and non-qualified plans - ansThey must enable the employee to
defer taxation on the plan funds until retirement
What can affect the retirement benefits in a defined contribution plan - ansThe actual
investment returns. The value of the participants individual account balance at retirement
Which allocations are permitted in a qualified profit sharing / 401K plan - ansInvestment
earnings allocated in proportion to relative account balances and employer contributions to
the profit sharing plan allocated in proportion to relative compensation
Describe the limits that apply to qualified defined contribution plans - ansAnnual limit is the
lesser of 100% of pay or $53,000. Employer deduction limit is 25% for profit sharing plans,
money purchase plans, Target plans, have multiple defined-contribution plans. The annual
additions limit for a participant and multiple defined-contribution plans of the employer or
related employers must also be aggregated
Defined contribution is good for - ansCompanies with uncertain cash flow Outlook,
employees at young age, and retirement savings needs within contribution limits
Target benefit plans are good for - ansIt would skew contribution allocations to older
employees. Although the uncertainty of the amount of retirement benefit is a drawback.
Target benefit plans do not allow 401 k elective deferrals and employer contributions are
limited to 25 not 15% of covered payroll
What plan is good for a new business with fluctuating cash flow and key employees who are
older than the rank-and-file - ansAn age weighted formula can be used by a profit sharing
plan
What type of qualified plan is most appropriate for motivating younger lower-paid employees
and improving company performance - ansProfit sharing plan can reward employees for
helping to increase company profits. 401K contributions might not be affordable
Legal requirements of profit sharing plans - ansForfeitures must be used to reduce employer
contributions or be reallocated to remaining participants. Employer deductions for plan
contributions are limited to 25% of participants total compensation. Allocations to report
suspense account cannot exceed the lesser of a hundred percent of compensation or $53,000
Legal requirements of money purchase pension plans - ansThe plan must provide a definite
and non discretionary employer contribution formula. Forfeitures can be reallocated to the
remaining participants account and a non-discriminatory Mater are used to reduce employer
contributions. A separate employer contribution account must be maintained for each
participant. It does not have to specify a specific retirement benefit
Basic provisions of money purchase pension plan - ansEmployer May deduct for a planned
up to a maximum of 25% of cover payroll. The employer contribution generally is allocated
based on relative compensation. And is subject to minimum funding requirements it is a
, Mastering the CRPC: Your Essential Guide to
Effective Sample Tests and Study Strategies
A Comprehensive CRPC Sample Tests
Current Updated Exam Study Guide 2025/2026.
defined contribution plan the plan May provide for forfeiture is either to be reallocated to
remaining participants accounts are applied to reduce the employer contribution
Basic provisions of Target benefit plans - ansFind contribution. Participants bear the risk of
investment results. The employee deduction for contributions is limited to 25% of covered
payroll. Unlike other defined-contribution plans Target benefit plans favorite older
participants because the contribution allocations are skewed to revive the faster funding
necessary for older participants with fewer years remaining until retirement
The company has payroll of 800000 what is the maximum contribution to integrated profit
sharing plan - ans$200,000 which is 25% of cover payroll
Compare a 457 plan and a tax-sheltered annuity - ansBoth plans are based on contracts with
employer. Both plans are subject to a $18,000 limit. Both plans are subject to rollover rules
that are similar to the requirements that apply to qualified plans. Both 403b and TSA and
section 457 plans are based on contracts with employer. Both plans are also subject to
rollover rules. However 457 plans are available to employees of state and local governments
not just employees of public school system as a section 501 c 3 tax-exempt organizations
Tax consequences to employer and employee under a non-qualified plan - ansAn employer
will not receive a deduction for contributions until the employee recognizes income upon
receipt. Payer gets the deduction only when benefits become taxable income to the participant
when they are received or constructively received.
Spouse makes $153 the other $111,000 and has a qualified plan how much can you contribute
to an IRA - ansThey can each contribute $5,500 the combined contribution cannot exceed the
total compensation about spouses
If one spouse has a retirement plan at work can the other spouse still fully deduct Ira
contributions - ansYes unless the couple's combined AGI exceeds 183000 phasing out to
$193,000 in 2015
Nonqualified deferred compensation example of substantial risk of forfeiture provisions -
ansPotential risk of forfeiture requires that the employee's right to receive benefits is
contingent upon performance of substantial Services death and disability do not create
substantial risk of forfeiture since they do not involve performance of services
A characteristic of an unfunded excess Benefit Plan - ansUnfunded excess benefit plans need
not comply with either the disclosure or reporting requirements of erisa
Taxation of a funded Deferred Compensation Plan - ansWill be taxable to an employee if
nonforfeitable. Unless the plan benefits are subject to substantial risk of forfeiture Provisions
contributions to a funded nonqualified Deferred Compensation Plan will be constructively
received by the participant and subject to tax
Characteristics of unfunded supplemental executive retirement plans - ansThe employee has
no securing rights and the benefits to be paid. These plans are often referred to as Top Hat
plans because they provided to top Executives of the company. SERPs provide no security to
the employees and unfunded serp is also often referred to as a top-hat plan the employee has
Effective Sample Tests and Study Strategies
A Comprehensive CRPC Sample Tests
Current Updated Exam Study Guide 2025/2026.
Gift splitting - ansAllows a married couple to double their allowable annual exclusions is
only allowed for married couples
Ownership limited to spouses only - ansJoint tenancy tenancy by the entirety community
property
Grantor retained interest Trust Grit - ansGrantor can receive all income earned by the trust
Qualified terminable interest Property Trust Q-tip - ansIncome of a Q-tip goes to the grantor's
spouse
Charitable lead Trust CLT - ansThe income goes to charity
Power of appointment trust POA - ansIncome goes to the grantor's spouse
Valuation date for gifts - ansThe date on which the transfer is completed
Gross estate - ansIncludes 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 - ansQualified dividends are subject to the
same tax rates applicable to long-term capital gains
The basis for charitable contribution deduction for stock - ansBased on the current fair market
value of the stock
Taxation of substitute payments in lieu of a dividend - ansSubstitute 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 - ansThe basis is reduced to provide basis for shares
are received as a stock dividend
Net capital loss amount - ans$3,000 per year are deductible
Taxation of qualified dividends - ansDividends 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 - ansThe 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 - ansIt is taxed in the year when the check was received
Medical expenses and AMT - ansMost that are deducted are allowed for AMT purposes 10%
of AGI
Bargain element on exercise of an incentive stock option and AMT - ansIncluded as a
preference item for AMT
Private activity municipal bonds and AMT - ansInterest from private activity Muni bonds is
an AMT preference item except for bonds issued in 2009 and 2010
Home mortgage interest and AMT - ansHome mortgage interest is allowed for regular and
AMT
Adjusted gross income - ansIncome remaining after subtracting the adjustments to income
Domestic Partners transfer wealth to the other vs legal spouse - ansGovernor domestic
partner cannot take a marital deduction in excess of the gift tax annual exclusion for the
transfer while a donor spouse could
,Mastering the CRPC: Your Essential Guide to
Effective Sample Tests and Study Strategies
A Comprehensive CRPC Sample Tests
Current Updated Exam Study Guide 2025/2026.
If a domestic partner is appointed as conservator or Guardian - ansThe 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 - ans8%
Qlac - ansSuitable 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 - ans...
Proper written Financial goal - ansSpecific in terms of gold dollar amount and time frame
Income replacement percentages - ansIncome 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 - ansLong-term perspective. Realistic. Clearly defined.
Asset allocation strategies - ansTactical. Core satellite. Strategic
Correlation and diversification - ansThe lowest correlation provides the most diversification
Two major risks associated with Common Stocks - ansMarket risk and business risk
Two major risks associated with Bond investing - ansInterest rate risk and purchasing power
risk
Calculating yield to maturity on the calculator - ansSet the end mode
Allowable earnings limit for 2015 for no reduction in Social Security benefits - ans$15,720
earned income
Social Security benefits available when fully insured worker begins at full retirement age -
ansAt 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 - ansAll 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 - ansWrite a predetermined fix retirement benefit for
participating employees
Do Target benefit plans offer Survivor annuity benefits to married participants - ansQualified
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 - ansA 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
,Mastering the CRPC: Your Essential Guide to
Effective Sample Tests and Study Strategies
A Comprehensive CRPC Sample Tests
Current Updated Exam Study Guide 2025/2026.
plan. some Deferred Compensation Plan provide additional benefits such as benefits for
disability
Similarity between qualified and non-qualified plans - ansThey must enable the employee to
defer taxation on the plan funds until retirement
What can affect the retirement benefits in a defined contribution plan - ansThe actual
investment returns. The value of the participants individual account balance at retirement
Which allocations are permitted in a qualified profit sharing / 401K plan - ansInvestment
earnings allocated in proportion to relative account balances and employer contributions to
the profit sharing plan allocated in proportion to relative compensation
Describe the limits that apply to qualified defined contribution plans - ansAnnual limit is the
lesser of 100% of pay or $53,000. Employer deduction limit is 25% for profit sharing plans,
money purchase plans, Target plans, have multiple defined-contribution plans. The annual
additions limit for a participant and multiple defined-contribution plans of the employer or
related employers must also be aggregated
Defined contribution is good for - ansCompanies with uncertain cash flow Outlook,
employees at young age, and retirement savings needs within contribution limits
Target benefit plans are good for - ansIt would skew contribution allocations to older
employees. Although the uncertainty of the amount of retirement benefit is a drawback.
Target benefit plans do not allow 401 k elective deferrals and employer contributions are
limited to 25 not 15% of covered payroll
What plan is good for a new business with fluctuating cash flow and key employees who are
older than the rank-and-file - ansAn age weighted formula can be used by a profit sharing
plan
What type of qualified plan is most appropriate for motivating younger lower-paid employees
and improving company performance - ansProfit sharing plan can reward employees for
helping to increase company profits. 401K contributions might not be affordable
Legal requirements of profit sharing plans - ansForfeitures must be used to reduce employer
contributions or be reallocated to remaining participants. Employer deductions for plan
contributions are limited to 25% of participants total compensation. Allocations to report
suspense account cannot exceed the lesser of a hundred percent of compensation or $53,000
Legal requirements of money purchase pension plans - ansThe plan must provide a definite
and non discretionary employer contribution formula. Forfeitures can be reallocated to the
remaining participants account and a non-discriminatory Mater are used to reduce employer
contributions. A separate employer contribution account must be maintained for each
participant. It does not have to specify a specific retirement benefit
Basic provisions of money purchase pension plan - ansEmployer May deduct for a planned
up to a maximum of 25% of cover payroll. The employer contribution generally is allocated
based on relative compensation. And is subject to minimum funding requirements it is a
, Mastering the CRPC: Your Essential Guide to
Effective Sample Tests and Study Strategies
A Comprehensive CRPC Sample Tests
Current Updated Exam Study Guide 2025/2026.
defined contribution plan the plan May provide for forfeiture is either to be reallocated to
remaining participants accounts are applied to reduce the employer contribution
Basic provisions of Target benefit plans - ansFind contribution. Participants bear the risk of
investment results. The employee deduction for contributions is limited to 25% of covered
payroll. Unlike other defined-contribution plans Target benefit plans favorite older
participants because the contribution allocations are skewed to revive the faster funding
necessary for older participants with fewer years remaining until retirement
The company has payroll of 800000 what is the maximum contribution to integrated profit
sharing plan - ans$200,000 which is 25% of cover payroll
Compare a 457 plan and a tax-sheltered annuity - ansBoth plans are based on contracts with
employer. Both plans are subject to a $18,000 limit. Both plans are subject to rollover rules
that are similar to the requirements that apply to qualified plans. Both 403b and TSA and
section 457 plans are based on contracts with employer. Both plans are also subject to
rollover rules. However 457 plans are available to employees of state and local governments
not just employees of public school system as a section 501 c 3 tax-exempt organizations
Tax consequences to employer and employee under a non-qualified plan - ansAn employer
will not receive a deduction for contributions until the employee recognizes income upon
receipt. Payer gets the deduction only when benefits become taxable income to the participant
when they are received or constructively received.
Spouse makes $153 the other $111,000 and has a qualified plan how much can you contribute
to an IRA - ansThey can each contribute $5,500 the combined contribution cannot exceed the
total compensation about spouses
If one spouse has a retirement plan at work can the other spouse still fully deduct Ira
contributions - ansYes unless the couple's combined AGI exceeds 183000 phasing out to
$193,000 in 2015
Nonqualified deferred compensation example of substantial risk of forfeiture provisions -
ansPotential risk of forfeiture requires that the employee's right to receive benefits is
contingent upon performance of substantial Services death and disability do not create
substantial risk of forfeiture since they do not involve performance of services
A characteristic of an unfunded excess Benefit Plan - ansUnfunded excess benefit plans need
not comply with either the disclosure or reporting requirements of erisa
Taxation of a funded Deferred Compensation Plan - ansWill be taxable to an employee if
nonforfeitable. Unless the plan benefits are subject to substantial risk of forfeiture Provisions
contributions to a funded nonqualified Deferred Compensation Plan will be constructively
received by the participant and subject to tax
Characteristics of unfunded supplemental executive retirement plans - ansThe employee has
no securing rights and the benefits to be paid. These plans are often referred to as Top Hat
plans because they provided to top Executives of the company. SERPs provide no security to
the employees and unfunded serp is also often referred to as a top-hat plan the employee has
