1n|nPn an gn e
CRPC PRACTICE EXAM 2|| ALL QUESTIONS AND CORRE
n n n n n n n
CT ANSWERS|| LATEST AND COMPLETE VERSION WITH
n n n n n n n
VERIFIED SOLUTIONS ALREADY GRADED A+|| BRAND n n n n n n
NEW!!!
What is the second step in the retirement planning process? -
n n n n n n n n n n
nANSWER: The second step in the retirement planning process is to gather client da
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ta, including goals and expectations
n n n n
What is the first step in the retirement planning process? -
n n n n n n n n n n
nANSWER: The first step is to establish and define the client-
n n n n n n n n n n
counselor relationship which includes disclosing the counselor's compensation arra
n n n n n n n n
ngement
What is the government health insurance program designed for individuals with low
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income or minimal assets regardless of their age or employment status? -
n n n n n n n n n n n
nANSWER: Medicaid. n
The costs not covered by either Part A or Part B are referred to as what? -
n n n n n n n n n n n n n n n n
ANSWER: Medigaps. Medigap insurance is designed to supplement Medicare's be
n n n n n n n n n n
nefits by filling in some of what medicare does not cover including deductibles and c
n n n n n n n n n n n n n n
o-insurance amounts n
The delivery of Long Term Care generally takes one of two forms. What are they?
n n n n n n n n n n n n n n
- ANSWER: Personal care and Skilled care.
n n n n n n
In order to be considered a "qualified" policy, a long-
n n n n n n n n n
term care policy must provide for what? -
n n n n n n n
nANSWER: Nonforfeiture options, cognitive impairment must be covered, it must b
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e guaranteed renewable and conform to the National Association of Insurance Comm
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issioners Model Act. n n
,2n|nPn an gn e
What is a golden parachute plan? -
n n n n n n
ANSWER: An arrangement between an employer and an executive that will provid
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e the executive with severance benefits if the employer is sold and the new employee
n n n n n n n n n n n n n n
fires the executive.
n n n
If you take a hardship distribution from your TSA, what would be the tax consequen
n n n n n n n n n n n n n n
ces? - n
nANSWER: Hardship withdrawals that are used to pay certain medical expenses wo
n n n n n n n n n n n
uld be subject to income tax but not to the 10% tax penalty.
n n n n n n n n n n n n
What kind of distribution from a 403b would NOT be subject to the 10% premature
n n n n n n n n n n n n n n n
withdrawal penalty? - ANSWER: A QDRO. n n n n n
What kind of distribution would be exempt from the 10% penalty on a qualified plan
n n n n n n n n n n n n n n n
distribution before age 59.5? - n n n n
ANSWER: Substantial equal periodic payments made to a participant following se
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paration of service based on the participants life expectancy.
n n n n n n n n
Are withdrawals from an IRA to pay for qualified expenses exempt from the 10% ea
n n n n n n n n n n n n n n
rly withdrawal penalty? - ANSWER: Yes.
n n n n n
Dan, age 58 has decided to being periodic withdrawals from his IRA. In order to avoi
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d the 10% early withdrawal penalty, distributions must continue until at least what a
n n n n n n n n n n n n n
ge? - n
ANSWER: Age 63. Distributions must continue for at least five years or until the in
n n n n n n n n n n n n n n n
dividual has reached 59.5, whichever is later.
n n n n n n
When is the distribution on a Roth IRA qualified? -
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ANSWER: If the five year holding period has been met and the distribution is made
n n n n n n n n n n n n n n n
after the attainment of age 59.5, death or disability or for the first time purchase of a
n n n n n n n n n n n n n n n n n n
home (max is $10k). n n n
,3n|nPn an gn e
A "rising equity glidepath" typically will lead to a
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equity exposure over n n n
one's total lifetime. - ANSWER: Decreased. Remember: RISING = decrease.
n n n n n n n n n
HIGH = Low. n n
What is the long term capital gain holding period? -
n n n n n n n n n
ANSWER: More than 12 months.
n n n n n
Net short-term capital gains are treated as what type of income? - ANSWER:
n n n n n n n n n n n n
Ordinary. They are subject to the taxpayers regular marginal tax rate.
n n n n n n n n n n
How much can a single person exclude on the sale of their home? -
n n n n n n n n n n n n n
nANSWER: Up to $250,000.00, provided the home has been used as the principal res
n n n n n n n n n n n n n
idence for two of the previous five years.
n n n n n n n
A partial exclusion is available if the two year rule is not met due to health, job or oth
n n n n n n n n n n n n n n n n n n
er unforeseen circumstances.
n n
What can a will NOT be used for? -
n n n n n n n n
ANSWER: Planning for incapacity, avoiding probate, or to transfer assets during t
n n n n n n n n n n n n
he life of the owner.
n n n n
Wills, beneficiary designations, and correct titling of property can all accomplish w
n n n n n n n n n n n
hat when it comes to estate planning goals? -
n n n n n n n n
ANSWER: Assure that property is distributed according to the owner's wishes.
n n n n n n n n n n n
What is the duty to disclose? -
n n n n n n
ANSWER: Requires you to explain the risks of investments sold to clients even those b
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acked by the US government.
n n n n
What is the duty to diagnose? -
n n n n n n
ANSWER: Includes knowing the customer and making sure that the investment recom
n n n n n n n n n n n n
mendations are suitable for the customer. n n n n n
, 4n|nPn an gn e
Why is owning property in joint tenancy with right of survivorship a will substitute?
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- ANSWER: Because the property passes outside of probate.
n n n n n n n n
Intestate property passes by means of what? -
n n n n n n n
nANSWER: The probate process. It is NOT a will substitute. Property that passes by
n n n n n n n n n n n n n
nthe laws of intestate succession is not affected y any will provisions. Intestate succe
n n n n n n n n n n n n n
ssion statues give property to many other family members before transferring it to th
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e state.
n
The donee's basis in gifted property is determined by what valuation? -
n n n n n n n n n n n
nANSWER: The donor's adjusted basis in the property at the time of the gift if the pro
n n n n n n n n n n n n n n n n
perty has appreciated in value while owned by the donor AND the property's Fair Ma
n n n n n n n n n n n n n n
rket Value at the time of the gift if this value is less than the donor's adjusted basis and
n n n n n n n n n n n n n n n n n n
nthe property is sold at a loss.
n n n n n n
What is a characteristic of the unified tax system that is NOT common to both federa
n n n n n n n n n n n n n n n
l gift taxation and federal estate taxation? -
n n n n n n n
nANSWER: Availability of the annual exclusion amount. n n n n n n
What must a donor do for the federal gift tax to apply? -
n n n n n n n n n n n n
ANSWER: They must give up control of the property.
n n n n n n n n n
What is the Federal Gift Tax exclusion and what must someone do to qualify for it? -
n n n n n n n n n n n n n n n n
nANSWER: It is the maximum amount of present interest gifts allowed per donee pe
n n n n n n n n n n n n n
r year or the actual amount given to the donee, whichever is less. To qualify, a donor
n n n n n n n n n n n n n n n n n
must make a completed gift of a PRESENT interest which may be either partial or w
n n n n n n n n n n n n n n n
hole.
Sequence of return risk is thought to have the most potential impact on an individual
n n n n n n n n n n n n n n n
who has what? -
n n n
ANSWER: Just retired and begun distributions from his or her account.
n n n n n n n n n n n
CRPC PRACTICE EXAM 2|| ALL QUESTIONS AND CORRE
n n n n n n n
CT ANSWERS|| LATEST AND COMPLETE VERSION WITH
n n n n n n n
VERIFIED SOLUTIONS ALREADY GRADED A+|| BRAND n n n n n n
NEW!!!
What is the second step in the retirement planning process? -
n n n n n n n n n n
nANSWER: The second step in the retirement planning process is to gather client da
n n n n n n n n n n n n n
ta, including goals and expectations
n n n n
What is the first step in the retirement planning process? -
n n n n n n n n n n
nANSWER: The first step is to establish and define the client-
n n n n n n n n n n
counselor relationship which includes disclosing the counselor's compensation arra
n n n n n n n n
ngement
What is the government health insurance program designed for individuals with low
n n n n n n n n n n n n
income or minimal assets regardless of their age or employment status? -
n n n n n n n n n n n
nANSWER: Medicaid. n
The costs not covered by either Part A or Part B are referred to as what? -
n n n n n n n n n n n n n n n n
ANSWER: Medigaps. Medigap insurance is designed to supplement Medicare's be
n n n n n n n n n n
nefits by filling in some of what medicare does not cover including deductibles and c
n n n n n n n n n n n n n n
o-insurance amounts n
The delivery of Long Term Care generally takes one of two forms. What are they?
n n n n n n n n n n n n n n
- ANSWER: Personal care and Skilled care.
n n n n n n
In order to be considered a "qualified" policy, a long-
n n n n n n n n n
term care policy must provide for what? -
n n n n n n n
nANSWER: Nonforfeiture options, cognitive impairment must be covered, it must b
n n n n n n n n n n
e guaranteed renewable and conform to the National Association of Insurance Comm
n n n n n n n n n n n
issioners Model Act. n n
,2n|nPn an gn e
What is a golden parachute plan? -
n n n n n n
ANSWER: An arrangement between an employer and an executive that will provid
n n n n n n n n n n n n
e the executive with severance benefits if the employer is sold and the new employee
n n n n n n n n n n n n n n
fires the executive.
n n n
If you take a hardship distribution from your TSA, what would be the tax consequen
n n n n n n n n n n n n n n
ces? - n
nANSWER: Hardship withdrawals that are used to pay certain medical expenses wo
n n n n n n n n n n n
uld be subject to income tax but not to the 10% tax penalty.
n n n n n n n n n n n n
What kind of distribution from a 403b would NOT be subject to the 10% premature
n n n n n n n n n n n n n n n
withdrawal penalty? - ANSWER: A QDRO. n n n n n
What kind of distribution would be exempt from the 10% penalty on a qualified plan
n n n n n n n n n n n n n n n
distribution before age 59.5? - n n n n
ANSWER: Substantial equal periodic payments made to a participant following se
n n n n n n n n n n n
paration of service based on the participants life expectancy.
n n n n n n n n
Are withdrawals from an IRA to pay for qualified expenses exempt from the 10% ea
n n n n n n n n n n n n n n
rly withdrawal penalty? - ANSWER: Yes.
n n n n n
Dan, age 58 has decided to being periodic withdrawals from his IRA. In order to avoi
n n n n n n n n n n n n n n n
d the 10% early withdrawal penalty, distributions must continue until at least what a
n n n n n n n n n n n n n
ge? - n
ANSWER: Age 63. Distributions must continue for at least five years or until the in
n n n n n n n n n n n n n n n
dividual has reached 59.5, whichever is later.
n n n n n n
When is the distribution on a Roth IRA qualified? -
n n n n n n n n n
ANSWER: If the five year holding period has been met and the distribution is made
n n n n n n n n n n n n n n n
after the attainment of age 59.5, death or disability or for the first time purchase of a
n n n n n n n n n n n n n n n n n n
home (max is $10k). n n n
,3n|nPn an gn e
A "rising equity glidepath" typically will lead to a
n n n n n n n n n
equity exposure over n n n
one's total lifetime. - ANSWER: Decreased. Remember: RISING = decrease.
n n n n n n n n n
HIGH = Low. n n
What is the long term capital gain holding period? -
n n n n n n n n n
ANSWER: More than 12 months.
n n n n n
Net short-term capital gains are treated as what type of income? - ANSWER:
n n n n n n n n n n n n
Ordinary. They are subject to the taxpayers regular marginal tax rate.
n n n n n n n n n n
How much can a single person exclude on the sale of their home? -
n n n n n n n n n n n n n
nANSWER: Up to $250,000.00, provided the home has been used as the principal res
n n n n n n n n n n n n n
idence for two of the previous five years.
n n n n n n n
A partial exclusion is available if the two year rule is not met due to health, job or oth
n n n n n n n n n n n n n n n n n n
er unforeseen circumstances.
n n
What can a will NOT be used for? -
n n n n n n n n
ANSWER: Planning for incapacity, avoiding probate, or to transfer assets during t
n n n n n n n n n n n n
he life of the owner.
n n n n
Wills, beneficiary designations, and correct titling of property can all accomplish w
n n n n n n n n n n n
hat when it comes to estate planning goals? -
n n n n n n n n
ANSWER: Assure that property is distributed according to the owner's wishes.
n n n n n n n n n n n
What is the duty to disclose? -
n n n n n n
ANSWER: Requires you to explain the risks of investments sold to clients even those b
n n n n n n n n n n n n n n n
acked by the US government.
n n n n
What is the duty to diagnose? -
n n n n n n
ANSWER: Includes knowing the customer and making sure that the investment recom
n n n n n n n n n n n n
mendations are suitable for the customer. n n n n n
, 4n|nPn an gn e
Why is owning property in joint tenancy with right of survivorship a will substitute?
n n n n n n n n n n n n n n
- ANSWER: Because the property passes outside of probate.
n n n n n n n n
Intestate property passes by means of what? -
n n n n n n n
nANSWER: The probate process. It is NOT a will substitute. Property that passes by
n n n n n n n n n n n n n
nthe laws of intestate succession is not affected y any will provisions. Intestate succe
n n n n n n n n n n n n n
ssion statues give property to many other family members before transferring it to th
n n n n n n n n n n n n n
e state.
n
The donee's basis in gifted property is determined by what valuation? -
n n n n n n n n n n n
nANSWER: The donor's adjusted basis in the property at the time of the gift if the pro
n n n n n n n n n n n n n n n n
perty has appreciated in value while owned by the donor AND the property's Fair Ma
n n n n n n n n n n n n n n
rket Value at the time of the gift if this value is less than the donor's adjusted basis and
n n n n n n n n n n n n n n n n n n
nthe property is sold at a loss.
n n n n n n
What is a characteristic of the unified tax system that is NOT common to both federa
n n n n n n n n n n n n n n n
l gift taxation and federal estate taxation? -
n n n n n n n
nANSWER: Availability of the annual exclusion amount. n n n n n n
What must a donor do for the federal gift tax to apply? -
n n n n n n n n n n n n
ANSWER: They must give up control of the property.
n n n n n n n n n
What is the Federal Gift Tax exclusion and what must someone do to qualify for it? -
n n n n n n n n n n n n n n n n
nANSWER: It is the maximum amount of present interest gifts allowed per donee pe
n n n n n n n n n n n n n
r year or the actual amount given to the donee, whichever is less. To qualify, a donor
n n n n n n n n n n n n n n n n n
must make a completed gift of a PRESENT interest which may be either partial or w
n n n n n n n n n n n n n n n
hole.
Sequence of return risk is thought to have the most potential impact on an individual
n n n n n n n n n n n n n n n
who has what? -
n n n
ANSWER: Just retired and begun distributions from his or her account.
n n n n n n n n n n n
