CTFA - Practice Exam #1 Questions & Answers 2024

CTFA - Practice Exam #1 Questions & Answers 2024 "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 immediately 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 policies (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.