CDFA Exam Study Materials with Complete
Solutions
______________________ are the testimony of a witness taken out of court under oath
and reduced to writing after discovery and prior to trial. The
____________________________ may be used to discredit a witness if he changes his
testimony during trial. - ANSWER-depositions, deposition
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)].
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)].
A _______________________ tax carryforwards affects the basis of an asset upon
transfer in a divorce. - ANSWER-passive activity loss
A CDFA professional's work product is never protected by attorney-client privilege when
working in a __________________________. - ANSWER-pro se divorce
A loss on the sale of a primary residence or personal vacation property
_____________________ deductible. If the vacation property is a rental instead of for
personal use, then the loss __________________________. - ANSWER-would not be,
would be deductible
A net operating loss _________________ affect the basis of the business. - ANSWER-
does not
A taxpayer filing as Married Filing Separately does not qualify for the
__________________ credit. - ANSWER-childcare
A valid prenuptial agreement __________________ waive either party's right to apply
for and receive Social Security benefits. - ANSWER-cannot
According to statistics, approximately how many divorce cases use the "pro se"
approach to settlement? - ANSWER-50%
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.
,Acting as an __________________________ provides a measure of privilege. -
ANSWER-attorney's consultant
Actuary - ANSWER-An ___________ is a person whose work is to calculate statistically
risks, premiums, and life expectancies for insurance and pension plans.
Additionally - ANSWER-Section 71 requires that if the payor of alimony wants to deduct
alimony payments over $15,000 per year, payments must last for at least three years. If
this requirement is not met, payments are subject to recapture rules.
An _________________________ is not an advocate. ________________________ is
the advocate. - ANSWER-expert witness, your client's attorney
An immediate distribution may or may not be referenced in the QDRO but it is
___________________________. - ANSWER-not a requirement
Appraisal - ANSWER-______________________ is the procedure for determining the
fair market value of an asset when it is to be sold or divided as part of the divorce
process.
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.
Arrearages - ANSWER-The difference between the amount of spousal or child support
paid, if any, and the amount required under court order.
As the interest rate _____________________, the present value of the pension will
decline, and as the interest rate ___________________, the value of the pension will
increase. - ANSWER-increases, declines
Asset Inventory - ANSWER-____________________ is a collection of financial data
that includes information on assets and liabilities. Key documents used are the Financial
Affidavit and Asset and Liability Comparison worksheet.
Assets - ANSWER-________________ are cash, property, investments, goodwill, and
other items of value (as defined by state law) that appear on a balance sheet indicating
the net worth of an individual or a business.
Assume that Tom violates the Six-Month Rule by stopping spousal support payments to
Eva the year that Grayson reaches emancipation age. When will re-characterization of
the spousal support payments take effect? - ANSWER-Retroactive to the beginning of
the spousal support payments.
, Attorney - ANSWER-An ________________ person who is legally qualified and
licensed to represent a person in a legal matter, such as a transaction or lawsuit.
Attorneys are also cognizant of _____________________ in each jurisdiction (or
county) that the court or judges commonly use. - ANSWER-local customs
Be aware that the denial of spousal support treatment is based on whether a reduction
is scheduled to occur upon the happening of an event related to the child—regardless of
_____________________________________. - ANSWER-whether the event is likely
to occur.
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.
Beth saves $100 of her paycheck every month. She puts this money into an account
under her name only, and now it is worth $2,600. At her divorce, is this money separate
or marital property? - ANSWER-It is marital property because it was acquired during the
marriage, regardless of whose name is on the account.
Bring only essential documents to the witness stand. Do not bring anything else to the
stand unless other documents—or your entire file— are subpoenaed. Your file is subject
to ________________________________________. - ANSWER-examination if you
bring it to the stand.
Bunching Deductions - ANSWER-Tax strategy that involves "bunching" itemized
deductions so that they are high in one year and low the following year. The standard
deduction can be used on the alternate year.
Business Valuator - ANSWER-A _________________ is an individual who is trained in
evaluating and assigning a value to a business.
Calculating spousal support comes _________ the property is divided. The reason for
this is that support can be based on the amount of _________________________, so it
is important to look first at the property division. - ANSWER-after, property received
Capital Gain - ANSWER-A profit from the sale of a property or investment.
Career Assets - ANSWER-______________________ are tied to one's career (e.g.,
health insurance, stock options, retirement plans, etc.)
Certain debts cannot be discharged in bankruptcy. These include: - ANSWER-child
support, spousal support, some student loans, and recent taxes.
Solutions
______________________ are the testimony of a witness taken out of court under oath
and reduced to writing after discovery and prior to trial. The
____________________________ may be used to discredit a witness if he changes his
testimony during trial. - ANSWER-depositions, deposition
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)].
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)].
A _______________________ tax carryforwards affects the basis of an asset upon
transfer in a divorce. - ANSWER-passive activity loss
A CDFA professional's work product is never protected by attorney-client privilege when
working in a __________________________. - ANSWER-pro se divorce
A loss on the sale of a primary residence or personal vacation property
_____________________ deductible. If the vacation property is a rental instead of for
personal use, then the loss __________________________. - ANSWER-would not be,
would be deductible
A net operating loss _________________ affect the basis of the business. - ANSWER-
does not
A taxpayer filing as Married Filing Separately does not qualify for the
__________________ credit. - ANSWER-childcare
A valid prenuptial agreement __________________ waive either party's right to apply
for and receive Social Security benefits. - ANSWER-cannot
According to statistics, approximately how many divorce cases use the "pro se"
approach to settlement? - ANSWER-50%
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.
,Acting as an __________________________ provides a measure of privilege. -
ANSWER-attorney's consultant
Actuary - ANSWER-An ___________ is a person whose work is to calculate statistically
risks, premiums, and life expectancies for insurance and pension plans.
Additionally - ANSWER-Section 71 requires that if the payor of alimony wants to deduct
alimony payments over $15,000 per year, payments must last for at least three years. If
this requirement is not met, payments are subject to recapture rules.
An _________________________ is not an advocate. ________________________ is
the advocate. - ANSWER-expert witness, your client's attorney
An immediate distribution may or may not be referenced in the QDRO but it is
___________________________. - ANSWER-not a requirement
Appraisal - ANSWER-______________________ is the procedure for determining the
fair market value of an asset when it is to be sold or divided as part of the divorce
process.
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.
Arrearages - ANSWER-The difference between the amount of spousal or child support
paid, if any, and the amount required under court order.
As the interest rate _____________________, the present value of the pension will
decline, and as the interest rate ___________________, the value of the pension will
increase. - ANSWER-increases, declines
Asset Inventory - ANSWER-____________________ is a collection of financial data
that includes information on assets and liabilities. Key documents used are the Financial
Affidavit and Asset and Liability Comparison worksheet.
Assets - ANSWER-________________ are cash, property, investments, goodwill, and
other items of value (as defined by state law) that appear on a balance sheet indicating
the net worth of an individual or a business.
Assume that Tom violates the Six-Month Rule by stopping spousal support payments to
Eva the year that Grayson reaches emancipation age. When will re-characterization of
the spousal support payments take effect? - ANSWER-Retroactive to the beginning of
the spousal support payments.
, Attorney - ANSWER-An ________________ person who is legally qualified and
licensed to represent a person in a legal matter, such as a transaction or lawsuit.
Attorneys are also cognizant of _____________________ in each jurisdiction (or
county) that the court or judges commonly use. - ANSWER-local customs
Be aware that the denial of spousal support treatment is based on whether a reduction
is scheduled to occur upon the happening of an event related to the child—regardless of
_____________________________________. - ANSWER-whether the event is likely
to occur.
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.
Beth saves $100 of her paycheck every month. She puts this money into an account
under her name only, and now it is worth $2,600. At her divorce, is this money separate
or marital property? - ANSWER-It is marital property because it was acquired during the
marriage, regardless of whose name is on the account.
Bring only essential documents to the witness stand. Do not bring anything else to the
stand unless other documents—or your entire file— are subpoenaed. Your file is subject
to ________________________________________. - ANSWER-examination if you
bring it to the stand.
Bunching Deductions - ANSWER-Tax strategy that involves "bunching" itemized
deductions so that they are high in one year and low the following year. The standard
deduction can be used on the alternate year.
Business Valuator - ANSWER-A _________________ is an individual who is trained in
evaluating and assigning a value to a business.
Calculating spousal support comes _________ the property is divided. The reason for
this is that support can be based on the amount of _________________________, so it
is important to look first at the property division. - ANSWER-after, property received
Capital Gain - ANSWER-A profit from the sale of a property or investment.
Career Assets - ANSWER-______________________ are tied to one's career (e.g.,
health insurance, stock options, retirement plans, etc.)
Certain debts cannot be discharged in bankruptcy. These include: - ANSWER-child
support, spousal support, some student loans, and recent taxes.
