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Test Questions CRPC Module 8
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Test Questions CRPC Module 8
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Test Questions CRPC Module 8The applicable credit amount is the amount of transfer tax on the - ANS-Applicable
exclusion amount which is the amount of taxable transfers a person can make without
actually having to pay gift or a state tax. The first 15,000 indexed annually, given to
anyone in a calendar year is excluded from the donors total gifts as free from tax
How much net capital loss is allowed per year - ANS-$3000 is currently allowed, any
excess is carried over as capital loss. The carryforward losses always retains its
character as long or short term when moved to the next year
What is the taxability of tax exempt market discount bonds - ANS-Any market discount
is taxed as ordinary income upon the sale or redemption of the bond
Examples of tax deferred type of accounts - ANS-Annuity, Keogh, non-deductible IRA
What type of stocks can you invest in that will result in tax deferral - ANS-Investing in
high growth, low dividend paying stock
- ANS-Average cost
Why are dividend reinvestment plans popular - ANS-The ability to purchase additional
shares of stock at a discount. Even though the dividends are reinvested they are
taxable.
Section 121 exclusion - ANS-Unless the taxpayer moves because of a new job, for
health reasons, or do to other unforeseen circumstances, only one exclusion is allowed
with any two years. The taxpayer must have owned and lived in the home for at least
two of the previous five years before the sale. Single taxpayers are allowed an
exclusion of up to $250,000 while married are allowed $500,000
Cash value life insurance - ANS-And example of a tax deferred investment. The build
up of cash surrender value within the contract is a tax deferred.
Distributions from a mutual fund can be made how - ANS-Ordinary dividends,
non-taxable distributions, capital gain distribution's. The ordinary cash dividends may be
subject to preferential long term capital gains
, Basis of stock acquired by gift if the fair market value on the date of the gift is less than
the donors basis - ANS-The basis is not known until the stock is sold
The cost basis of a capital asset is - ANS-It's initial cost adjusted by cost incurred in
buying and owning the asset
What should be addressed in incapacity planning - ANS-Decisions on personal care,
decisions regarding healthcare, decisions regarding management of finances and
property
Wills - ANS-They may designate individuals to administer the will and care for minor
children, they may specify how debt should be paid, they are revocable until death if
competent.
What are possible purposes of probate - ANS-The determination that a person has died,
the determination that a person has died with a valid will, the determination that a
person has died without a valid will.
Intestate succession statutes - ANS-They are controlled by state law, if the decedent
had a surviving spouse, he or she will receive some part of the intestate estate, they
cannot give property to friends of the decedent or charity
What assets are held and will substitute form - ANS-Property held in a revocable
inter-vivos trust, property held as tenants by the entirety, joint property with right of
survivorship. Property held as community property does not have a right of survivorship
feature.
Property held in tenancy in common - ANS-Will be included in the probate estate, more
than two people can on the same property in this manner, each tenet has the right to
transfer his or her interest without the consent of the other tenets
Life insurance in estate planning - ANS-Can be used to provide a state liquidity, to pay
estate taxes, to facilitate the transfer of a business
Characteristic of a gift subject to the federal gift tax - ANS-The donor must receive less
than full value for the property transferred to the Downey, the donor must give up control
over the property, intent is not necessary for the gift to be subject to federal tax. When
the donor receives full value a sale not a gift has occurred and if they donor still controls
the asset he or she still owns it
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