Quizshow taxplanning-120426000013-phpapp01

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  • Quizshow taxplanning-120426000013-phpapp01

    1. 1. Quiz Show Taxes & Retirement Donna M. Kesot, CPCU CPCU 556 Annuities April 25, 2012
    2. 2. Generally, creation of a formal irrevocable trust into which the donor(as grantor of the trust) places property that is subject to the trust
    3. 3. Generally, creation of a formal irrevocable trust into which the donor(as grantor of the trust) places property that is subject to the trust Charitable Remainder Trust
    4. 4. Generally, creation of a formal irrevocable trust into which the donor(as grantor of the trust) places property that is subject to the trust Charitable Remainder Trust Aka CRT
    5. 5. Generally, creation of a formal irrevocable trust into which the donor(as grantor of the trust) places property that is subject to the trust Charitable Remainder Trust Aka CRT 2 types:
    6. 6. Generally, creation of a formal irrevocable trust into which the donor(as grantor of the trust) places property that is subject to the trust Charitable Remainder Trust Aka CRT 2 types: 1. CRUT Charitable Remainder Unitrust(5-50% of each year’s current value, up to 20 years)
    7. 7. Generally, creation of a formal irrevocable trust into which the donor(as grantor of the trust) places property that is subject to the trust Charitable Remainder Trust Aka CRT 2 types: 1. CRUT Charitable Remainder Unitrust(5-50% of each year’s current value, up to 20 years) 2. CRAT Charitable Remainder Annuity Trust (5—50%, calculated on the initial value of the property)
    8. 8. Contribution Base
    9. 9. Contribution BaseAdjusted Gross Income without allowance for net operating loss carryback.
    10. 10. Contribution Base Adjusted Gross Income without allowance for net operating loss carryback.Cash Contributions to public charities–50% of the contribution base
    11. 11. Contribution Base Adjusted Gross Income without allowance for net operating loss carryback.Cash Contributions to public charities–50% of the contribution baseLong-Term Capital Gain Property—full value up to 30% of contribution base, e.g. stocks/bonds, real estate
    12. 12. Contribution Base Adjusted Gross Income without allowance for net operating loss carryback.Cash Contributions to public charities–50% of the contribution baseLong-Term Capital Gain Property—full value up to 30% of contribution base, e.g. stocks/bonds, real estatePrivate Foundations—full value up to 20% of contribution base
    13. 13. Contribution Base Adjusted Gross Income without allowance for net operating loss carryback.Cash Contributions to public charities–50% of the contribution baseLong-Term Capital Gain Property—full value up to 30% of contribution base, e.g. stocks/bonds, real estatePrivate Foundations—full value up to 20% of contribution baseShort-Term Capital Gain Property-50% of the contribution base
    14. 14. Contribution Base Adjusted Gross Income without allowance for net operating loss carryback.Cash Contributions to public charities–50% of the contribution baseLong-Term Capital Gain Property—full value up to 30% of contribution base, e.g. stocks/bonds, real estatePrivate Foundations—full value up to 20% of contribution baseShort-Term Capital Gain Property-50% of the contribution baseTangible Personal Property- full fair market value up to 30% of contribution base
    15. 15. Match the tax section Section 1031 Mergers Section 1041 Partnerships Section 721 Like-Kind Exchanges Section 351 Between SpousesDivorce Section 354 Corporations
    16. 16. Match the tax section Section 1031 Mergers Section 1041 Partnerships Section 721 Like-Kind Exchanges Section 351 Between SpousesDivorce Section 354 Corporations
    17. 17. Match the tax section Section 1031 Mergers Section 1041 Partnerships Section 721 Like-Kind Exchanges Section 351 Between SpousesDivorce Section 354 Corporations
    18. 18. Match the tax section Section 1031 Mergers Section 1041 Partnerships Section 721 Like-Kind Exchanges Section 351 Between SpousesDivorce Section 354 Corporations
    19. 19. Match the tax section Section 1031 Mergers Section 1041 Partnerships Section 721 Like-Kind Exchanges Section 351 Between SpousesDivorce Section 354 Corporations
    20. 20. Match the tax section Section 1031 Mergers Section 1041 Partnerships Section 721 Like-Kind Exchanges Section 351 Between SpousesDivorce Section 354 Corporations
    21. 21. TRUE or FALSE?These plans allow individuals to invest pre-tax andprovide tax-deferred earnings
    22. 22. TRUE or FALSE?These plans allow individuals to invest pre-tax andprovide tax-deferred earnings
    23. 23. A 403(B) is a qualified retirement plan that foremployees of local, state, or federal governmentsand agencies.
    24. 24. A 403(B) is a qualified retirement plan that foremployees of local, state, or federal governmentsand agencies. TRUE or FALSE?
    25. 25. A 403(B) is a qualified retirement plan that foremployees of local, state, or federal governmentsand agencies. FALSE
    26. 26. A 403(B) is a qualified retirement plan that foremployees of local, state, or federal governmentsand agencies. FALSEReal Answer:A 403(b) PLAN IS A TAX FAVORED RETIREMENT PLAN FOREMPLOYEES OR CERTAIN NONPROFIT ORGANIZATIONS
    27. 27. Tax Avoidance Strategies(3):
    28. 28. Tax Avoidance Strategies(3): Step Up in Basis at Death Gifts to charity Use of exclusion provisions in the tax law, e.g. sale of primary home, corp exclusion of up to 50% gain on QUALIFIED small business stock from start up
    29. 29. Retirement Income Sources
    30. 30. Retirement Income Sources• Individually Provided (IRAs, cash values of Life ins, nonqualified annuities, savings)• Social Security – guaranteed income floor, available at age 62  Retired Worker’s Benefits - equal to worker’s primary insurance amount (PIA) at age 65-67.  Spouse of Retired Worker (50% of retired worker’s PIA)  COLA tied to CPI• Employer-Provided Retirement Plans  Qualified pension plans  Profit-sharing plans  Savings Plans
    31. 31. Tax Deferral Strategies(3):
    32. 32. Tax Deferral Strategies(3): Like Kind Exchanges Tax free corporate reorganizations Equity Collars with monetizing the hedged stock, e.g. puts on hedged stocks from employee stock options (other examples p. 294) Exchange Funds
    33. 33. Qualified Retirement PlansA. Pension Plans, Profit Sharing Plans, Savings/Thrift Plans, HR-10B. Stock bonus plans, Employee Stock Ownership Plans (ESOP), Keogh PlansC. Nonqualified AnnuityD. A & B onlyE. A, B & C
    34. 34. Qualified Retirement PlansA. Pension Plans, Profit Sharing Plans, Savings/Thrift Plans, HR-10B.C. Nonqualified AnnuityD. A & B onlyE. A, B & C
    35. 35. Qualified Retirement PlansA.B.C. Nonqualified AnnuityD. A & B onlyE. A, B & C
    36. 36. Qualified Retirement PlansA.B.C.D. A & B onlyE. A, B & C
    37. 37. Qualified Retirement PlansA.B.C.D.E. A, B & C
    38. 38. Qualified Retirement PlansA.B.C.D.E.
    39. 39. Qualified Retirement Plans A. B. C. D. E.Right Answer: Qualified Retirement Plans are spelled out in 401 (k). Correct answer (d) A& B. PensionPlans, Profit Sharing Plans, Savings/Thrift Plans, Stock bonus plans, Employee Stock Ownership Plans (ESOP),Keogh Plans
    40. 40. Method used to estimate needed retirement income based on apercentage of expected final average earned income.
    41. 41. Method used to estimate needed retirement income based on apercentage of expected final average earned income. Income Replacement Ratio
    42. 42. Method used to estimate needed retirement income based on apercentage of expected final average earned income. Income Replacement Ratio 60-80% because
    43. 43. Method used to estimate needed retirement income based on apercentage of expected final average earned income. Income Replacement Ratio 60-80% because 1. Taxes usually decline
    44. 44. Method used to estimate needed retirement income based on apercentage of expected final average earned income. Income Replacement Ratio 60-80% because 1. Taxes usually decline 2. Certain work related expenses may end or reduce
    45. 45. Method used to estimate needed retirement income based on apercentage of expected final average earned income. Income Replacement Ratio 60-80% because 1. Taxes usually decline 2. Certain work related expenses may end or reduce 3. Home-ownership expenses may decline if mortgage debt is eliminated
    46. 46. Method used to estimate needed retirement income based on apercentage of expected final average earned income. Income Replacement Ratio 60-80% because 1. Taxes usually decline 2. Certain work related expenses may end or reduce 3. Home-ownership expenses may decline if mortgage debt is eliminated 4. Support for dependent children may have ended
    47. 47. Method used to estimate needed retirement income based on apercentage of expected final average earned income. Income Replacement Ratio 60-80% because 1. Taxes usually decline 2. Certain work related expenses may end or reduce 3. Home-ownership expenses may decline if mortgage debt is eliminated 4. Support for dependent children may have ended 5. Senior discounts (Go AARP)
    48. 48. Method used to estimate needed retirement income based on apercentage of expected final average earned income. Income Replacement Ratio 60-80% because 1. Taxes usually decline 2. Certain work related expenses may end or reduce 3. Home-ownership expenses may decline if mortgage debt is eliminated 4. Support for dependent children may have ended 5. Senior discounts (Go AARP) 6. General expenses may decline as the aging individual become less active/more sedentary
    49. 49. The parties to an annuity?
    50. 50. The parties to an annuity? Insurer, Contract Owner & Annuitant
    51. 51. The parties to an annuity? Insurer, Contract Owner & Annuitant •Insurer •Contract Owner: the party who purchases the annuity from the insurer and who makes premium payments. May be the annuitant. •Annuitant: the person insured under the annuity
    52. 52. Qualified Retirement Plan
    53. 53. Qualified Retirement Plan A retirement plan that meets the requirements established by the IRS for favorable tax treatment
    54. 54. Traditional IRA
    55. 55. Traditional IRA A retirement savings plan By which an individual can use tax-deductible And tax deferred methods For accumulating wealth.
    56. 56. 4 Retirement funding ‘vehicles:’
    57. 57. 4 Retirement funding ‘vehicles:’ Tax deductible Tax Free Tax deferred Currently taxable
    58. 58. Match the tax section Section 1035 Like-Kind Section 1036 Emp Stock Option Plan Section 1042 Life to Annuity Section 351 Corporate Stock Options Section 1031 Corporation Formation
    59. 59. Match the tax section Section 1035 Like-Kind Section 1036 Emp Stock Option Plan Section 1042 Life to Annuity Section 351 Corporate Stock Options Section 1031 Corporation Formation
    60. 60. Match the tax section Section 1035 Like-Kind Section 1036 Emp Stock Option Plan Section 1042 Life to Annuity Section 351 Corporate Stock Options Section 1031 Corporation Formation
    61. 61. Match the tax section Section 1035 Like-Kind Section 1036 Emp Stock Option Plan Section 1042 Life to Annuity Section 351 Corporate Stock Options Section 1031 Corporation Formation
    62. 62. Match the tax section Section 1035 Like-Kind Section 1036 Emp Stock Option Plan Section 1042 Life to Annuity Section 351 Corporate Stock Options Section 1031 Corporation Formation
    63. 63. Match the tax section Section 1035 Like-Kind Section 1036 Emp Stock Option Plan Section 1042 Life to Annuity Section 351 Corporate Stock Options Section 1031 Corporation Formation
    64. 64. Nonforfeitable right to his/her account balance under a defined-contribution plan or to an accrued benefit under a defined=benefitplan that results for employer contributions to the plan
    65. 65. Nonforfeitable right to his/her account balance under a defined-contribution plan or to an accrued benefit under a defined=benefitplan that results for employer contributions to the plan Vesting
    66. 66. Nonforfeitable right to his/her account balance under a defined-contribution plan or to an accrued benefit under a defined=benefitplan that results for employer contributions to the plan Vesting
    67. 67. Qualified Annuity
    68. 68. Qualified Annuity • An annuity that is used as a funding vehicle in a qualified plan, such as an individual retirement account, a tax-sheltered annuity, or a 401(k) plan. • 10% tax penalty for early withdrawal (age 70.5)
    69. 69. A Qualified 401(k) plan meets the IRS rules insection 401(k) & participants may choose to TRUE or FALSE?
    70. 70. A Qualified 401(k) plan meets the IRS rules insection 401(k) & participants may choose to TRUE or FALSE?
    71. 71. Highly secure, liquid investment that investors commonly use for theliquid portion of their investment portfolios
    72. 72. Highly secure, liquid investment that investors commonly use for theliquid portion of their investment portfolios Money Market Mutual Fund
    73. 73. Highly secure, liquid investment that investors commonly use for theliquid portion of their investment portfolios Money Market Mutual Fund
    74. 74. 2 features & examples forMoney Market Account
    75. 75. 2 features & examples forMoney Market Account Relatively safe Liquid investment Such as securities issued or guaranteed by the federal government, certificates of deposit, banker’s acceptances, euro dollars, and commercial paper

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