3/27/25, 8:52 CRPC Sample Tests |
AM
CRPC SAMPLE TESTS EXAM QUESTIONS AND ANSWERS WITH COMPLETE
SOLUTIONS VERIFIED
Terms in this set (448)
Allows a married couple to double their allowable annual exclusions is only allowed
Gift splitting
for married couples
Ownership limited to spouses only Joint tenancy tenancy by the entirety community property
Grantor retained interest Trust Grit Grantor can receive all income earned by the trust
Qualified terminable interest Property Income of a Q-tip goes to the grantor's spouse
Trust Q-tip
Charitable lead Trust CLT The income goes to charity
Power of appointment trust POA Income goes to the grantor's spouse
Valuation date for gifts The date on which the transfer is completed
Includes all the property that is subject to the federal estate tax whether or not
Gross estate owned by the decedent and whether or not included in the the probate or taxable
estate
Taxation of reinvestment of ordinary Qualified dividends are subject to the same tax rates applicable to long-term capital
dividends gains
The basis for charitable contribution Based on the current fair market value of the stock
deduction for stock
Taxation of substitute payments in lieu of a Substitute payments in lieu of a dividend are not subject to preferential treatment
dividend and are treated as ordinary income
How does a stock dividend affect basis The basis is reduced to provide basis for shares are received as a stock dividend
Net capital loss amount $3,000 per year are deductible
Taxation of qualified dividends Dividends are taxed at 15% or 20% if the dividends fall into the 39.6% bracket
Text treatment for a shareholder The shareholder is treated as if he received a cash dividend equal to the fair market
participating in common stock dividend value of the shares purchased under the plan
reinvestment program
When is earned income taxed It is taxed in the year when the check was received
Medical expenses and AMT Most that are deducted are allowed for AMT purposes 10% of AGI
Bargain element on exercise of an incentive Included as a preference item for AMT
stock option and AMT
Interest from private activity Muni bonds is an AMT preference item except for bonds
Private activity municipal bonds and AMT
issued in 2009 and 2010
Home mortgage interest and AMT Home mortgage interest is allowed for regular and AMT
Adjusted gross income Income remaining after subtracting the adjustments to income
Domestic Partners transfer wealth to Governor domestic partner cannot take a marital deduction in excess of the gift tax
the other vs legal spouse annual exclusion for the transfer while a donor spouse could
The individual should make his or her desire to have the domestic partner
If a domestic partner is appointed as
appointed by executing written documents approved by state law as intestacy
conservator or Guardian
laws typically
follow the bloodline
1/
7
, 3/27/25, 8:52 CRPC Sample Tests |
AM
Per year 4 retirement benefit increase over 8%
full retirement age
Suitable for those who are healthy and have a family history of longevity and those
Qlac
entering retirement with Social Security as their only source of guaranteed income
Bucket approach to withdrawals from ...
retirement savings
Proper written Financial goal Specific in terms of gold dollar amount and time frame
Income replacement percentages vary between low-income and high-income
retirees. Income replacement ratios should not be used as the only basis for
Income replacement percentages
planning. Are useful for younger clients as a guide to their long-term planning and
investing.
Investment policy attributes Long-term perspective. Realistic. Clearly defined.
Asset allocation strategies Tactical. Core satellite. Strategic
Correlation and diversification The lowest correlation provides the most diversification
Two major risks associated with Market risk and business risk
Common Stocks
Two major risks associated with Interest rate risk and purchasing power risk
Bond investing
Calculating yield to maturity on the Set the end mode
calculator
Allowable earnings limit for 2015 for no $15,720 earned income
reduction in Social Security benefits
Social Security benefits available when At full retirement age the workers spouse will receive at least 50% of the
fully insured worker begins at full workers PIA. Capitulo 4 retirement age the PIAA is reduced by 25/36 of 1% for
retirement age each of the first 36 months the spouse is under full retirement age
How does tax-exempt interest affect social All tax-exempt income is included to determine a social security taxation a
security taxation maximum of 85% of Social Security benefits are subject
Features of defined benefit plans Write a predetermined fix retirement benefit for participating employees
Qualified Pension Plan such as Target benefit plans are required to offer
Do Target benefit plans offer Survivor annuity benefits to married participants qualified profit sharing plans
Survivor annuity benefits to married including stock bonus plans and Aesop's generally are not subject to the
participants Survivor annuity
requirements but more typically offer lump sum payouts
A pure Deferred Compensation Plan is sometimes called in lieu of plan because the
employee is receiving the employer's promise to pay benefits in lieu of current
income. death benefit plans provide no life time benefits to the employee
Describe an in lieu of plan
participant the employer helps to fund the retirement benefit provided by a
supplemental plan. some Deferred Compensation Plan provide additional benefits
such as benefits for disability
Similarity between qualified and non- They must enable the employee to defer taxation on the plan funds until retirement
qualified plans
What can affect the retirement benefits in The actual investment returns. The value of the participants individual
a defined contribution plan account balance at retirement
Investment earnings allocated in proportion to relative account balances and
Which allocations are permitted in a
employer contributions to the profit sharing plan allocated in proportion to relative
qualified profit sharing / 401K plan
compensation
Annual limit is the lesser of 100% of pay or $53,000. Employer deduction limit is 25%
Describe the limits that apply to qualified for profit sharing plans, money purchase plans, Target plans, have multiple defined-
2/
7
AM
CRPC SAMPLE TESTS EXAM QUESTIONS AND ANSWERS WITH COMPLETE
SOLUTIONS VERIFIED
Terms in this set (448)
Allows a married couple to double their allowable annual exclusions is only allowed
Gift splitting
for married couples
Ownership limited to spouses only Joint tenancy tenancy by the entirety community property
Grantor retained interest Trust Grit Grantor can receive all income earned by the trust
Qualified terminable interest Property Income of a Q-tip goes to the grantor's spouse
Trust Q-tip
Charitable lead Trust CLT The income goes to charity
Power of appointment trust POA Income goes to the grantor's spouse
Valuation date for gifts The date on which the transfer is completed
Includes all the property that is subject to the federal estate tax whether or not
Gross estate owned by the decedent and whether or not included in the the probate or taxable
estate
Taxation of reinvestment of ordinary Qualified dividends are subject to the same tax rates applicable to long-term capital
dividends gains
The basis for charitable contribution Based on the current fair market value of the stock
deduction for stock
Taxation of substitute payments in lieu of a Substitute payments in lieu of a dividend are not subject to preferential treatment
dividend and are treated as ordinary income
How does a stock dividend affect basis The basis is reduced to provide basis for shares are received as a stock dividend
Net capital loss amount $3,000 per year are deductible
Taxation of qualified dividends Dividends are taxed at 15% or 20% if the dividends fall into the 39.6% bracket
Text treatment for a shareholder The shareholder is treated as if he received a cash dividend equal to the fair market
participating in common stock dividend value of the shares purchased under the plan
reinvestment program
When is earned income taxed It is taxed in the year when the check was received
Medical expenses and AMT Most that are deducted are allowed for AMT purposes 10% of AGI
Bargain element on exercise of an incentive Included as a preference item for AMT
stock option and AMT
Interest from private activity Muni bonds is an AMT preference item except for bonds
Private activity municipal bonds and AMT
issued in 2009 and 2010
Home mortgage interest and AMT Home mortgage interest is allowed for regular and AMT
Adjusted gross income Income remaining after subtracting the adjustments to income
Domestic Partners transfer wealth to Governor domestic partner cannot take a marital deduction in excess of the gift tax
the other vs legal spouse annual exclusion for the transfer while a donor spouse could
The individual should make his or her desire to have the domestic partner
If a domestic partner is appointed as
appointed by executing written documents approved by state law as intestacy
conservator or Guardian
laws typically
follow the bloodline
1/
7
, 3/27/25, 8:52 CRPC Sample Tests |
AM
Per year 4 retirement benefit increase over 8%
full retirement age
Suitable for those who are healthy and have a family history of longevity and those
Qlac
entering retirement with Social Security as their only source of guaranteed income
Bucket approach to withdrawals from ...
retirement savings
Proper written Financial goal Specific in terms of gold dollar amount and time frame
Income replacement percentages vary between low-income and high-income
retirees. Income replacement ratios should not be used as the only basis for
Income replacement percentages
planning. Are useful for younger clients as a guide to their long-term planning and
investing.
Investment policy attributes Long-term perspective. Realistic. Clearly defined.
Asset allocation strategies Tactical. Core satellite. Strategic
Correlation and diversification The lowest correlation provides the most diversification
Two major risks associated with Market risk and business risk
Common Stocks
Two major risks associated with Interest rate risk and purchasing power risk
Bond investing
Calculating yield to maturity on the Set the end mode
calculator
Allowable earnings limit for 2015 for no $15,720 earned income
reduction in Social Security benefits
Social Security benefits available when At full retirement age the workers spouse will receive at least 50% of the
fully insured worker begins at full workers PIA. Capitulo 4 retirement age the PIAA is reduced by 25/36 of 1% for
retirement age each of the first 36 months the spouse is under full retirement age
How does tax-exempt interest affect social All tax-exempt income is included to determine a social security taxation a
security taxation maximum of 85% of Social Security benefits are subject
Features of defined benefit plans Write a predetermined fix retirement benefit for participating employees
Qualified Pension Plan such as Target benefit plans are required to offer
Do Target benefit plans offer Survivor annuity benefits to married participants qualified profit sharing plans
Survivor annuity benefits to married including stock bonus plans and Aesop's generally are not subject to the
participants Survivor annuity
requirements but more typically offer lump sum payouts
A pure Deferred Compensation Plan is sometimes called in lieu of plan because the
employee is receiving the employer's promise to pay benefits in lieu of current
income. death benefit plans provide no life time benefits to the employee
Describe an in lieu of plan
participant the employer helps to fund the retirement benefit provided by a
supplemental plan. some Deferred Compensation Plan provide additional benefits
such as benefits for disability
Similarity between qualified and non- They must enable the employee to defer taxation on the plan funds until retirement
qualified plans
What can affect the retirement benefits in The actual investment returns. The value of the participants individual
a defined contribution plan account balance at retirement
Investment earnings allocated in proportion to relative account balances and
Which allocations are permitted in a
employer contributions to the profit sharing plan allocated in proportion to relative
qualified profit sharing / 401K plan
compensation
Annual limit is the lesser of 100% of pay or $53,000. Employer deduction limit is 25%
Describe the limits that apply to qualified for profit sharing plans, money purchase plans, Target plans, have multiple defined-
2/
7
