CRPC EXAM PRACTICE EXAM ACTUAL EXAM 400 QUESTIONS AND CORRECT DETAILED ANSWERS WITH RATIONALES (VERIFIED ANSWERS) ALREADY GRADED A+.pdf

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CRPC PRACTICE EXAM 2|| ALL QUESTIONS AND CORRE
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CT ANSWERS|| LATEST AND COMPLETE VERSION WIT
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H VERIFIED SOLUTIONS ALREADY GRADED A+|| BRAN
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Dan, age 58 has decided to being periodic withdrawals from his IRA. In order to
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avoid the 10% early withdrawal penalty, distributions must continue until at least
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what age? - m m


mANSWER: Age 63. Distributions must continue for at least five years or until th
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e individual has reached 59.5, whichever is later.
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When is the distribution on a Roth IRA qualified? -
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mANSWER: If the five year holding period has been met and the distribution is
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made after the attainment of age 59.5, death or disability or for the first time purc
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hase of a home (max is $10k).
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A "rising equity glidepath" typically will lead to a
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equity exposure over m m


one's total lifetime. - ANSWER: Decreased. Remember: RISING = decrease.
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HIGH = Low. m m




What is the long term capital gain holding period? -
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ANSWER: More than 12 months.
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Net short-term capital gains are treated as what type of income? - ANSWER:
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Ordinary. They are subject to the taxpayers regular marginal tax rate.
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How much can a single person exclude on the sale of their home? -
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ANSWER: Up to $250,000.00, provided the home has been used as the principal
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residence for two of the previous five years.
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A partial exclusion is available if the two year rule is not met due to health, job or
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other unforeseen circumstances.
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What can a will NOT be used for? -
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ANSWER: Planning for incapacity, avoiding probate, or to transfer assets during the
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life of the owner.
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What is the second step in the retirement planning process? -
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ANSWER: The second step in the retirement planning process is to gather client
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data, including goals and expectations
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What is the first step in the retirement planning process? -
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mANSWER: The first step is to establish and define the client-
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counselor relationship which includes disclosing the counselor's compensation arr
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angement


What is the government health insurance program designed for individuals with l
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ow income or minimal assets regardless of their age or employment status? -
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mANSWER: Medicaid. m




The costs not covered by either Part A or Part B are referred to as what? -
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mANSWER: Medigaps. Medigap insurance is designed to supplement Medicare's
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mbenefits by filling in some of what medicare does not cover including deductible
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s and co-insurance amounts
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The delivery of Long Term Care generally takes one of two forms. What are they?
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- ANSWER: Personal care and Skilled care.
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In order to be considered a "qualified" policy, a long-
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term care policy must provide for what? -
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mANSWER: Nonforfeiture options, cognitive impairment must be covered, it mus
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t be guaranteed renewable and conform to the National Association of Insurance
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Commissioners Model Act. m m




What is a golden parachute plan? -
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mANSWER: An arrangement between an employer and an executive that will pro
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vide the executive with severance benefits if the employer is sold and the new em
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ployee fires the executive. m m m




If you take a hardship distribution from your TSA, what would be the tax conseq
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uences? - m


mANSWER: Hardship withdrawals that are used to pay certain medical expenses
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would be subject to income tax but not to the 10% tax penalty.
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What kind of distribution from a 403b would NOT be subject to the 10% premat
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ure withdrawal penalty? - ANSWER: A QDRO.
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What kind of distribution would be exempt from the 10% penalty on a qualifie
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d plan distribution before age 59.5? -
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mANSWER: Substantial equal periodic payments made to a participant followi
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ng separation of service based on the participants life expectancy.
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Are withdrawals from an IRA to pay for qualified expenses exempt from the 10%
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early withdrawal penalty? - ANSWER: Yes.
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Wills, beneficiary designations, and correct titling of property can all accomplish
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what when it comes to estate planning goals? -
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ANSWER: Assure that property is distributed according to the owner's wishes.
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What is the duty to disclose? -
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mANSWER: Requires you to explain the risks of investments sold to clients even thos
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e backed by the US government.
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What is the duty to diagnose? -
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mANSWER: Includes knowing the customer and making sure that the investment
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recommendations are suitable for the customer. m m m m m



Why is owning property in joint tenancy with right of survivorship a will substitut
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e? - ANSWER: Because the property passes outside of probate.
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Intestate property passes by means of what? -
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mANSWER: The probate process. It is NOT a will substitute. Property that passes
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mby the laws of intestate succession is not affected y any will provisions. Intestate
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succession statues give property to many other family members before transferrin
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g it to the state.
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The donee's basis in gifted property is determined by what valuation? -
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mANSWER: The donor's adjusted basis in the property at the time of the gift if th
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e property has appreciated in value while owned by the donor AND the property's
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mFair Market Value at the time of the gift if this value is less than the donor's adju
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sted basis and the property is sold at a loss.
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What is a characteristic of the unified tax system that is NOT common to both
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federal gift taxation and federal estate taxation? -
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mANSWER: Availability of the annual exclusion amount.
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What must a donor do for the federal gift tax to apply? -
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ANSWER: They must give up control of the property.
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