1|Page
CRPC PRACTICE EXAM 2|| ALL QUESTIONS AND
CORRECT ANSWERS|| LATEST AND COMPLETE
VERSION WITH VERIFIED SOLUTIONS ALREADY
GRADED A+|| BRAND NEW!!!
Dan, age 58 has decided to being periodic withdrawals from his IRA. In order to
avoid the 10% early withdrawal penalty, distributions must continue until at least
what age? - ANSWER: Age 63. Distributions must continue for at least five years
or until the individual has reached 59.5, whichever is later.
When is the distribution on a Roth IRA qualified? - ANSWER: If the five year
holding period has been met and the distribution is made after the attainment of
age 59.5, death or disability or for the first time purchase of a home (max is $10k).
A "rising equity glidepath" typically will lead to a ________ equity exposure over
one's total lifetime. - ANSWER: Decreased. Remember: RISING = decrease.
HIGH = Low.
What is the long term capital gain holding period? - ANSWER: More than 12
months.
Net short-term capital gains are treated as what type of income? - ANSWER:
Ordinary. They are subject to the taxpayers regular marginal tax rate.
How much can a single person exclude on the sale of their home? - ANSWER: Up
to $250,000.00, provided the home has been used as the principal 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
other unforeseen circumstances.
What can a will NOT be used for? - ANSWER: Planning for incapacity, avoiding
probate, or to transfer assets during the life of the owner.
What is the second step in the retirement planning process? - ANSWER: The
second step in the retirement planning process is to gather client data, including
goals and expectations
What is the first step in the retirement planning process? - ANSWER: The first
step is to establish and define the client-counselor relationship which includes
disclosing the counselor's compensation arrangement
What is the government health insurance program designed for individuals with
low income or minimal assets regardless of their age or employment status? -
ANSWER: Medicaid.
The costs not covered by either Part A or Part B are referred to as what? -
ANSWER: Medigaps. Medigap insurance is designed to supplement Medicare's
benefits by filling in some of what medicare does not cover including deductibles
and co-insurance amounts
The delivery of Long Term Care generally takes one of two forms. What are they?
- ANSWER: Personal care and Skilled care.
,3|Page
In order to be considered a "qualified" policy, a long-term care policy must provide
for what? - ANSWER: Nonforfeiture options, cognitive impairment must be
covered, it must be guaranteed renewable and conform to the National Association
of Insurance Commissioners Model Act.
What is a golden parachute plan? - ANSWER: An arrangement between an
employer and an executive that will provide the executive with severance benefits
if the employer is sold and the new employee fires the executive.
If you take a hardship distribution from your TSA, what would be the tax
consequences? - ANSWER: Hardship withdrawals that are used to pay certain
medical expenses would be subject to income tax but not to the 10% tax penalty.
What kind of distribution from a 403b would NOT be subject to the 10%
premature withdrawal penalty? - ANSWER: A QDRO.
What kind of distribution would be exempt from the 10% penalty on a qualified
plan distribution before age 59.5? - ANSWER: Substantial equal periodic
payments made to a participant following separation of service based on the
participants life expectancy.
Are withdrawals from an IRA to pay for qualified expenses exempt from the 10%
early withdrawal penalty? - ANSWER: Yes.
Wills, beneficiary designations, and correct titling of property can all accomplish
what when it comes to estate planning goals? - ANSWER: Assure that property is
distributed according to the owner's wishes.
, 4|Page
What is the duty to disclose? - ANSWER: Requires you to explain the risks of
investments sold to clients even those backed by the US government.
What is the duty to diagnose? - ANSWER: Includes knowing the customer and
making sure that the investment recommendations are suitable for the customer.
Why is owning property in joint tenancy with right of survivorship a will
substitute? - ANSWER: Because the property passes outside of probate.
Intestate property passes by means of what? - ANSWER: The probate process. It
is NOT a will substitute. Property that passes by the laws of intestate succession is
not affected y any will provisions. Intestate succession statues give property to
many other family members before transferring it to the state.
The donee's basis in gifted property is determined by what valuation? - ANSWER:
The donor's adjusted basis in the property at the time of the gift if the property has
appreciated in value while owned by the donor AND the property's Fair Market
Value at the time of the gift if this value is less than the donor's adjusted basis and
the property is sold at a loss.
What is a characteristic of the unified tax system that is NOT common to both
federal gift taxation and federal estate taxation? - ANSWER: Availability of the
annual exclusion amount.
What must a donor do for the federal gift tax to apply? - ANSWER: They must
give up control of the property.
CRPC PRACTICE EXAM 2|| ALL QUESTIONS AND
CORRECT ANSWERS|| LATEST AND COMPLETE
VERSION WITH VERIFIED SOLUTIONS ALREADY
GRADED A+|| BRAND NEW!!!
Dan, age 58 has decided to being periodic withdrawals from his IRA. In order to
avoid the 10% early withdrawal penalty, distributions must continue until at least
what age? - ANSWER: Age 63. Distributions must continue for at least five years
or until the individual has reached 59.5, whichever is later.
When is the distribution on a Roth IRA qualified? - ANSWER: If the five year
holding period has been met and the distribution is made after the attainment of
age 59.5, death or disability or for the first time purchase of a home (max is $10k).
A "rising equity glidepath" typically will lead to a ________ equity exposure over
one's total lifetime. - ANSWER: Decreased. Remember: RISING = decrease.
HIGH = Low.
What is the long term capital gain holding period? - ANSWER: More than 12
months.
Net short-term capital gains are treated as what type of income? - ANSWER:
Ordinary. They are subject to the taxpayers regular marginal tax rate.
How much can a single person exclude on the sale of their home? - ANSWER: Up
to $250,000.00, provided the home has been used as the principal residence for two
of the previous five years.
,2|Page
A partial exclusion is available if the two year rule is not met due to health, job or
other unforeseen circumstances.
What can a will NOT be used for? - ANSWER: Planning for incapacity, avoiding
probate, or to transfer assets during the life of the owner.
What is the second step in the retirement planning process? - ANSWER: The
second step in the retirement planning process is to gather client data, including
goals and expectations
What is the first step in the retirement planning process? - ANSWER: The first
step is to establish and define the client-counselor relationship which includes
disclosing the counselor's compensation arrangement
What is the government health insurance program designed for individuals with
low income or minimal assets regardless of their age or employment status? -
ANSWER: Medicaid.
The costs not covered by either Part A or Part B are referred to as what? -
ANSWER: Medigaps. Medigap insurance is designed to supplement Medicare's
benefits by filling in some of what medicare does not cover including deductibles
and co-insurance amounts
The delivery of Long Term Care generally takes one of two forms. What are they?
- ANSWER: Personal care and Skilled care.
,3|Page
In order to be considered a "qualified" policy, a long-term care policy must provide
for what? - ANSWER: Nonforfeiture options, cognitive impairment must be
covered, it must be guaranteed renewable and conform to the National Association
of Insurance Commissioners Model Act.
What is a golden parachute plan? - ANSWER: An arrangement between an
employer and an executive that will provide the executive with severance benefits
if the employer is sold and the new employee fires the executive.
If you take a hardship distribution from your TSA, what would be the tax
consequences? - ANSWER: Hardship withdrawals that are used to pay certain
medical expenses would be subject to income tax but not to the 10% tax penalty.
What kind of distribution from a 403b would NOT be subject to the 10%
premature withdrawal penalty? - ANSWER: A QDRO.
What kind of distribution would be exempt from the 10% penalty on a qualified
plan distribution before age 59.5? - ANSWER: Substantial equal periodic
payments made to a participant following separation of service based on the
participants life expectancy.
Are withdrawals from an IRA to pay for qualified expenses exempt from the 10%
early withdrawal penalty? - ANSWER: Yes.
Wills, beneficiary designations, and correct titling of property can all accomplish
what when it comes to estate planning goals? - ANSWER: Assure that property is
distributed according to the owner's wishes.
, 4|Page
What is the duty to disclose? - ANSWER: Requires you to explain the risks of
investments sold to clients even those backed by the US government.
What is the duty to diagnose? - ANSWER: Includes knowing the customer and
making sure that the investment recommendations are suitable for the customer.
Why is owning property in joint tenancy with right of survivorship a will
substitute? - ANSWER: Because the property passes outside of probate.
Intestate property passes by means of what? - ANSWER: The probate process. It
is NOT a will substitute. Property that passes by the laws of intestate succession is
not affected y any will provisions. Intestate succession statues give property to
many other family members before transferring it to the state.
The donee's basis in gifted property is determined by what valuation? - ANSWER:
The donor's adjusted basis in the property at the time of the gift if the property has
appreciated in value while owned by the donor AND the property's Fair Market
Value at the time of the gift if this value is less than the donor's adjusted basis and
the property is sold at a loss.
What is a characteristic of the unified tax system that is NOT common to both
federal gift taxation and federal estate taxation? - ANSWER: Availability of the
annual exclusion amount.
What must a donor do for the federal gift tax to apply? - ANSWER: They must
give up control of the property.
