Series 65 MOD 9 Customer Profiles

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  1. Tax Bracket for:
    Divorced with children
    head of household
  2. Tax Bracket for:
    Divorced paying child-support
  3. Tax Bracket for:
    Widowed during the tax year with children
  4. Tax Bracket for:
    Widowed during previous tax years with children
    head of household
  5. Tax Bracket for:
    Any alimony paid
    deductible to the person paying it
  6. Tax Bracket for:
    Any alimony received
    taxed as income to the recipient
  7. Define the Marginal tax rate:
    the tax rate that is paid on the last dollar of one’s income
  8. Define the Effective tax rate
    the AVERAGE rate of taxation on ALL one’s income
  9. What is the Form W-8 BEN
    all foreign citizens opening a brokerage account with a U.S. firm must complete this form
  10. Advantages/disadvantages of Individual investors/family unit/sole proprietorship:
    • Simplicity, autonomy/freedom to choose own investments.
    • disadvantage: Unlimited liability
  11. Advantage/disadvantage of General Partnership:
    • Simplicity;all income or loss flows through to the partners 
    • disadvantage: Unlimited personal liability
  12. Advantage/disadvantage of LIMITED PARTNERSHIP
    there must be at least one general partner and one limited partner
    • Limited partners enjoy limited liability and all partners enjoy flow-through of income or loss
    • disadvantage: General partners assume unlimited personal liability; limited partners have limited control over the business.
  13. Order of liquidation for a limited partnership:
    • 1.Senior creditors
    • 2.Unsecured creditors
    • 3.Limited partner(s)
    • 4.General partner(s)
    • Primarily used to reduce estate taxes and to reduce or avoid gift taxes in transferring assets to children. Concurrently, an FLP allows the parents to retain control over the assets while they live.
    • Advantage: Tax deferral
    • retention of control by general partners
    • Disadvantage: Unlimited personal liability of general partners
  15. Advantage/Disadvantage of C-corporation:
    • Advantages: Limited liability for all owners
    • Disadvantages: Double taxation of profits
  16. Advantages/Disadvantages of S-Corporation
    • S-CORPORATION shareholders enjoy the limited liability of the corporate form of enterprise with the tax aspects of a partnership.
    • Advantages: Limited liability of all shareholders, pass-through tax treatment
    • Disadvantages: Limited number of shareholders and other shareholder restrictions
  17. Advantage/Disadvantage of LLC:
    • LLCs may issue different classes of stock, such as common and preferred stock
    • Advantages: The LLC is treated as a corporation for liability purposes and as a partnership or corporation for tax purposes
    • Disadvantages: The business structure does not lend itself to raising capital through public offerings.
  18. Define a Trust:
    A TRUST is often created to transfer assets from the taxable estate of parents, and as grantors, they appoint a Trustee to manage the assets on behalf of their children who are named as beneficiaries.
  19. Define a TESTAMENTARY Trust:
    Trust created by the grantor’s will
  20. Define a LIVING Trust:
    • a LIVING Trust is created and used during the life of the grantor.
    • A living trust may be revocable, irrevocable, or reversionary
  21. Advantages/Disadvantages of a Trust
    • Advantages: May be used to transfer assets from a taxable estate to a trust, deferring estate taxes; grantor may continue to receive income from the assets; a knowledgeable trustee may be appointed to manage the trust assets.
    • Disadvantages: Donor loses control over the assets if managed by a trustee and may not (in general) change the beneficiary designation or revoke the trust if the grantor or beneficiaries’ situations change.
  22. When an estate is liquidated, what is the first concern of the fiduciary handling the estate?
    what the tax implications are to the estate
  23. Although donors may contribute any amount to an UGMA account,  to avoid paying a gift tax on an UGMA donation, donors may only contribute:
    $14,000 per year
  24. Municipal bonds are not considered good investments in:
    an IRA account.
  25. Two basic tools used by most advisers are a:
    • balance sheet
    • income statement
    • These tools are used regardless if the client is a business entity or an individual.
  26. The basic balance sheet formula for an individual is:
    Assets - Liabilities = Net Worth
  27. The basic income statement formula is:
    Income - Expenses = Discretionary Income
    The impact of inflation on dollars to be received in the future
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Series 65 MOD 9 Customer Profiles
2014-12-30 18:51:15

Customer Profiles
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