7.2.25 - 8am, 80 quesitons

Medicare excess tax

250k agi,

.9%,

More funding for medicare

Incidental benefit rule life insurance in defined benefit plan

No more than 50% of employer contributions may be used

HO1

Named perils - fire, lightning, windstorm, hail, theft, vandalism, smoke, explosion

Coverage C

Personal property

Coverage D

Loss of Use

Coverage E

Personal Liability

Coverage F

Medical payments to others

Excluded perils

Flood, earthquake, ordinance law, war, nuclear hazard, wear and tear, neglect, infestation, sewer backup

MEC

Death benefit is tax free

Taxable loan = cant be more than amount of gain in cash value

10% early withdrawal penalty

LIFO

457 plan

Special Catchup is twice regular deferral for one year

SEP IRA

Cant take loans from it;

Not qualified;

Immediate 100% vesting

Coverdell

Not tax deductible but grow tax free

Non-cancelable disability policies

Cant have change in premium;

Right to renew for period;

Are guaranteed renewable;

Guaranteed renewable can raise price, non cancelable cant raise price

Traditional defined benefit

Favors older and higher salary if trying to maximize;

Tied to your highest salary;

Guaranteed to employee

20% mandatory withholding for lump sum

Cash balance plans

Doesn't provide as high benefit as traditional because minimum interest rate credit.

No access to market returns;

No more than 10% in company stock

Losses

Passive losses only offset passive income LOOK AT INCOME;

$25000 of passive losses against ordinary income up to 100k-150k AGI $1 for every $2;

Can offset passive losses from passive income; Capital losses only capital assets;

Net Capital losses $3000 of ordinary income and carry over

Profit sharing plan

Tax deductible to employer;

Irregular contributions

Money purchase plan

Required funding;

Based on market return not a calculation;

Not guaranteed;

No more than 10% in company stock

Grantor retained annuity trust

Taxable gift when established;

If grantor dies during term, assets go to estate;

All income taxed to grantor;

If grantor survives term nothing goes to estate

ESOP

No social security integration

S corp can make one

Stock bonus plan

Integrated with social security

can be employer stock

Participating life insurance

Pays dividends, cant replace premiums

American opportunity tax credit

Per student per year for 4 years;

100% of first $2000;

25% of next $2000

Lifetime learning credit

Per family but not same student as American opportunity tax credit;

20% of first $10,000 of expenses

Corporate owned life insurance

Cant deduct premiums;

Accumulate cash value;

Cannot deduct interest on loans borrowed