Q:2-A will can accomplish which of the following estate planning objectives?
Mark one answer:
Avoids probate.
Provides for decisions in the event of incompetency.
Can establish a testamentary credit shelter trust.
Can override a beneficiary designation on a qualified retirement plan.

Q:3-Danny is starting a new business. He is concerned about liability. He would like to have flow-through taxation. At some point, he would like to be able to easily sell interests in the business, but he does not expect to have more than 20 investors. Danny does not want to pay self-employment taxes on all income. Which of the following entities would best suit Danny's needs?
Mark one answer:
A Proprietorship.
A S corporation.
A C corporation.
A Partnership.

Q:4-Hannah owns an event planning company that specializes in very high-end events. Several years ago, Hannah purchased a magnificent chocolate fountain for $3,000 and has since taken $1,200 in depreciation deductions on the fountain. Hannah is now ready to replace the fountain with tools for creating ice sculptures, but she is not sure what the tax consequences of selling the fountain will be. Which of the following statements is true regarding the tax consequences of selling the fountain?
Mark one answer:
If Hannah sells the chocolate fountain for $1,800, she will have a $1,200 ordinary loss.
If Hannah sells the chocolate fountain for $1,700, she will have a $100 capital loss.
If Hannah sells the chocolate fountain for $2,000, she will have an ordinary gain of $200 and no capital gain.
If Hannah sells the chocolate fountain for $3,300, she will have a $1,500 capital gain.

Q:5-John, a CFP® professional, works for a firm requiring that any investment products offered to a client be proprietary products of the firm. Jack, his client, is 55 years old and has a moderate risk tolerance. John 's firm has an S&P500 index fund with a reasonable fee structure. John has discussed the fund 's performance and costs with Jack and they have agreed that 60% of his equity portfolio will be allocated to this index fund. Which of the following is true according to the CFP Code of Ethics?
Mark one answer:
John is prohibited from providing financial planning or material elements of financial planning because he may not be able to offer the client the best available option.
John may provide financial planning or material elements of financial planning as long as the limitations concerning the proprietary products are discussed with Jack.
John may provide financial planning or material elements of financial planning but the limitations concerning the proprietary products must be disclosed and it must be in writing to Jack.
John could enter into a limited engagement related to Jack 's specific insurance needs next year with no written disclosures other than those required by regulatory bodies.