Questions from Personal Finance

Q: As the owner of a business, you must make an investment

As the owner of a business, you must make an investment decision. The investment will expand your company’s production plant at a cost of $1 million. The expansion will generate income of $150,000 per...

Q: A client purchased a mutual fund with a $10,000

A client purchased a mutual fund with a $10,000 lump-sum amount four years ago. During the four years, $4,000 of dividends were reinvested. Today the shares are valued at $20,000 (including any shares...

Q: Jorge is single and owns $30,000 of stock he

Jorge is single and owns $30,000 of stock he originally purchased four years ago for $7,000. His adjusted gross income (AGI) is $40,000. If Jorge donates the stock to his church, which of the followin...

Q: Before her death, LaDonna Kiniston, age 74, gave her

Before her death, LaDonna Kiniston, age 74, gave her three grandchildren some money for their private school education. She paid $12,000 to the school for Jake’s tuition and gave a like amount to Sara...

Q: An individual received a bequest of 100 shares of XYZ stock from

An individual received a bequest of 100 shares of XYZ stock from a relative who died on March 1 of this year. The relative bought the stock at a total cost of $5,500. The value of the 100 shares of XY...

Q: What is an appropriate standard estate planning strategy for married couples to

What is an appropriate standard estate planning strategy for married couples to minimize taxes over two deaths? a. Bequeath the entire estate to a trust, giving the surviving spouse a general power of...

Q: Five years ago, Tom Mohy bought 10,000 shares of

Five years ago, Tom Mohy bought 10,000 shares of stock at $10 per share in a pharmaceutical company. Today, the stock is worth $200,000 and is paying a dividend of $8,000 per year. Tom feels that the...

Q: If a client’s primary goal in making lifetime gifts to his children

If a client’s primary goal in making lifetime gifts to his children is to lower his estate taxes, he should make gifts of property that a. are expected to depreciate significantly in the future. b. ar...

Q: Doris Jenkins is a 71-year-old widow with a

Doris Jenkins is a 71-year-old widow with a son and daughter ages 43 and 45, respectively, and six grandchildren. Doris has an estate currently worth $572,000, which includes her home valued at $250,0...

Q: Bruce, age 55, is the beneficiary of his mother’s $

Bruce, age 55, is the beneficiary of his mother’s $200,000 life insurance policy. The insurer has requested that he select a settlement option for payment of the proceeds. What factors should he consi...