Corporate Transparency Act
Property/Casualty Insurance
Beneficiary Deemed Owner Trusts (BDOTs)
SECURE Act 2.0
Potpourri
100
This is the report that must be filed with the Financial Crimes Enforcement Network (FinCEN) by January 1, 2025.
What is the Beneficial Ownership Information Report (BOIR)
100
Given recent trends, which of the following is likely the riskiest activity for high-net-worth clients to engage in?
A) Having a blog where they review water-resistant safes
B) Owning a home with ATVs, jet skis, and snowmobiles
C) Using their antique stamp collection as wallpaper
D) Asking their insurance agent for free collectible appraisals
B) Owning a home with ATVs, jet skis, and snowmobiles
100
Which of the following is NOT an advantage of a Beneficiary Deemed Owner Trust (BDOT)?
A) Avoids compressed trust tax rates
B) Provides full control over principal to the beneficiary
C) Beneficiaries pay income tax instead of the trust
D) Potential to avoid multiple state taxes
What is B) Provides full control over principal to the beneficiary
100
This is what "SECURE" stands for
What is "Setting Every Community Up for Retirement Enhancement"
100
This is the website for the Mahoning Shenango Valley Estate Planning Council.
What is https://msvepc.com/
200
Along with foreign reporting companies, these three types of companies fall under the "domestic reporting company" category under the Reporting Rule.
What are:
1 Corporations
2 LLCs
3 Other companies created by the filing of a document with the Secretary of State of similar office of a State or Indian Tribe.
200
Severe weather events have skyrocketed in recent years. If you accidentally leave the hot tub running for 48 hours, approximately how much water could be wasted?
A) 75 gallons, the size of a bathtub
B) 300 gallons, about one hot tub’s worth
C) 7,200 gallons, enough for a small pool
D) 51,600 gallons, about the size of a giant inflatable water slide
What is C) 7,200 gallons, enough for a small pool
200
What is the primary drawback of BDOTs for high-net-worth individuals?
A) They don’t work as a retirement plan
B) Loss of income tax benefits if principal is accessed
C) Frequent flier miles aren’t included
D) They are mostly suited for individuals under 30
What is B) Loss of income tax benefits if principal is accessed
200
This is the year when Required Minimum Distributions will increase from age 73 to 75.
What is 2033
200
Who is our Sponsor this evening?
300
This is one type of entity that is exempt from BOIR reporting requirements.
What is:
1 Securities reporting issuer
2 Governmental authority
3 Bank
4 Credit union
5 Depository institution holding company
6 Money services business
7 Broker or dealer in securities
8 Securities exchange or clearing agency
9 Other Exchange Act registered entity
10 Investment company or investment adviser
11 Venture capital fund adviser
12 Insurance company
13 State-licensed insurance producer
14 Commodity Exchange Act registered entity
15 Accounting firm
16 Public utility
17 Financial market utility
18 Pooled investment vehicle
19 Tax-exempt entity
20 Entity assisting a tax-exempt entity
21 Large operating company
22 Subsidiary of certain exempt entities
23 Inactive entity
300
Cybersecurity is increasingly critical for personal clients. According to risk experts, the best way to prevent a cyber breach is to:
A) Never open emails from anyone with “prince” in their name
B) Unplug all digital devices permanently
C) Improve your "cyber posture" by investing in secure protocols
D) Store all sensitive documents in a dusty attic
What is C) Improve your "cyber posture" by investing in secure protocols
300
In trust taxation, when is “distributable net income” (DNI) relevant?
A) Every time the trustee makes a distribution
B) When the trust files a tax return
C) When assets are distributed to beneficiaries for their income tax reporting
D) On a leap year
What is C) When assets are distributed to beneficiaries for their income tax reporting
300
Employers must automatically enroll employees in a retirement plan with at least this contribution percentage.
What is 3%
300
Who is the Senior Director of Operations and Communication for the Community Foundation of the Mahoning Valley
Rachael Chacon
400
A beneficial owner is any individual who, directly or indirectly, owns or controls at least 25 percent of the ownership interests of a reporting company -OR- exercises this type of control over a reporting company.
What is substantial control
An individual exercises substantial control over a reporting company if the individual meets any of four general criteria: (1) the individual is a senior officer; (2) the individual has authority to appoint or remove certain officers or a majority of directors of the reporting company; (3) the individual is an important decision-maker; or (4) the individual has any other form of substantial control over the reporting company.
400
Social inflation and nuclear verdicts are hot topics in liability coverage. Which of the following best describes a “nuclear verdict”?
A) A jury verdict that goes “boom” in costs for the defendant
B) A liability lawsuit involving nuclear power facilities
C) Any verdict that includes damages above $10 million
D) A verdict that awards plaintiffs a lifetime supply of legal fees
What is A) A jury verdict that goes “boom” in costs for the defendant
400
Which type of trust would likely be suggested to help avoid state income taxes if the beneficiary lives out of state?
A) Beneficiary Deemed Owner Trust (BDOT)
B) Pet Trust
C) Constructive Trust
D) Revocable Pizza Trust
What is A) Beneficiary Deemed Owner Trust (BDOT)
400
This is the penalty percentage for failing to take an RMD in 2024. This is the percentage if corrected in a timely manner.
What is 25% and 10%
400
What MSVEPC Members are also Board Members of the Communiy Foundation of the Mahoning County
Who are Sam Fries and Jeff Heintz
500
The willful failure to report compete beneficial ownership information may include civil penalties of up to this daily amount and criminal penalties of up to this many years of imprisonment and/or a fine of up to $10,000.
What is $500 and 2 years
500
With reinsurance costs rising, insurers are paying closer attention to “plumbing failures.” If a family is away for a week and a pipe bursts, about how many gallons of water could flood their home?
A) 7,200 gallons
B) 21,600 gallons
C) 51,600 gallons
D) More than the water used at Disneyland on a slow day
What is C) 51,600 gallons
500
Which IRS regulation applies to defining income for beneficiaries in trust taxation?
A) Treas. Reg. §1.671-2(b)
B) Treas. Reg. §404(k)
C) Treas. Reg. §602(z)
D) The “just wing it” principle
What is A) Treas. Reg. §1.671-2(b)
500
Beginning January 1, 2025, individuals ages 60 through 63 can make catch-up contributions to their retirement plans up to this dollar amount.
What is $10,000
500
SSB CPAs specialize in tailored financial solutions for various industries, from manufacturing to healthcare. Which of the following unique "industry-specific" services might SSB offer if a client requested it?
A) Custom tax strategy for breweries based on beer foam thickness
B) Family business mediation with a free therapy dog on standby
C) Retirement planning that includes an escape plan to a tax-free island
D) Construction expense deductions based on the number of hard hats per worker
What is A) Custom tax strategy for breweries based on beer foam thickness
600
The Corporate Transparency Act is primarily aimed at stopping which of the following activities?
A) Keeping your coffee preferences private
B) Tax evasion and money laundering
C) Free sample hoarding at grocery stores
D) Social media oversharing
What is B) Tax evasion and money laundering
600
High-net-worth clients are diversifying into collectibles as an investment. Which of the following would likely NOT qualify as a ‘valuable collectible’ to insure?
A) Rare sports cards
B) A classic car collection
C) A collection of every McDonald’s Happy Meal toy since 1980
D) Fine art pieces from world-renowned artists
What is C) A collection of every McDonald’s Happy Meal toy since 1980
600
When considering a BDOT structure, the IRS is primarily concerned with:
A) Where the trust is legally domiciled
B) How much popcorn the beneficiaries consume
C) The grantor’s last known address
D) Whether it involves “income tax ownership” without “estate tax ownership”
What is D) Whether it involves “income tax ownership” without “estate tax ownership”
600
With the Secure Act 2.0, what’s the new contribution limit for employees over 60 making catch-up contributions to a 401(k) starting in 2025?
A) $7,500, which includes a “bonus” for patience
B) Double what you spent on lunch this year
C) $10,000 or 150% of the regular catch-up contribution, whichever is greater
D) As much as you can fit in the mattress
What is C) $10,000 or 150% of the regular catch-up contribution, whichever is greater
600
Natalie Lariccia would most likely advise clients to include which strategy for tax efficiency in their retirement planning?
A) Roth IRA conversions to reduce taxable income in retirement
B) Withdrawing all funds at once
C) Buying a high-risk sports team
D) Skipping taxes if the balance is under $10
What is A) Roth IRA conversions to reduce taxable income in retirement
700
If a financial advisor is working with a family business that qualifies as an exempt entity under the CTA, which factor likely contributes to this exemption?
A) The family business employs fewer than 5 full-time employees
B) The family business operates solely in one state with minimal interstate commerce
C) The business is already subject to extensive regulatory oversight, like a financial institution
D) The family business reports all shareholder meetings and major transactions to the IRS
What is C) The business is already subject to extensive regulatory oversight, like a financial institution
700
Who was our Guest Speaker for the Property Casualty Presentation?
Who is Jessica Stoecklein DeFelice, CPRIA
700
Which tax form does a non-grantor trust file to report its income?
A) Form 1041
B) Form 1099-B
C) Form 1040-TRUST
D) Form W-2
What is A) Form 1041
700
Under Secure Act 2.0, which of the following new IRA options for employers would be most popular if only it were real?
A) The “Tax-Free” Account: Withdrawals only on April Fool’s Day
B) The “IRA Express” with five-minute online delivery
C) Roth employer match contributions, where employers can now contribute to employees' Roth accounts instead of just pre-tax
D) The “Reversible Roth,” for when you just can’t commit
What is C) Roth employer match contributions, where employers can now contribute to employees' Roth accounts instead of just pre-tax
700
Expand Health at Home offers services that are best for:
A) High-energy clients needing mental fitness
B) Seniors seeking advanced healthcare without leaving their home
C) Anyone wanting fresh flowers
D) Young investors
What is B) Seniors seeking advanced healthcare without leaving their home
800
A financial advisor is guiding a client with a complex ownership structure through CTA compliance. The client has several subsidiaries. Which of the following best describes the CTA reporting requirement in this case?
A) Only the primary entity must report beneficial ownership
B) Each subsidiary must file its own beneficial ownership report
C) Reporting is required only for foreign-owned subsidiaries
D) Only subsidiaries with over 50% ownership need to report
What is B) Each subsidiary must file its own beneficial ownership report
800
Simpson McCrady emphasizes that “when clients are at their worst, we are at our best.” This phrase is meant to reassure clients that:
A) Their claims will be handled efficiently and compassionately
B) They will have access to top legal representation for free
C) All policies come with a shoulder to cry on
D) Simpson McCrady agents are also trained therapists
What is A) Their claims will be handled efficiently and compassionately
800
Which of the following is the primary reason BDOTs (Beneficiary Deemed Owner Trusts) are increasingly popular in estate planning?
A) They reduce estate tax and maximize creditor protection
B) They sound impressive at dinner parties
C) They allow for more tax-free distributions than non-BDOTs
D) They allow you to ignore your CPA’s advice entirely
What is A) They reduce estate tax and maximize creditor protection
800
With Secure Act 2.0, starting in 2024, high earners making catch-up contributions to a 401(k) must make these contributions on a Roth basis. What could be the IRS’s unofficial motto for this rule?
A) “Your money, now taxable sooner than ever!”
B) “High earners, we see you!”
C) “Pay now or pay later, but you will pay”
D) “Catch-up contributions: now with 30% more complexity”
what is A) “Your money, now taxable sooner than ever!”
800
Yurchyk & Davis CPAs would most likely recommend a charitable remainder trust (CRT) to clients who:
A) Love non-profits but not tax deductions
B) Want to receive income and leave assets to charity
C) Want a tax-free lottery win
D) Want maximum tax write-offs without any paperwork
What is B) Want to receive income and leave assets to charity
900
Under the CTA, a financial advisor should advise clients on updating beneficial ownership information. How soon must changes to beneficial ownership be reported?
A) Within 14 days of the change
B) Within 30 days of the change
C) Within 60 days of the change
D) Within one fiscal quarter
What is B) Within 30 days of the change
900
For personal insurance, social inflation affects liability coverage. Which of the following would likely INCREASE a client’s risk exposure due to social inflation?
A) Becoming a judge on a reality TV show
B) Having a large social media following
C) Giving away assets to charity
D) Holding multiple life insurance policies
What is B) Having a large social media following
900
When considering a BDOT structure, the IRS is primarily concerned with:
A) Where the trust is legally domiciled
B) How much popcorn the beneficiaries consume
C) The grantor’s last known address
D) Whether it involves “income tax ownership” without “estate tax ownership”
What is D) Whether it involves “income tax ownership” without “estate tax ownership”
900
The Secure Act 2.0 introduced a 529-to-Roth IRA rollover option with certain limitations. What is the lifetime maximum that can be rolled over from a 529 to a Roth IRA for the beneficiary?
A) $10,000
B) $35,000
C) $50,000
D) The total 529 account balance
What is B) $35,000
900
First Light Homecare would likely be recommended to a client who:
A) Needs in-home health assistance and care coordination
B) Is interested in tax planning
C) Wants to start investing in property
D) Needs their pets cared for
What is A) Needs in-home health assistance and care coordination
1000
In advising clients with multiple small business interests, which of the following would help minimize CTA compliance burdens?
A) Consolidating ownership under a single holding company if it qualifies as exempt
B) Selling any small business that is not the primary source of income
C) Maintaining less than a 25% ownership in each business
D) Setting up trusts for each business interest to avoid reporting
What is A) Consolidating ownership under a single holding company if it qualifies as exempt
1000
In the current market, high reinsurance costs can affect premium rates. Which of the following best describes reinsurance?
A) Buying additional insurance for high-value policies
B) A policy feature for repeat claims on the same issue
C) Insurance that insurance companies buy to limit their own risks
D) A warranty extension for new insurance products
What is C) Insurance that insurance companies buy to limit their own risks
1000
When a beneficiary has the right to all “income” under IRC §678, what can this “income” mean?
A) Only earned income
B) Any taxable income, per the trust document or fiduciary accounting standards
C) Netflix subscription credits
D) Purely dividends and interest
What is B) Any taxable income, per the trust document or fiduciary accounting standards
1000
When calculating the credit for small businesses starting a new retirement plan under Secure Act 2.0, what is the maximum annual tax credit a qualifying employer may receive in the first three years?
A) Up to $5,000 per year
B) Up to 50% of the costs, capped at $5,000 per year
C) Up to 100% of the costs, capped at $5,000 per year
D) Up to 100% of the costs, capped at $1,000 per employee
What is D) Up to 100% of the costs, capped at $1,000 per employee
1000
Farmers Trust Company helps clients primarily with:
A) Trust administration and wealth management
B) Weekend estate sales
C) CPA licensure
D) Family recipe collection
What is A) Trust administration and wealth management