AFIP Taxation and Estate Planning in F&I Flashcards
6 cards from real AFIP practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 6 AFIP Taxation and Estate Planning in F&I flashcards as text
What is the federal estate tax exemption threshold (as of recent law) that determines whether an estate owes federal estate tax?
Answer: Approximately $12–13 million per individual (indexed for inflation)
The Tax Cuts and Jobs Act of 2017 raised the federal estate tax exemption to over $12 million per individual, indexed for inflation, though it is set to revert unless Congress acts.
In F&I, why is it important to understand a customer's estate planning status when selling life insurance products?
Answer: To ensure the beneficiary designations align with the customer's estate plan and avoid probate complications
Proper beneficiary designations on insurance policies ensure proceeds pass directly to intended heirs outside probate, consistent with the customer's overall estate plan.
Which type of IRS form is issued to report interest income paid to a lender that exceeds $600 in a tax year?
Answer: Form 1098
Form 1098 (Mortgage Interest Statement) is issued by lenders to report mortgage interest received; for auto loans, interest paid is generally not reported on a tax form to the borrower.
A 'transfer on death' (TOD) vehicle title designation allows:
Answer: The vehicle title to pass directly to a named beneficiary at death without probate
A TOD designation on a vehicle title allows the named beneficiary to claim the vehicle directly from the DMV after the owner's death, bypassing probate.
For a business that purchases a vehicle for commercial use, Section 179 of the IRS tax code allows:
Answer: An immediate expensing deduction for the cost of qualifying business property in the year of purchase
Section 179 allows businesses to deduct the full purchase price of qualifying vehicles and equipment in the year placed in service rather than depreciating over multiple years.
What is 'gift tax' in the context of transferring a vehicle to a family member?
Answer: A federal tax on transfers of property by gift that exceed the annual exclusion amount
Federal gift tax applies to gifts exceeding the annual exclusion ($18,000 per recipient in 2024), though a lifetime exemption means most people never actually pay it.