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CPB Tax Planning & Optimization Flashcards

6 cards from real CPB practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

Read the first 6 CPB Tax Planning & Optimization flashcards as text

  1. What is a Qualified Opportunity Zone (QOZ) investment primarily designed to provide?

    Answer: Tax-advantaged investment in designated economically distressed communities

    QOZ investments allow taxpayers to defer and potentially reduce capital gains taxes by reinvesting those gains into designated distressed communities within 180 days.

  2. Which depreciation system accelerates tax deductions more heavily in the early years of a business asset's life?

    Answer: Modified Accelerated Cost Recovery System (MACRS)

    MACRS is the IRS-required depreciation system for most US business assets, allowing faster deductions in early years through accelerated recovery periods.

  3. What is the primary tax benefit of a Charitable Remainder Trust (CRT) for a high-net-worth private banking client?

    Answer: An income stream for the donor plus an immediate partial charitable deduction

    A CRT provides the donor with an annuity or unitrust income stream, an upfront charitable deduction, and the ability to diversify appreciated assets without immediate capital gains.

  4. Which IRS provision allows owners of pass-through businesses to potentially deduct up to 20% of qualified business income (QBI)?

    Answer: Section 199A deduction

    Section 199A, created by the Tax Cuts and Jobs Act of 2017, allows eligible pass-through business owners to deduct up to 20% of QBI, subject to income and business-type limitations.

  5. What is the tax strategy known as 'bunching' used to accomplish?

    Answer: Concentrating deductible expenses into one tax year to exceed the standard deduction threshold

    Bunching involves deliberately timing deductible expenses (such as charitable contributions or medical costs) into alternating years to surpass the standard deduction and itemize.

  6. A Spousal Lifetime Access Trust (SLAT) allows a married couple to:

    Answer: Utilize the lifetime gift tax exemption while the non-donor spouse retains indirect access to trust assets

    A SLAT lets one spouse gift assets into an irrevocable trust using their lifetime exemption while the other spouse can still benefit as a beneficiary, maintaining indirect access.