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
What is the annual federal gift tax exclusion amount per recipient for 2024?
Answer: $18,000
The annual gift tax exclusion for 2024 is $18,000 per recipient, allowing tax-free gifts up to that amount without using lifetime exemption.
Which tax strategy involves deliberately selling investments at a loss to offset realized capital gains?
Answer: Tax-loss harvesting
Tax-loss harvesting involves selling depreciated securities to realize losses that can offset capital gains and up to $3,000 of ordinary income annually.
What is the federal long-term capital gains tax rate applicable to the highest income bracket?
Answer: 20%
The maximum federal long-term capital gains tax rate is 20%, applied to taxpayers in the highest ordinary income bracket.
Which retirement account allows qualified withdrawals in retirement to be completely tax-free?
Answer: Roth IRA
A Roth IRA is funded with after-tax dollars, so qualified distributions in retirement are entirely tax-free, including earnings.
The 'step-up in basis' rule provides that inherited assets receive a cost basis equal to:
Answer: The fair market value on the date of the decedent's death
The step-up in basis resets an inherited asset's cost basis to its fair market value at the decedent's date of death, eliminating embedded capital gains.
Which type of trust is most effective for removing assets from a taxable estate because it cannot be revoked?
Answer: Irrevocable trust
An irrevocable trust permanently transfers ownership of assets out of the grantor's estate, reducing estate tax exposure since the grantor relinquishes control.