AFIP AFIP Taxation and Estate Planning in F&I 2

Question 1

What is the federal estate tax exemption threshold (as of recent law) that determines whether an estate owes federal estate tax?

Accepted Answer

Approximately $12–13 million per individual (indexed for inflation)

Answer

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.

Question 2

In F&I, why is it important to understand a customer's estate planning status when selling life insurance products?

Accepted Answer

To ensure the beneficiary designations align with the customer's estate plan and avoid probate complications

Answer

Proper beneficiary designations on insurance policies ensure proceeds pass directly to intended heirs outside probate, consistent with the customer's overall estate plan.

Question 3

Which type of IRS form is issued to report interest income paid to a lender that exceeds $600 in a tax year?

Accepted Answer

Form 1098

Answer

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.

Question 4

A 'transfer on death' (TOD) vehicle title designation allows:

Accepted Answer

The vehicle title to pass directly to a named beneficiary at death without probate

Answer

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.

Question 5

For a business that purchases a vehicle for commercial use, Section 179 of the IRS tax code allows:

Accepted Answer

An immediate expensing deduction for the cost of qualifying business property in the year of purchase

Answer

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.

(AFIP) Certified Association of Finance & Insurance Professionals Practice Test

(AFIP) Certified Association of Finance & Insurance Professionals Practice Test

AFIP AFIP Taxation and Estate Planning in F&I 2