RFC Cheat Sheet 2026

The 30 highest-yield RFC facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. A client's operating cash flow is $80,000 but net income is $110,000. Which scenario BEST explains this gap? → Significant increase in accounts receivable
2. Which of the following best describes the 'three-year rule' under IRC §2035? → Life insurance gifted within three years of death is pulled back into the gross estate
3. When a conflict arises between standard procedures and a unique situation in Tax Planning & Optimization, what should a RFC professional prioritize? → Safety and ethical obligations while seeking expert consultation
4. Medicare Part B covers which of the following services? → Outpatient physician visits and preventive services
5. A 'pour-over will' in estate planning serves which primary purpose? → It directs all probate assets into the decedent's revocable living trust at death
6. An RFC client wants income with modest capital appreciation. Which asset allocation is MOST appropriate? → 40% equities / 60% bonds
7. A married couple wants to maximize lifetime Social Security benefits. The higher earner should generally delay benefits to age 70 primarily to: → Maximize the survivor benefit for the lower-earning spouse
8. Which of the following defined contribution plan types has the highest total contribution limit for self-employed individuals? → Solo 401(k)
9. When does a Roth IRA qualified distribution occur, ensuring both tax-free and penalty-free treatment? → After the 5-year holding period and the owner is at least age 59½, disabled, or deceased
10. Under the wash sale rule, which of the following transactions would disallow a capital loss deduction? → Selling stock at a loss and buying a call option on the same stock 20 days later
11. Which Social Security benefit is NOT reduced if claimed before the worker's full retirement age? → Disabled widow's benefit claimed at age 50
12. Under IRC Section 409A, which of the following is NOT a permissible distribution trigger for a nonqualified deferred compensation plan? → The executive's voluntary request at any time
13. A client has $15,000 in credit card debt at 22% APR and $20,000 in a car loan at 5%. Using the avalanche method, which debt should be prioritized? → Credit card, because it has the higher interest rate
14. Under RFC debt management principles, which action BEST improves a client's credit utilization ratio? → Paying down revolving balances below 30% of limits
15. What is the PRIMARY purpose of continuing education requirements in Cash Flow & Debt Management for RFC professionals? → Maintaining current knowledge and competency as the field evolves
16. A client establishes a Spousal Lifetime Access Trust (SLAT) for the benefit of their spouse. A key risk of this strategy is: → If the marriage ends in divorce, the grantor loses indirect access to the trust assets
17. An RFC charging an asset-based fee has an inherent conflict of interest when recommending: → Strategies that reduce the client's investable assets, such as paying off debt
18. For tax purposes, the 'kiddie tax' is most relevant to education funding strategies because it: → Taxes a child's unearned income above a threshold at the parent's marginal rate
19. Which primary advantage does a cross-purchase buy-sell agreement provide to surviving owners compared to an entity purchase (stock redemption) agreement? → Surviving owners receive a stepped-up cost basis in the purchased interest
20. Under the SECURE Act, most non-spouse beneficiaries of inherited IRAs must now withdraw all funds within how many years? → 10 years
21. What is the maximum Social Security benefit for a worker who retires at full retirement age in 2024? → $3,822
22. A client age 62 asks about the 'glide path' concept. What does this refer to in target-date fund investing? → The shift from aggressive to conservative allocation as the target date nears
23. What is the penalty for failing to take a required minimum distribution from a traditional IRA under current law (post-SECURE 2.0)? → 25% of the amount not withdrawn
24. A client's debt-to-income ratio is 42%. From an RFC perspective, this MOST likely indicates: → The client may face difficulty qualifying for additional credit and should reduce debt
25. A 55-year-old client wants to access her 401(k) funds without penalty due to separation from service. Which rule allows this? → Rule of 55
26. Which of the following statements about umbrella liability insurance is correct? → It provides excess liability coverage above the limits of underlying policies
27. A client has a net operating loss (NOL) from a sole proprietorship. Under current tax law, how far forward can this loss be carried? → Indefinitely, subject to an 80% taxable income limitation
28. A self-employed RFC client earns $200,000 net self-employment income. Which retirement plan allows the largest tax-deductible contribution in 2024? → Defined benefit pension plan
29. Which statement about the 'debt snowball' method is MOST accurate for an RFC advising clients? → It provides psychological motivation by eliminating smaller debts first
30. In Insurance Planning & Risk Management, what is the FIRST step a RFC professional should take when encountering a new case or situation? → Conduct a comprehensive assessment and gather all relevant information