CRPC Practice Exam 2 EXAM LATEST 2024- 2025 ACTUAL EXAM QUESTIONS AND CORRECT DETAILED ANSWERS (VERIFIED ANSWERS) |ALREADY GRADED A+

CRPC Practice Exam 2 EXAM LATEST 2024-
2025 ACTUAL EXAM QUESTIONS AND
CORRECT DETAILED ANSWERS (VERIFIED
ANSWERS) |ALREADY GRADED A+
Which one of the following cannot achieve the estate planning goal of providing for
incapacity?
A) trust
B) disability insurance
C) durable power of attorney
D) will - CORRECT ANSWER --D
A durable power of attorney and a trust can be used to manage the financial affairs of
an incompetent person. Disability insurance can be used to replace income when an
incapacitated person is no longer able to work. Because a will is only effective at death,
it cannot be used for incapacity planning.
Annette, a single taxpayer, has lived in her principal residence for 18 months, and is
relocating to another part of the country due to health reasons. She will have a gain of
$400,000 on the sale.
Which one of the following is correct with respect to the sale of her home?
A) She will qualify for an exclusion of $300,000 ($400,000 gain times 18/24).
B) She will qualify for an exclusion of $187,500 ($250,000 maximum exclusion times
18/24) on the sale of the home.
C)She will qualify for an exclusion of $400,000, because the two-year rule is waived if
the move is due to health reasons.
D) She will qualify for no exclusion because she did not use the home as the principal
residence for two of the last five years. - CORRECT ANSWER --B
The general rule is that a single person may exclude up to $250,000 in the sale of the
home, provided the home has been used as the principal residence for two of the
previous five years. A partial exclusion is available if the two-year rule is not met due to
health, job, or other unforeseen circumstances. The exclusion is the percentage of the
two-year period that the principal residence test is met, times the full exclusion amount.
Which of the following statements comparing the suitability standard and the fiduciary
standard is correct?
A) The suitability standard and the fiduciary standard are essentially the same thing.
B) Both approaches require looking out for the best interest of the client.
C) Verbal disclosure may be adequate under the suitability standard but not the
fiduciary standard.
D) Both standards are primarily solution-driven rather than product-driven. - CORRECT
ANSWER --C
The suitability standard is often product-driven (is the product suitable?) whereas the
fiduciary standard is solution-driven (what is in the best interest of the client?). The
fiduciary standard is a higher standard and requires written disclosure, whereas in
certain circumstances verbal disclosure may be adequate under the suitability standard.
Roberto and Julia, a married couple with two young children and minimal assets, are
considering creating an estate plan. Which one of the following statements is correct? -
CORRECT ANSWER --They should create an estate plan even though their assets
do not exceed the applicable exclusion amount.
There are many nontax reasons for developing an estate plan, such as planning to meet
the needs of their dependent children, proper distribution of assets, and efficient transfer
of assets at death.
Owning property in joint tenancy with right of survivorship (JTWROS) is a will substitute
because - CORRECT ANSWER --the property passes outside of probate.
It is precisely because JTWROS does pass property outside of probate that it is a will
substitute. While a true statement, the fact that JTWROS property may be owned by
more than two owners does not make it a will substitute and therefor