Series 66

Study Question of the Month – September

This month’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 6, 7, 62, 65, and 66. –ANSWER POSTED– Continue reading

This month’s study question from the Solomon Online Exam Simulator question database is now available.

Question (Relevant to the Series 6, Series 7, Series 62, Series 65, and Series 66):

Your client owns stock mutual funds in an account with automatic reinvestment of dividends and capital gains. What happens to the value of his account on ex-dividend dates?

Answers:

A. The value of the account shrinks by the amount of the distribution

B. The value of the account grows by the amount of the distribution, and it is a taxable event for him

C. The value of the account remains unchanged, and it is a taxable event for him

D. The value of the account remains unchanged, and it is not a taxable event for him

Correct Answer: C. The value of the account remains unchanged, and it is a taxable event for him

Rationale: Upon distribution and reinvestment of dividends or capital gains, the client ends up with more shares, and each share is worth slightly less. The value of the account is unchanged. The mutual fund company reports these distributions annually to the IRS, and they are treated as taxable income.

Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.

Study Question of the Week: August 6, 2014 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 6, Series 7, Series 62, Series 65, Series 66, and Series 99. –ANSWER POSTED– Continue reading

This week’s study question from the Solomon Online Exam Simulator question database is now available.

Study ? of the Week

Question (Relevant to the Series 6, Series 7, Series 62, Series 65, Series 66, and Series 99):

A client wants to open a custodial IRA account for his minor daughter who has earned a couple thousand dollars babysitting. Which of the following would be the best choice?

Answers:

A. Traditional IRA

B. Roth IRA

C. SIMPLE IRA

D. SEP IRA

Correct Answer: B. Roth IRA

Rationale: SEP and Simple IRAs are for small businesses. A traditional IRA would work but since the client’s daughter doesn’t have enough income to take advantage of the tax deduction benefit from a traditional IRA, the Roth IRA is the best choice since it will permit her to eventually withdraw tax-free.

Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.

Study Question of the Week: July 23, 2014 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 6, 7, 65, and 66. –ANSWER POSTED– Continue reading

This week’s study question from the Solomon Online Exam Simulator question database is now available.

Study ? of the Week

Question (Relevant to the Series 6, Series 7, Series 65, and Series 66):

The IRS uses the FIFO method for taxing:

Answers:

A. Withdrawals from a life insurance contract

B. Withdrawals in excess of the basis in a variable annuity contract

C. Loans from a life insurance contract

D. None of the choices listed

Correct Answer: A. Withdrawals from a life insurance contract

Rationale: Life insurance enjoys “first in, first out“ treatment from the IRS. Annuities are taxed on a LIFO basis, and money borrowed from a life insurance contract is not taxed at all.

Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.

Study Question of the Week: July 16, 2014 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 6, 7, 62, 65, 66, and 82. –ANSWER POSTED– Continue reading

This week’s study question from the Solomon Online Exam Simulator question database is now available.

Study ? of the Week

Question (Relevant to the Series 6, Series 7, Series 62, Series 65, Series 66, and Series 82):

Ross receives 50 shares of ABC Co. as a gift, then later inherits an additional 50 shares of ABC Co. The shares were all originally purchased at $10/share. When Ross receives the shares as a gift, they are worth $20/share. When Ross inherits the shares, they are worth $30/share. When Ross eventually all sells the shares, they are worth $50/share. What is Ross’s total cost basis when he sells the shares?

Answers:

A. $1,000

B. $2,000

C. $2,500

D. $5,000

Correct Answer: B. $2,000

Rationale: Inherited shares received a stepped up cost basis based on their market value at the time of the prior owner’s death. Shares received as a gift maintain their original cost basis. So the cost basis of the inherited shares is $1,500 ($30/share * 50 shares) while the cost basis of the gifted shares is $500 ($10/share * 50 shares). Adding them together gives a total cost basis of $2,000.

Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.

Testimonial Tuesday: June 3, 2014 Edition

“I used Solomon Exam Prep for both the Series 7 and the Series 66 which I took within a couple of months of each other. I smoked both tests with an 85% and an 88%…” Continue reading

“I used Solomon Exam Prep for both the Series 7 and the Series 66 which I took within a couple of months of each other. I smoked both tests with an 85% and an 88%. Well above the passing score. The books have just enough humor to keep things interesting and the practice tests and quizzes are phenomenal. If you want to get the most out of these programs pound out as many practice test as you can.” -K. Nick Thoeni, Gilroy, CA

Read more reviews here: Solomon Exam Prep Reviews

Study Question of the Week: May 7, 2014 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 6, Series 7, Series 52, Series 62, Series 65, and Series 66. –ANSWER POSTED– Continue reading

This week’s study question from the Solomon Online Exam Simulator question database is now available.

Study ? of the Week

Question (Relevant to the Series 6, Series 7, Series 52, Series 62, Series 65, and Series 66):

Concerning municipal bonds issued by the city of Baltimore, Maryland:

Answers:

A. If you live in the state of Maryland, you will pay state tax on the interest you earn

B. If you live in the state of Virginia, you will not pay state tax on the interest you earn

C. If you live in the state of Maryland, you will pay federal capital gains tax on any profits you realize when you sell the bonds

D. If you live in the state of Virginia, you will not pay federal capital gains tax on any profits you realize when you sell the bonds

Correct Answer: C. If you live in the state of Maryland, you will pay federal capital gains tax on any profits you realize when you sell the bonds

Rationale: Interest income earned on municipal bonds is not taxable at the federal level, and only taxable at the state level outside the state of their issuance. Capital gains realized upon the sale of such bonds are subject to capital gains tax regardless of the taxpayer’s state of residence.

Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.

Study Question of the Week: April 9, 2014 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 6, Series 7, Series 24, Series 26, Series 52, Series 53, Series 66, Series 79, and Series 99. –ANSWER POSTED– Continue reading

This week’s study question from the Solomon Online Exam Simulator question database is now available.

Study ? of the Week

Question (Relevant to the Series 6, Series 7, Series 24, Series 26, Series 52, Series 53, Series 66, Series 79, and Series 99):

Which of the following are correct dollar minimums for the Bank Secrecy Act’s requirements for broker-dealers?

I. $3,000 or more received or transmitted must be recorded in a monetary instrument log (MIL)

II. $5,000 or more received or transmitted must be recorded in a monetary instrument log (MIL)

III. Cash transaction of $5,000 or more must be reported to the IRS

IV. Cash transaction of $10,000 or more must be reported to the IRS

Answers:

A. I and III

B. I and IV

C. II and III

D. II and IV

Correct Answer: B. I and IV

Rationale: In any one day, a transmittal of $3,000 or more or a cash transaction must be recorded in a monetary instrument log (MIL) and cash transaction of $10,000 or more must be reported to the IRS.

Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.

Testimonial Tuesday: April 8, 2014 Edition

“I sat for the Series 66 on March 16th. I got an 85. I give all kudos to Solomon. The study materials were excellent.” Continue reading

“I sat for the Series 66 on March 16th. I got an 85. I give all kudos to Solomon. The study materials were excellent.”
-William Crull, Metairie, LA

Read more reviews here: Solomon Exam Prep Reviews

Study Question of the Week: March 19, 2014 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 6, Series 7, Series 62, Series 65, Series 66, Series 79 and Series 82. –ANSWER POSTED– Continue reading

This week’s study question from the Solomon Online Exam Simulator question database is now available.

Study ? of the Week

Question (Relevant to the Series 6, Series 7, Series 62, Series 65, Series 66, Series 79 and Series 82):

Which of the following statements concerning REITs (real estate investment trusts) and RELPs (real estate limited partnerships) are true?

I. REITs pass through income, but not losses, to shareholders

II. RELPs pass through both income and losses to shareholders

III. REITs are highly illiquid

IV. RELPs are highly liquid

Answers:

A. I and III

B. II and IV

C. I and II

D. I, II, III and IV

Correct Answer: C. I and II

Rationale: Statements I and II are both true, but statements III and IV are reversed. Limited partnership investments are almost always illiquid, while REITs are highly liquid.

Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.

Study Question of the Week: March 5, 2014 Edition

This week’s study question from the Solomon Online Exam Simulator question database is now available. Relevant to the Series 7, Series 24, Series 62, Series 65, Series 66, and Series 99. –ANSWER POSTED– Continue reading

This week’s study question from the Solomon Online Exam Simulator question database is now available.

Study ? of the Week

Question (Relevant to the Series 7, Series 24, Series 62, Series 65, Series 66, and Series 99):

All the following statements regarding Roth IRAs are correct EXCEPT:

Answers:

A. Contributions to a Roth IRA are tax deductible up to specified limits

B. Earnings in a Roth IRA accrue income tax-free

C. Distributions from a Roth IRA may be tax-free

D. Roth IRAs are subject to the same contribution limits as regular IRAs

Correct Answer: A. Contributions to a Roth IRA are tax deductible up to specified limits

Rationale: Roth IRAs are individual retirement accounts that are funded with after-tax contributions. Individuals can contribute to their Roth IRAs up to the IRS maximum contribution limit. Earnings within the Roth IRA accrue tax-free and distributions from the Roth IRA may also be tax-free when certain criteria are met.

Weekly study questions are from Solomon’s industry-leading Online Exam Simulator.