TEST UPDATES March 2018

There are numerous updates. Most coming from the new tax law. When these types of changes occur they are removed from testing for roughly 6 months.

529 College Plans

529s can now be used for all education, including K-12 education. There is, however, a limit to $10,000 per year (per child) to be used from 529 for K-12 education.

Liquidation Order

The liquidation order in case of Bankruptcy has also changed. It is now, from FIRST to get paid to LAST is

FIRST Secured Bonds
  Wages
  Taxes
  General Creditors and Debentures
  Subordinated Debentures
  Preferred Stock
LAST Common Stock

Remember the order by SWTGdSPC: Serve Wine To Great Dancers So Peace Continues, or Serve Wine Two Glasses So Peace Continues

Dividend Income Exclusion

The corporate dividend exclusion ratio was 70%, it has been reduced now to 50%. That means only half of the income corporations receive in dividends is excluded from taxation now.

Generic Retail Communications

So long as no specifics are given (no fund name or similar), generic advertisements do not need to be filed with FINRA.

Immediate Family Members

For purposes of lending and borrowing, “immediate family” now includes persons not directly related to the person but are still gettings some financial support, be it directly or indirectly from that person.

Insider Trading Penalty

The Treble Damages (3x money illegally gained or loss illegally prevented or $1,000,000) is now $1,000,000 indexed for inflation.

Gift Tax Limit

The Gift Tax limit has been raised $1,000 from $14,000 to $15,000. That means 529s can have a max contribution of $15,000/year/person. A couple could contribute $30,000 per year per student. With the 5-year acceleration that is a single person able to gift away $75,000, and a couple $150,000.

Regular Way Settlement

As of Sept 5, 2017, regular way settlement for Corporate Securities became 2 days. Reg-T then changed to 4 days

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