Wednesday, December 30, 2009

Tax Forms

Even though NASAA claims that their Series 65 and 66 exams are not based on memorization, their exams sure do churn out their share of mindless memorization questions. Like this one:

A limited partnership uses which of the following forms when reporting taxable income?
A. 1040
B. 1120
C. 1065
D. 1031

EXPLANATION: the 1040 is used by individuals and sole proprietors. A 1031 tax-free exchange can be done on real estate investments, and the 1120 is used by corporations. Form 1065 is used by partnerships.



  1. exactly - I talked to the NYS Administrator today and she was claiming the test was made up by adviser's and was a valid test of one's ability to do a good job. I say there are a lot of memorization questions that no one needs to know, ones that CPA's need to know and estate atty's. Those of us that work with professional to come up wit a team plan don't need to know other fields as well as ours.

  2. exactly--or, if you DO need to know it, let's put 10 questions on the exam and be clear about what it is you're supposed to know. This nonsense of asking 1 or 2 random questions about a supposedly big, important topic is BS. To pull one sentence out of the Uniform Prudent Investor Act, or Item #27 on a Q & A on NASAA's website is for weasels only.