Question 1

Which of the following is true regarding an SEP?

Accepted Answer

A) Cannot discriminate in favor of highly compensated employees. 
B) Deductible contributions cannot exceed the lower of 15% of the employee's compensation or $54,000. 
C) Self-employed individuals cannot create and contribute to an SEP. 
D) The plan must cover all employees who have reached the age of 18,who have worked for the employer for at least two of the preceding five years,and who received at least $600 in compensation. 
A) Cannot discriminate in favor of highly compensated employees. 
B) Deductible contributions cannot exceed the lower of 15% of the employee's compensation or $54,000. 
C) Self-employed individuals cannot create and contribute to an SEP. 
D) The plan must cover all employees who have reached the age of 18,who have worked for the employer for at least two of the preceding five years,and who received at least $600 in compensation. A

Question 2

Which of the following statements is incorrect?

Accepted Answer

A) Tax-deferred plans have an accumulation period and a distribution period. 
B) Normally,if a retirement plan is funded with dollars that have already been taxed,the distributions will be taxed. 
C) During the accumulation period of a qualified retirement plan no taxes are due on the earnings from the plan investments. 
D) Contributions to retirement plans are often limited in amount. 
A) Tax-deferred plans have an accumulation period and a distribution period. 
B) Normally,if a retirement plan is funded with dollars that have already been taxed,the distributions will be taxed. 
C) During the accumulation period of a qualified retirement plan no taxes are due on the earnings from the plan investments. 
D) Contributions to retirement plans are often limited in amount. B

Question 3

Contributions to a Coverdell Education Savings Account can only be made by the parents or grandparents of a child under the age of 18.

Accepted Answer

A) True 
 B)False  False

Question 4

In 2017,the maximum annual contribution to a SIMPLE pension plan for an employee under the age of 50 is:

Accepted Answer

A) $5,500 
B) $12,500 
C) $18,000 
D) $54,000 
A) $5,500 
B) $12,500 
C) $18,000 
D) $54,000

Question 5

Valerie and Marty are both age 51 and file a joint return.They have one child who is age 17.They have combined AGI in 2017 of $180,000.What is their maximum permitted contribution to a Coverdell Education Savings Account for 2017 assuming no other persons make contributions?

Accepted Answer

A) $0. 
B) $2,000. 
C) $5,500. 
D) $6,500. 
A) $0. 
B) $2,000. 
C) $5,500. 
D) $6,500.

Question 6

Quentin and Janelle would like to establish a Coverdell Education Savings Account (CESA)for their daughter,age 5,and their nephew (the son of Quentin's brother),age 8.Their AGI is $145,000.Quentin's brother has already contributed $1,500 to a CESA for his son.
a.What is the maximum amount Quentin and Janelle can contribute to a CESA for their daughter and their nephew?
b.If their AGI were $208,000,what is the maximum amount they can contribute to a CESA for their daughter and their nephew?

Accepted Answer

a.Quentin and Janelle can contribute $2,

Question 7

Distributions from a Coverdell Education Savings Account are tax-free to the beneficiary if they are used for his or her qualified education expenses.

Accepted Answer

A) True 
 B)False

Question 8

Under what circumstances might an individual want to establish an annuity contract in retirement?

Accepted Answer

When a person retires,he or she may be t

Question 9

Which of the following statements is incorrect?

Accepted Answer

A) An annuity is a series of payments under a contract. 
B) Annuity payments are fixed in amount. 
C) Annuity payments may be for a specified period of time or for the life of the contract holder. 
D) The proportional amount of an annuity payment that is attributable to the cost of the contract is tax-free. 
A) An annuity is a series of payments under a contract. 
B) Annuity payments are fixed in amount. 
C) Annuity payments may be for a specified period of time or for the life of the contract holder. 
D) The proportional amount of an annuity payment that is attributable to the cost of the contract is tax-free.

Question 10

Puri is a self-employed Spanish teacher.Her earnings from self-employment before the Keogh deduction but after deducting half of the self-employment tax are $120,000.What is her maximum deductible Keogh contribution for 2017?

Accepted Answer

A) $96,000. 
B) $54,000. 
C) $30,000. 
D) $24,000. 
A) $96,000. 
B) $54,000. 
C) $30,000. 
D) $24,000.

Question 11

Which of the following statements is incorrect?

Accepted Answer

A) An annuity is a series of payments pursuant to a contract. 
B) A payment to a beneficiary from a pension plan is called a distribution. 
C) Contributions to a pension plan can only be made by the beneficiary. 
D) With a qualified pension plan,earnings on plan assets are not taxed in the year earned. 
A) An annuity is a series of payments pursuant to a contract. 
B) A payment to a beneficiary from a pension plan is called a distribution. 
C) Contributions to a pension plan can only be made by the beneficiary. 
D) With a qualified pension plan,earnings on plan assets are not taxed in the year earned.

Question 12

Keisha established a Roth IRA in 2007.She contributes the maximum amount each year for the next 20 years and retires when she is 65.At the time of her retirement,the account has a balance of $248,000,which is made up of $100,000 in contributions and the balance in earnings.What amount can Keisha withdraw tax-free from the Roth IRA each year during her retirement?

Accepted Answer

Keisha can withdraw as much as

Question 13

To calculate the taxable amount of an annuity payment,the taxpayer must determine the expected return under the contract.

Accepted Answer

A) True 
 B)False

Question 14

Defined-benefit plans provide for a stream of definitely determinable benefits.

Accepted Answer

A) True 
 B)False

Question 15

Venkat is age 32,single,and reported AGI of $68,000 in tax year 2017.He is an active participant in his employer's pension plan.What is the maximum deductible IRA contribution he can make in 2017?

Accepted Answer

A) $0. 
B) $2,200. 
C) $3,300. 
D) $5,500. 
A) $0. 
B) $2,200. 
C) $3,300. 
D) $5,500.

Question 16

Jill is single,age 27,and reported AGI of $64,000 in tax year 2017.She is an active participant in her employer's pension plan.What is the maximum deductible Roth IRA contribution she can make in 2017?

Accepted Answer

A) $0. 
B) $1,100. 
C) $4,400. 
D) $5,500. 
A) $0. 
B) $1,100. 
C) $4,400. 
D) $5,500.

Question 17

Which of the following statements regarding Individual Retirement Accounts (IRA)is incorrect?

Accepted Answer

A) Contributions to a conventional IRA may be tax-deductible while contributions to a Roth IRA are never tax-deductible. 
B) Excess contributions to an IRA are subject to an excise tax. 
C) Because IRA contributions are based on compensation,a non-working spouse cannot make a contribution to an IRA. 
D) Once a taxpayer reaches age 70½,deductible contributions cannot be made to a conventional IRA. 
A) Contributions to a conventional IRA may be tax-deductible while contributions to a Roth IRA are never tax-deductible. 
B) Excess contributions to an IRA are subject to an excise tax. 
C) Because IRA contributions are based on compensation,a non-working spouse cannot make a contribution to an IRA. 
D) Once a taxpayer reaches age 70½,deductible contributions cannot be made to a conventional IRA.

Question 18

All tax-deferred pension plans have an accumulation period and a distribution period.

Accepted Answer

A) True 
 B)False

Question 19

Benjamin and Ester file a joint return and have AGI of $165,000.Both are active participants in their employer's pension plan.They have one child,Emily,who is age 8.Emily's grandparents contributed $1,000 to a Coverdell Education Savings Account for Emily in 2017.What is the maximum permitted Coverdell Education Savings Account contribution that Benjamin and Ester can make in 2017?

Accepted Answer

A) $0. 
B) $1,000. 
C) $2,000. 
D) $5,500. 
A) $0. 
B) $1,000. 
C) $2,000. 
D) $5,500.

Question 20

Charlotte is age 52,married,and reported AGI of $105,000 in tax year 2017.She is an active participant in her employer's pension plan.What is the disallowed portion of her deductible IRA contribution in 2017?

Accepted Answer

A) $6,500. 
B) $0. 
C) $1,950. 
D) $4,550. 
A) $6,500. 
B) $0. 
C) $1,950. 
D) $4,550.

Which of the following is true regarding an SEP?

Which of the following statements is incorrect?

Contributions to a Coverdell Education Savings Account can only be made by the parents or grandparents of a child under the age of 18.

In 2017,the maximum annual contribution to a SIMPLE pension plan for an employee under the age of 50 is:

Valerie and Marty are both age 51 and file a joint return.They have one child who is age 17.They have combined AGI in 2017 of $180,000.What is their maximum permitted contribution to a Coverdell Education Savings Account for 2017 assuming no other persons make contributions?

Distributions from a Coverdell Education Savings Account are tax-free to the beneficiary if they are used for his or her qualified education expenses.

Under what circumstances might an individual want to establish an annuity contract in retirement?

Which of the following statements is incorrect?

Puri is a self-employed Spanish teacher.Her earnings from self-employment before the Keogh deduction but after deducting half of the self-employment tax are $120,000.What is her maximum deductible Keogh contribution for 2017?

Which of the following statements is incorrect?

To calculate the taxable amount of an annuity payment,the taxpayer must determine the expected return under the contract.

Defined-benefit plans provide for a stream of definitely determinable benefits.

Venkat is age 32,single,and reported AGI of $68,000 in tax year 2017.He is an active participant in his employer's pension plan.What is the maximum deductible IRA contribution he can make in 2017?

Jill is single,age 27,and reported AGI of $64,000 in tax year 2017.She is an active participant in her employer's pension plan.What is the maximum deductible Roth IRA contribution she can make in 2017?

Which of the following statements regarding Individual Retirement Accounts (IRA)is incorrect?

All tax-deferred pension plans have an accumulation period and a distribution period.

Charlotte is age 52,married,and reported AGI of $105,000 in tax year 2017.She is an active participant in her employer's pension plan.What is the disallowed portion of her deductible IRA contribution in 2017?

Introduction to Taxation, the Income Tax Formula, and Form 1040EZ

Expanded Tax Formula, forms 1040A and 1040, and Basic Concepts

Gross Income: Inclusions and Exclusions

Adjustments for Adjusted Gross Income

Itemized Deductions

Self-Employed Business Income Line 12 of Form 1040 and Schedule C

Capital Gains and Other Sales of Property Schedule D and Form 4797

Rental Property, Royalties, and Income From Flow- Through Entities Line 17, form 1040, and Schedule E

Tax Credits Form 1040,lines 48 Through 54 and Lines 66A Through 73

Payroll Taxes

Special Property Transactions

At-Riskpassive Activity Loss Rules and the Individual Alternative Minimum Tax

Partnership Taxation

Corporate Taxation

Filters

Exam 11: Retirement and Other Tax-Deferred Plans and Annuities

Which of the following is true regarding an SEP?

Which of the following statements is incorrect?

Contributions to a Coverdell Education Savings Account can only be made by the parents or grandparents of a child under the age of 18.

In 2017,the maximum annual contribution to a SIMPLE pension plan for an employee under the age of 50 is:

Valerie and Marty are both age 51 and file a joint return.They have one child who is age 17.They have combined AGI in 2017 of $180,000.What is their maximum permitted contribution to a Coverdell Education Savings Account for 2017 assuming no other persons make contributions?

Distributions from a Coverdell Education Savings Account are tax-free to the beneficiary if they are used for his or her qualified education expenses.

Under what circumstances might an individual want to establish an annuity contract in retirement?

Which of the following statements is incorrect?

Puri is a self-employed Spanish teacher.Her earnings from self-employment before the Keogh deduction but after deducting half of the self-employment tax are $120,000.What is her maximum deductible Keogh contribution for 2017?

Which of the following statements is incorrect?

To calculate the taxable amount of an annuity payment,the taxpayer must determine the expected return under the contract.

Defined-benefit plans provide for a stream of definitely determinable benefits.

Venkat is age 32,single,and reported AGI of $68,000 in tax year 2017.He is an active participant in his employer's pension plan.What is the maximum deductible IRA contribution he can make in 2017?

Jill is single,age 27,and reported AGI of $64,000 in tax year 2017.She is an active participant in her employer's pension plan.What is the maximum deductible Roth IRA contribution she can make in 2017?

Which of the following statements regarding Individual Retirement Accounts (IRA)is incorrect?

All tax-deferred pension plans have an accumulation period and a distribution period.

Charlotte is age 52,married,and reported AGI of $105,000 in tax year 2017.She is an active participant in her employer's pension plan.What is the disallowed portion of her deductible IRA contribution in 2017?

Introduction to Taxation, the Income Tax Formula, and Form 1040EZ

Expanded Tax Formula, forms 1040A and 1040, and Basic Concepts

Gross Income: Inclusions and Exclusions

Adjustments for Adjusted Gross Income

Itemized Deductions

Self-Employed Business Income Line 12 of Form 1040 and Schedule C

Capital Gains and Other Sales of Property Schedule D and Form 4797

Rental Property, Royalties, and Income From Flow- Through Entities Line 17, form 1040, and Schedule E

Tax Credits Form 1040,lines 48 Through 54 and Lines 66A Through 73

Payroll Taxes

Special Property Transactions

At-Riskpassive Activity Loss Rules and the Individual Alternative Minimum Tax

Partnership Taxation

Corporate Taxation

Filters