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

Gwen is age 51,married,and reported AGI of $102,000 in tax year 2017.She is an active participant in her employer's pension plan.What amount of deductible IRA contribution is disallowed in 2017?

Xavier is a self-employed plumber.His earnings from self-employment,before the Keogh deduction but after deducting half of the self-employment tax,are $80,000.What is his deductible Keogh contribution for 2017?

What is the maximum deductible contribution that can be made to one or more deductible IRAs in each of the following instances? a.A single person,age 51,who is an active participant in an employer-sponsored retirement plan with AGI of $37,000. b.A single person,age 59,who is an active participant in an employer-sponsored retirement plan with AGI of $68,000. c.A single person,age 26,who is an active participant in an employer-sponsored retirement plan with AGI of $64,000.

Regarding a Coverdell Education Savings Account:

If an individual (or spouse)is an active participant in an employer-sponsored retirement plan,he or she cannot make a deductible IRA contribution.

Max retired in 2017 at age 62.During the year he received distributions of $12,000 from his IRA.He made nondeductible contributions of $30,000 to the IRA in prior years and has never received a nontaxable distribution.As of December 31,2017,the value of his IRA was $250,000.Calculate the nontaxable portion of Max's distribution.

All of the following are employer-sponsored plans except:

Randy is entitled to receive monthly payments of $2,500 over his life from his employer's qualified pension plan or he can take $2,300 over his life and the life of his wife.The payments begin May 1,2017.Randy contributed $106,000 to the plan prior to his retirement.Randy is 67 and his wife is 65.Using the simplified method,how much of the payments will be included in Randy's income for 2017 in each of the following independent situations? a.Randy chooses to take payments of $2,500 over his life. b.Randy chooses to take payments of $2,300 over his life and the life of his wife.

Patrick is age 30,single,and has AGI of $101,000.He would like to contribute to a Coverdell Education Savings Account (CESA)for his niece,Eileen.What is the maximum CESA contribution Patrick can make for Eileen in 2017?

Which of the following is not an employer-sponsored retirement plan?

What is the maximum deductible contribution that can be made to one or more deductible IRAs in each of the following instances? a.A single person,age 41,who is not an active participant in an employer-sponsored retirement plan with AGI of $97,000. b.A married couple,ages 33 and 34,neither of whom is an active participant in an employer-sponsored retirement plan.One spouse has W-2 income of $57,000 and the other spouse did not work. c.A married couple,ages 44 and 48.One spouse is covered under an employer-sponsored retirement plan and the other is not.The covered spouse has W-2 income of $125,000 and the non-covered spouse has W-2 income of $32,000.

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

At the end of 2015,Erin was 73 years old and her traditional IRA had a balance of $200,000.She properly withdrew $8,403 from her IRA in 2016.In 2016,her IRA assets earned $25,000.What amount must Erin take as a distribution from her IRA in 2017?

Contributions to a Coverdell Education Savings Account are not subject to AGI phaseout rules.

Exam Company provides a SIMPLE plan for its employees.Under the plan,employees can contribute up to 6% of their salary and Exam Corporation will match the employee's contribution up to 3% of the employee's salary.Ben,age 44,is an employee of Exam Corporation and elects to contribute the maximum amount of his $95,000 salary to the SIMPLE plan.What is the total contribution made to Ben's SIMPLE account? When does Ben's contribution vest? When does the contribution by Exam Company vest? What is the amount contributed to Ben's account if Ben's salary is $210,000?

Max retired in 2017 at age 62.During the year he received distributions of $9,000 from his IRA.He made nondeductible contributions of $20,000 to the IRA in prior years and has never received a nontaxable distribution.As of December 31,2017,the value of his IRA was $150,000.Calculate the taxable portion of Max's distribution.

For all annuity contracts,to determine the expected return,use the IRS tables for either a single life or a dual life annuity.

Kasey is 72 years old.She purchased a single life annuity contract that will pay her $10,000 per year for 15 years.The expected return under the contract is:

Zena must start taking distributions from her traditional IRA beginning April 1,2017.At the end of 2016,the plan had a balance of $220,000 and Zena was 71 years old.What minimum amount must Zena take as a distribution from the IRA beginning April 1,2017?

In order to obtain and retain qualified status,a pension or profit-sharing plan must not discriminate in favor of highly compensated employees which include: