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

Damian is age 79.He purchased a single life annuity contract that will pay him $4,000 per month for life.The expected return on the contract is:

Patrick is entitled to receive monthly payments of $1,500 over his life from his employer's qualified pension plan or he can take $1,300 monthly over his life and the life of his wife.The payments begin January 1,2017.He contributed $85,250 to the plan prior to his retirement.Patrick is 64 and his wife is 62.Using the simplified method,how much of the payments will be included in Patrick's taxable income for 2017 if he chooses to take $1,300 monthly over his life and the life of his wife?

In the case of defined-contribution plans,in 2017 what are the maximum contribution limits by an employee under the age of 50 to a qualified pension plan,a 401(k)plan,a Keogh plan,SEP,and SIMPLE plan?

Which of the following statements is correct?

Individuals who are active participants in an employer-sponsored retirement plan may make a deductible contribution to a traditional IRA in certain circumstances.

What are some of the significant tax benefits for both employees and employers associated with a qualified pension plan?

Hyman is age 34,single,and has AGI of $130,000.He would like to contribute to a Coverdell Education Savings Account (CESA)for his niece,Danielle.Danielle's father has already contributed $500 to a CESA in 2017.What is the maximum CESA contribution Hyman can make for Danielle in 2017?

Tax-deferred plans are only available for purposes of saving for retirement.

A pension or profit-sharing plan must not discriminate in favor of highly compensated employees.What employees meet the definition of "highly compensated" for purposes of these plans?

Brianne is single,age 46,and reported AGI of $125,000 in tax year 2017.She is an active participant in her employer's pension plan.What is the maximum Roth IRA contributions he can make in 2017?

Individuals age 50 or older can make greater annual contributions to an IRA.

An annuity is a series of payments made pursuant to a contract.

Which of the following statements is incorrect?

Which of the following statements regarding a Coverdell Education Savings Account (CESA)is correct?

Which of the following statements is incorrect?

Defined-contribution plans establish the amount of retirement benefits an employee will receive in retirement.

Pension plans must meet complex rules to retain their tax-advantaged status.These rules include all of the following except:

Which of the following statements is incorrect?

Pierre retired in 2017 at age 62.During the year he received distributions of $27,000 from his IRA.He made nondeductible contributions of $60,000 to the IRA in prior years and has never received a nontaxable distribution.As of December 31,2017,the value of his IRA was $450,000.Calculate the taxable portion of Pierre's distribution.

Which of the following statements is incorrect?