Question 1

Nonqualified deferred compensation plans are prohibited from discriminating in favor of highly compensated employees.

Accepted Answer

A) True 
 B)False

Question 2

Keogh plans allow self-employed individuals to save for retirement on a tax-deferred basis.

Accepted Answer

A) True 
 B)False

Question 3

Any individual taxpayer who earns any amount of compensation or self-employment income can contribute $5,500 to a traditional IRA.

Accepted Answer

A) True 
 B)False

Question 4

Six years ago,Linus Corporation granted Pauline a nonqualified option to purchase 5,000 shares of Linus stock for $13 per share.On date of grant,the market price was $11 per share.Last year,Pauline exercised the option when the market price was $47 per share.This year,she sold the stock for $40 per share.Compute Pauline's gain or loss recognized on sale.

Accepted Answer

A) $135,000 gain 
B) $10,000 loss 
C) $35,000 loss 
D) No gain or loss on sale 
A) $135,000 gain 
B) $10,000 loss 
C) $35,000 loss 
D) No gain or loss on sale

Question 5

Six years ago,HOPCO granted Ms.Cardena a nonqualified option to purchase 1,000 shares of HOPCO stock at $12 per share.On date of grant,the market price was $10 per share.This year,Ms.Cardena exercised the option when the market price was $33 per share.Compute HOPCO's deduction resulting from the exercise.

Accepted Answer

A) $0 
B) $12,000 
C) $23,000 
D) None of the above. 
A) $0 
B) $12,000 
C) $23,000 
D) None of the above.

Question 6

Lansing Corporation,a publicly held company with a 35% marginal tax rate,paid its CEO an annual salary of $2.3 million.Ignoring payroll taxes,calculate the after-tax cost of this payment.

Accepted Answer

A) $2.3 million 
B) $1.495 million 
C) $1.95 million 
D) $0 
A) $2.3 million 
B) $1.495 million 
C) $1.95 million 
D) $0

Question 7

Which of the following statements regarding fringe benefits is false?

Accepted Answer

A) The general rule is that an employee fringe benefit is taxable unless the benefit is specifically excluded from the employee's gross income. 
B) Employers are not allowed to deduct the cost of nontaxable employee fringe benefits. 
C) Nontaxable fringe benefits must be provided to employees on a nondiscriminatory basis. 
D) None of the above is false. 
A) The general rule is that an employee fringe benefit is taxable unless the benefit is specifically excluded from the employee's gross income. 
B) Employers are not allowed to deduct the cost of nontaxable employee fringe benefits. 
C) Nontaxable fringe benefits must be provided to employees on a nondiscriminatory basis. 
D) None of the above is false.

Nonqualified deferred compensation plans are prohibited from discriminating in favor of highly compensated employees.

Keogh plans allow self-employed individuals to save for retirement on a tax-deferred basis.

Any individual taxpayer who earns any amount of compensation or self-employment income can contribute $5,500 to a traditional IRA.

Lansing Corporation,a publicly held company with a 35% marginal tax rate,paid its CEO an annual salary of $2.3 million.Ignoring payroll taxes,calculate the after-tax cost of this payment.

Which of the following statements regarding fringe benefits is false?

Taxes and Taxing Jurisdictions

Policy Standards for a Good Tax

Taxes As Transaction Costs

Maxims of Income Tax Planning

Tax Research

Taxable Income From Business Operations

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Nontaxable Exchanges

Sole Proprietorships, Partnerships, llcs, and S Corporations

The Corporate Taxpayer

The Choice of Business Entity

Jurisdictional Issues in Business Taxation

The Individual Tax Formula

Investment and Personal Financial Planning

Tax Consequences of Personal Activities

The Tax Compliance Process

Filters

Exam 15: Compensation and Retirement Planning

Nonqualified deferred compensation plans are prohibited from discriminating in favor of highly compensated employees.

Keogh plans allow self-employed individuals to save for retirement on a tax-deferred basis.

Any individual taxpayer who earns any amount of compensation or self-employment income can contribute $5,500 to a traditional IRA.

Lansing Corporation,a publicly held company with a 35% marginal tax rate,paid its CEO an annual salary of $2.3 million.Ignoring payroll taxes,calculate the after-tax cost of this payment.

Which of the following statements regarding fringe benefits is false?

Taxes and Taxing Jurisdictions

Policy Standards for a Good Tax

Taxes As Transaction Costs

Maxims of Income Tax Planning

Tax Research

Taxable Income From Business Operations

Property Acquisitions and Cost Recovery Deductions

Property Dispositions

Nontaxable Exchanges

Sole Proprietorships, Partnerships, llcs, and S Corporations

The Corporate Taxpayer

The Choice of Business Entity

Jurisdictional Issues in Business Taxation

The Individual Tax Formula

Investment and Personal Financial Planning

Tax Consequences of Personal Activities

The Tax Compliance Process

Filters