Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Distributions from a retirement plan are not subject to a 10% additional tax in each of the following instances except when:

Accepted Answer

A)  The distribution is made to pay an IRS tax levy on the plan. 
B)  The distribution is paid to an employee to be used to pay health insurance premiums. 
C)  The distribution is used to pay for medical expenses above the 10% AGI threshold. 
D)  The distribution is made to an employee or retiree on or after age 59½. 
A)  The distribution is made to pay an IRS tax levy on the plan. 
B)  The distribution is paid to an employee to be used to pay health insurance premiums. 
C)  The distribution is used to pay for medical expenses above the 10% AGI threshold. 
D)  The distribution is made to an employee or retiree on or after age 59½.

Question 3

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

Accepted Answer

A) True 
 B)False

Question 4

Mark is single and must start making distributions from his traditional IRA beginning April 1,2014.At the end of 2013 when Mark was 71 years old,the IRA had a balance of $110,000.What amount must Mark take as a distribution from the IRA by April 1,2014?

Accepted Answer

A)  $4,151. 
B)  $4,297. 
C)  $6,748. 
D)  $7,190. 
A)  $4,151. 
B)  $4,297. 
C)  $6,748. 
D)  $7,190.

Question 5

Which of the following statements is incorrect?

Accepted Answer

A)  Individual-based retirement plans include a Roth IRA. 
B)  Distributions from a pension plan may be made in a lump sum or may be spread out in payments over many years. 
C)  Tax-deferred plans can be created for purposes other than retirement. 
D)  If a pension plan is funded with contributions that have not been taxed,the distributions will not be taxed. 
A)  Individual-based retirement plans include a Roth IRA. 
B)  Distributions from a pension plan may be made in a lump sum or may be spread out in payments over many years. 
C)  Tax-deferred plans can be created for purposes other than retirement. 
D)  If a pension plan is funded with contributions that have not been taxed,the distributions will not be taxed.

Question 6

Which of the following statements is incorrect?

Accepted Answer

A)  Roth IRA distributions are never taxable. 
B)  Taxpayers can rollover plan assets from one plan to another tax-free if certain rules are followed. 
C)  If distributions from a Coverdell Education Savings Account are used for qualified education expenses,the distributions are tax-free. 
D)  For traditional IRA distributions,the date on which minimum payments must begin is April 1 of the calendar year following the year in which the taxpayer reaches age 70½. 
A)  Roth IRA distributions are never taxable. 
B)  Taxpayers can rollover plan assets from one plan to another tax-free if certain rules are followed. 
C)  If distributions from a Coverdell Education Savings Account are used for qualified education expenses,the distributions are tax-free. 
D)  For traditional IRA distributions,the date on which minimum payments must begin is April 1 of the calendar year following the year in which the taxpayer reaches age 70½.

Question 7

Regarding a Coverdell Education Savings Account:

Accepted Answer

A)  Distributions are tax-free to the beneficiary if they are used for his or her qualified education expenses. 
B)  Qualified education expenses include required tuition,fees,books,supplies,and equipment at an eligible educational institution. 
C)  Qualified expenses must be reduced by scholarships or other tax-free income. 
D)  All of these. 
A)  Distributions are tax-free to the beneficiary if they are used for his or her qualified education expenses. 
B)  Qualified education expenses include required tuition,fees,books,supplies,and equipment at an eligible educational institution. 
C)  Qualified expenses must be reduced by scholarships or other tax-free income. 
D)  All of these.

Question 8

What is an annuity contract? Who are the parties to an annuity contract?

Accepted Answer

An annuity contract is a serie

Question 9

At the end of 2012,Erin was 74 years old and her traditional IRA had a balance of $300,000.She properly withdrew $12,605 from her IRA in 2013,the first year she took a withdrawal.In 2013,her IRA assets earned $37,500.What amount must Erin take as a distribution from her IRA in 2014?

Accepted Answer

A)  $14,768. 
B)  $14,187. 
C)  $13,651. 
D)  Some other amount. 
A)  $14,768. 
B)  $14,187. 
C)  $13,651. 
D)  Some other amount.

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

Roth IRA withdrawals are deemed to first come from contributions followed by earnings.

Accepted Answer

A) True 
 B)False

Question 13

Max retired in 2014 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 31,2014,the value of his IRA was $250,000.Calculate the nontaxable portion of Max's distribution.

Accepted Answer

A)  $1,374. 
B)  $1,440. 
C)  $10,560. 
D)  $10,626. 
A)  $1,374. 
B)  $1,440. 
C)  $10,560. 
D)  $10,626.

Question 14

Godfrey is age 77.He paid $240,000 for a single life annuity contract that will pay him $28,800 per year for life.The taxable amount of the first $28,800 payment is

Accepted Answer

A)  $7,371. 
B)  $8,965. 
C)  $17,479. 
D)  $21,429. 
A)  $7,371. 
B)  $8,965. 
C)  $17,479. 
D)  $21,429.

Question 15

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 1,2014.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 2014 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.

Accepted Answer

a.Randy can exclude $504.76 ($106,000/21

Question 16

Carl is 60 years old.On January 1,2014,Carl purchased a single life annuity for $70,000.The annuity contract provides Carl with payments of $600 per month for the rest of his life.Payments under the contract began January 1,2014.How much of the annuity payments are included in income for 2014? (round the exclusion ratio to four decimal places)

Accepted Answer

The expected return from the contract is

Question 17

Len is entitled to receive monthly payments of $1,500 over his life from his employer's qualified pension plan.The payments begin January 1,2014.He contributed $71,500 to the plan prior to his retirement at age 62.Using the simplified method,how much of the payments will be included in Len's taxable income for 2014?

Accepted Answer

A)  $0. 
B)  $3,300. 
C)  $14,700. 
D)  $18,000. 
A)  $0. 
B)  $3,300. 
C)  $14,700. 
D)  $18,000.

Question 18

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 1,2014.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 2014 if he chooses to take $1,300 monthly over his life and the life of his wife?

Accepted Answer

A)  $1,300. 
B)  $3,300. 
C)  $12,300. 
D)  $15,600. 
A)  $1,300. 
B)  $3,300. 
C)  $12,300. 
D)  $15,600.

Question 19

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:

Accepted Answer

A)  $10,000. 
B)  $150,000. 
C)  $219,000. 
D)  $384,000. 
A)  $10,000. 
B)  $150,000. 
C)  $219,000. 
D)  $384,000.

Question 20

Paulette is age 32,single,and reported AGI of $66,000 in tax year 2014.She is an active participant in her employer's pension plan.What amount of deductible IRA contribution is disallowed in 2014?

Accepted Answer

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

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

Distributions from a retirement plan are not subject to a 10% additional tax in each of the following instances except when:

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

Mark is single and must start making distributions from his traditional IRA beginning April 1,2014.At the end of 2013 when Mark was 71 years old,the IRA had a balance of $110,000.What amount must Mark take as a distribution from the IRA by April 1,2014?

Which of the following statements is incorrect?

Which of the following statements is incorrect?

Regarding a Coverdell Education Savings Account:

What is an annuity contract? Who are the parties to an annuity contract?

At the end of 2012,Erin was 74 years old and her traditional IRA had a balance of $300,000.She properly withdrew $12,605 from her IRA in 2013,the first year she took a withdrawal.In 2013,her IRA assets earned $37,500.What amount must Erin take as a distribution from her IRA in 2014?

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

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

Roth IRA withdrawals are deemed to first come from contributions followed by earnings.

Godfrey is age 77.He paid $240,000 for a single life annuity contract that will pay him $28,800 per year for life.The taxable amount of the first $28,800 payment is

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:

Paulette is age 32,single,and reported AGI of $66,000 in tax year 2014.She is an active participant in her employer's pension plan.What amount of deductible IRA contribution is disallowed in 2014?

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

Capital Gains and Other Sales of Property

Rental Property, Royalties, and Income From Flow-Through Entities

Tax Credits

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

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

Distributions from a retirement plan are not subject to a 10% additional tax in each of the following instances except when:

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

Mark is single and must start making distributions from his traditional IRA beginning April 1,2014.At the end of 2013 when Mark was 71 years old,the IRA had a balance of $110,000.What amount must Mark take as a distribution from the IRA by April 1,2014?

Which of the following statements is incorrect?

Which of the following statements is incorrect?

Regarding a Coverdell Education Savings Account:

What is an annuity contract? Who are the parties to an annuity contract?

At the end of 2012,Erin was 74 years old and her traditional IRA had a balance of $300,000.She properly withdrew $12,605 from her IRA in 2013,the first year she took a withdrawal.In 2013,her IRA assets earned $37,500.What amount must Erin take as a distribution from her IRA in 2014?

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

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

Roth IRA withdrawals are deemed to first come from contributions followed by earnings.

Godfrey is age 77.He paid $240,000 for a single life annuity contract that will pay him $28,800 per year for life.The taxable amount of the first $28,800 payment is

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:

Paulette is age 32,single,and reported AGI of $66,000 in tax year 2014.She is an active participant in her employer's pension plan.What amount of deductible IRA contribution is disallowed in 2014?

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

Capital Gains and Other Sales of Property

Rental Property, Royalties, and Income From Flow-Through Entities

Tax Credits

Payroll Taxes

Special Property Transactions

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

Partnership Taxation

Corporate Taxation

Filters