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

Employers with 200 or fewer employees who do not have a qualified pension or profit-sharing plan can establish a SIMPLE retirement plan for their employees.

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 2016?

Individuals who make contributions to a Coverdell Education Savings Account must have AGI of $175,000 or less.

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?

To calculate the taxable portion of an annuity payment,a taxpayer must determine all of the following except:

Max retired in 2016 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 31,2016,the value of his IRA was $150,000.Calculate the taxable portion of Max's distribution.

Which of the following statements is incorrect?

Which of the following statements is incorrect?

Omar is single,age 46,and reported AGI of $124,000 in tax year 2016.He is an active participant in his employer's pension plan.What is the maximum Roth IRA contribution he can make in 2016?

DJ is age 27,single,and reported AGI of $69,000 in tax year 2016.He is an active participant in his employer's pension plan.What is the maximum deductible IRA contribution he can make in 2016?

Harriett is age 52,married,and reported AGI of $102,000 in tax year 2016.She is an active participant in her employer's pension plan.What is the maximum deductible IRA contribution she can make for her own account in 2016?

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

Regarding a full or partial rollover of assets from one retirement plan to another retirement plan:

Distributions from a qualified pension plan may be fully taxable,nontaxable,or a combination of both.

Retirement plans can be categorized into employer-sponsored plans and individual-based plans.What is the distinction? Give examples of plans in both categories.

Zena must start taking distributions from her traditional IRA beginning April 1,2016.At the end of 2014,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 1,2016?

For taxpayers under age 50,contributions can be made to a Roth IRA in an amount equal to the lower of $5,500 or 100% of compensation,plus the amount of contributions for the year to other IRAs.

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

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

Retirement accounts include traditional IRAs,Roth IRAs,Keoghs,and Coverdell Education Savings Accounts.