Question 1

Which of the following statements is incorrect?

Accepted Answer

A) Tax-deferred plans can be created for purposes other than retirement. 
B) Retirement plans are always funded with contributions that have not been taxed,so the withdrawals are taxed. 
C) A SIMPLE plan is an employer-sponsored retirement plan. 
D) A payment to a beneficiary from a pension plan is called a distribution. 
A) Tax-deferred plans can be created for purposes other than retirement. 
B) Retirement plans are always funded with contributions that have not been taxed,so the withdrawals are taxed. 
C) A SIMPLE plan is an employer-sponsored retirement plan. 
D) A payment to a beneficiary from a pension plan is called a distribution.

Question 2

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

Accepted Answer

A) A contributor cannot make a contribution for himself/herself. 
B) Annual contributions are limited to $2,000 per beneficiary,per contributor. 
C) For single taxpayers,permitted contributions begin to be phased out when AGI reaches $90,000. 
D) An individual can be the beneficiary of multiple CESAs. 
A) A contributor cannot make a contribution for himself/herself. 
B) Annual contributions are limited to $2,000 per beneficiary,per contributor. 
C) For single taxpayers,permitted contributions begin to be phased out when AGI reaches $90,000. 
D) An individual can be the beneficiary of multiple CESAs.

Question 3

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:

Accepted Answer

A) $936,000. 
B) $518,400. 
C) $480,000. 
D) $40,000. 
A) $936,000. 
B) $518,400. 
C) $480,000. 
D) $40,000.

Question 4

All of the following are employer-sponsored plans except:

Accepted Answer

A) 403b. 
B) Qualified profit-sharing plan. 
C) Coverdell Education Savings Account. 
D) Keogh plan. 
A) 403b. 
B) Qualified profit-sharing plan. 
C) Coverdell Education Savings Account. 
D) Keogh plan.

Question 5

Which of the following statements is incorrect?

Accepted Answer

A) If a pension plan is funded with contributions that have not been taxed,the distributions will not be taxed. 
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) Individual-based retirement plans include a Roth IRA. 
A) If a pension plan is funded with contributions that have not been taxed,the distributions will not be taxed. 
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) Individual-based retirement plans include a Roth IRA.

Question 6

Employees age 50 or over can contribute an additional ________ per year to a 401k)plan.

Accepted Answer

A) $6,000 
B) $18,000 
C) $1,000 
D) $6,500 
A) $6,000 
B) $18,000 
C) $1,000 
D) $6,500

Question 7

Distributions from a traditional IRA:

Accepted Answer

A) Are always nontaxable. 
B) Are always fully taxable. 
C) Are fully taxable if the IRA was entirely funded with deductible contributions. 
D) Are fully taxable if the IRA was entirely funded with nondeductible contributions. 
A) Are always nontaxable. 
B) Are always fully taxable. 
C) Are fully taxable if the IRA was entirely funded with deductible contributions. 
D) Are fully taxable if the IRA was entirely funded with nondeductible contributions.

Question 8

Pierre retired in 2016 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 31,2016,the value of his IRA was $450,000.Calculate the taxable portion of Pierre's distribution.

Accepted Answer

A) $23,400. 
B) $3,396. 
C) $23,604. 
D) $3,600. 
A) $23,400. 
B) $3,396. 
C) $23,604. 
D) $3,600.

Question 9

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?

Accepted Answer

Highly compensated employees are those w

Question 10

Hamden is entitled to receive monthly payments of $6,000 over his life from his employer's qualified pension plan.The payments begin January 1,2016.He contributed $286,000 to the plan prior to his retirement at age 62.Using the simplified method,what amount of the payments will be excluded from Hamden's taxable income for 2016?

Accepted Answer

A) $13,200. 
B) $0. 
C) $58,800. 
D) $72,000. 
A) $13,200. 
B) $0. 
C) $58,800. 
D) $72,000.

Question 11

At the end of 2014,Erin was 73 years old and her traditional IRA had a balance of $200,000.She properly withdrew $8,403 from her IRA in 2015.In 2015,her IRA assets earned $25,000.What amount must Erin take as a distribution from her IRA in 2016?

Accepted Answer

A) $9,825. 
B) $9,458. 
C) $8,733. 
D) Some other amount. 
A) $9,825. 
B) $9,458. 
C) $8,733. 
D) Some other amount.

Question 12

If only one spouse is employed,and that spouse is not covered under an employer-sponsored retirement plan,then the non-working spouse can make a deductible contribution to his or her own IRA.

Accepted Answer

A) True 
 B)False

Question 13

Carl is 60 years old.On January 1,2016,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 1,2016.How much of the annuity payments are included in income for 2016? Round the exclusion ratio to four decimal places.)

Accepted Answer

The expected return from the contract is

Question 14

A stream of payments can be called an annuity.

Accepted Answer

A) True 
 B)False

Question 15

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

Accepted Answer

A) True 
 B)False

Question 16

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

Accepted Answer

A) True 
 B)False

Question 17

What is a good rule of thumb you should use when thinking about the taxability of retirement plan distributions?

Accepted Answer

A good rule of thumb is: if the plan is

Question 18

Heather,age 67,retired in 2016.During the year she received distributions of $14,000 from her IRA.She made nondeductible contributions of $40,000 to the IRA in prior years and has never received a nontaxable distribution.As of December 31,2016,the value of her IRA was $250,000.Calculate the taxable portion of Heather's distribution and her tax basis in the IRA after the distribution that she will carry forward to 2017.

Accepted Answer

The nontaxable portion of Heather's dist

Question 19

A distribution from a retirement plan is conceptually similar to a withdrawal from a savings account.

Accepted Answer

A) True 
 B)False

Question 20

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

Which of the following statements is incorrect?

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

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:

All of the following are employer-sponsored plans except:

Which of the following statements is incorrect?

Employees age 50 or over can contribute an additional ________ per year to a 401k)plan.

Distributions from a traditional IRA:

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?

At the end of 2014,Erin was 73 years old and her traditional IRA had a balance of $200,000.She properly withdrew $8,403 from her IRA in 2015.In 2015,her IRA assets earned $25,000.What amount must Erin take as a distribution from her IRA in 2016?

If only one spouse is employed,and that spouse is not covered under an employer-sponsored retirement plan,then the non-working spouse can make a deductible contribution to his or her own IRA.

A stream of payments can be called an annuity.

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

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

What is a good rule of thumb you should use when thinking about the taxability of retirement plan distributions?

A distribution from a retirement plan is conceptually similar to a withdrawal from a savings account.

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

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 Line 12 of Form 1040 and Schedule C

Capital Gains and Other Sales of Property Schedule D and Form 4797

Rental Property, royalties, and Income From Flow-Through Entities Line 17, form 1040, and Schedule E

Tax Credits Form 1040, lines 46 Through 54 and Lines 66a Through 73

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

Which of the following statements is incorrect?

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

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:

All of the following are employer-sponsored plans except:

Which of the following statements is incorrect?

Employees age 50 or over can contribute an additional ________ per year to a 401k)plan.

Distributions from a traditional IRA:

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?

At the end of 2014,Erin was 73 years old and her traditional IRA had a balance of $200,000.She properly withdrew $8,403 from her IRA in 2015.In 2015,her IRA assets earned $25,000.What amount must Erin take as a distribution from her IRA in 2016?

If only one spouse is employed,and that spouse is not covered under an employer-sponsored retirement plan,then the non-working spouse can make a deductible contribution to his or her own IRA.

A stream of payments can be called an annuity.

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

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

What is a good rule of thumb you should use when thinking about the taxability of retirement plan distributions?

A distribution from a retirement plan is conceptually similar to a withdrawal from a savings account.

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

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 Line 12 of Form 1040 and Schedule C

Capital Gains and Other Sales of Property Schedule D and Form 4797

Rental Property, royalties, and Income From Flow-Through Entities Line 17, form 1040, and Schedule E

Tax Credits Form 1040, lines 46 Through 54 and Lines 66a Through 73

Payroll Taxes

Special Property Transactions

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

Partnership Taxation

Corporate Taxation

Filters