Question 1

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

Accepted Answer

A) True 
 B)False

Question 2

Distributions from a Coverdell Education Savings Account are tax-free to the beneficiary if they are used for his or her qualified education expenses.

Accepted Answer

A) True 
 B)False

Question 3

Pension plan distributions are reported to taxpayers on a Form 1099-P.

Accepted Answer

A) True 
 B)False

Question 4

Damian is age 77.He purchased a single life annuity contract that will pay him $6,000 per month for life.The expected return on the contract is:

Accepted Answer

A) $67,200. 
B) $806,400. 
C) $1,526,400. 
D) $871,200. 
A) $67,200. 
B) $806,400. 
C) $1,526,400. 
D) $871,200.

Question 5

Annual contributions to a Keogh plan cannot exceed the greater of $53,000 or 100% of compensation.

Accepted Answer

A) True 
 B)False

Question 6

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

Accepted Answer

A) In order to be tax-free,distributions must be used exclusively to pay the qualified education expenses of the beneficiary. 
B) A person can contribute to only one CESA during each tax year. 
C) Contributions to a CESA are not tax-deductible. 
D) Any person can contribute to a CESA,even if he or she is not related to the beneficiary. 
A) In order to be tax-free,distributions must be used exclusively to pay the qualified education expenses of the beneficiary. 
B) A person can contribute to only one CESA during each tax year. 
C) Contributions to a CESA are not tax-deductible. 
D) Any person can contribute to a CESA,even if he or she is not related to the beneficiary.

Question 7

SIMPLE and SEP plans are subject to the same nondiscrimination rules that apply to other retirement plans.

Accepted Answer

A) True 
 B)False

Question 8

Venkat is age 32,single,and reported AGI of $67,000 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?

Accepted Answer

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

Question 9

For 2016,the maximum annual contribution to a Simplified Employee Pension SEP)plan for an employee under the age of 50 is:

Accepted Answer

A) $5,500 
B) $12,500 
C) $53,000 
D) $18,000 
A) $5,500 
B) $12,500 
C) $53,000 
D) $18,000

Question 10

Damian is age 77.He paid $600,000 for a single life annuity contract that will pay him $72,000 per year for life.The tax-free amount of the first $72,000 payment is

Accepted Answer

A) $18,429. 
B) $53,571. 
C) $28,302. 
D) $49,587. 
A) $18,429. 
B) $53,571. 
C) $28,302. 
D) $49,587.

Question 11

Quentin and Janelle would like to establish a Coverdell Education Savings Account CESA)for their daughter,age 5,and their nephew the son of Quentin's brother),age 8.Their AGI is $145,000.Quentin's brother has already contributed $1,500 to a CESA for his son.
a.What is the maximum amount Quentin and Janelle can contribute to a CESA for their daughter and their nephew?
b.If their AGI were $208,000,what is the maximum amount they can contribute to a CESA for their daughter and their nephew?

Accepted Answer

a.Quentin and Janelle can contribute $2,

Question 12

Which of the following is true regarding an SEP?

Accepted Answer

A) Cannot discriminate in favor of highly compensated employees. 
B) The plan must cover all employees who have reached the age of 18,who have worked for the employer for at least two of the preceding five years,and who received at least $600 in compensation. 
C) Deductible contributions cannot exceed the lower of 15% of the employee's compensation or $53,000. 
D) Self-employed individuals cannot create and contribute to an SEP. 
A) Cannot discriminate in favor of highly compensated employees. 
B) The plan must cover all employees who have reached the age of 18,who have worked for the employer for at least two of the preceding five years,and who received at least $600 in compensation. 
C) Deductible contributions cannot exceed the lower of 15% of the employee's compensation or $53,000. 
D) Self-employed individuals cannot create and contribute to an SEP.

Question 13

Which of the following statements is incorrect?

Accepted Answer

A) Annuity payments may be for a specified period of time or for the life of the contract holder. 
B) An annuity is a series of payments under a contract. 
C) Annuity payments are fixed in amount. 
D) The proportional amount of an annuity payment that is attributable to the cost of the contract is tax-free. 
A) Annuity payments may be for a specified period of time or for the life of the contract holder. 
B) An annuity is a series of payments under a contract. 
C) Annuity payments are fixed in amount. 
D) The proportional amount of an annuity payment that is attributable to the cost of the contract is tax-free.

Question 14

If a taxpayer pays for an annuity contract with after-tax dollars,all payments received under the contract will be tax-free until the original cost is recovered.

Accepted Answer

A) True 
 B)False

Question 15

At the end of 2014,Erin was 74 years old and her traditional IRA had a balance of $300,000.She properly withdrew $12,605 from her IRA in 2015,which was the first year she took a withdrawal.In 2015,her IRA assets earned $37,500.What amount must Erin take as a distribution from her IRA in 2016?

Accepted Answer

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

Question 16

The proportion of an annuity payment from a qualified pension plan that is determined to have come from employee contributions is taxed at ordinary income rates.

Accepted Answer

A) True 
 B)False

Question 17

A participant has an adjusted basis of zero in any nondeductible contributions to a traditional IRA.

Accepted Answer

A) True 
 B)False

Question 18

Max retired in 2016 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 31,2016,the value of his IRA was $250,000.Calculate the nontaxable portion of Max's distribution.

Accepted Answer

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

Question 19

What is the maximum deductible contribution that can be made to one or more deductible IRAs in each of the following instances?
a.A single person,age 41,who is not an active participant in an employer-sponsored retirement plan with AGI of $97,000.
b.A married couple,ages 33 and 34,neither of whom is an active participant in an
employer-sponsored retirement plan.One spouse has W-2 income of $57,000 and the other spouse did not work.
c.A married couple,ages 44 and 48.One spouse is covered under an employer-sponsored retirement plan and the other is not.The covered spouse has W-2 income of $125,000 and the non-covered spouse has W-2 income of $32,000.

Accepted Answer

a.$5,500. b.$11,000. c.$5,500 for the no

Question 20

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

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

Distributions from a Coverdell Education Savings Account are tax-free to the beneficiary if they are used for his or her qualified education expenses.

Pension plan distributions are reported to taxpayers on a Form 1099-P.

Damian is age 77.He purchased a single life annuity contract that will pay him $6,000 per month for life.The expected return on the contract is:

Annual contributions to a Keogh plan cannot exceed the greater of $53,000 or 100% of compensation.

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

SIMPLE and SEP plans are subject to the same nondiscrimination rules that apply to other retirement plans.

Venkat is age 32,single,and reported AGI of $67,000 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?

For 2016,the maximum annual contribution to a Simplified Employee Pension SEP)plan for an employee under the age of 50 is:

Damian is age 77.He paid $600,000 for a single life annuity contract that will pay him $72,000 per year for life.The tax-free amount of the first $72,000 payment is

Which of the following is true regarding an SEP?

Which of the following statements is incorrect?

If a taxpayer pays for an annuity contract with after-tax dollars,all payments received under the contract will be tax-free until the original cost is recovered.

At the end of 2014,Erin was 74 years old and her traditional IRA had a balance of $300,000.She properly withdrew $12,605 from her IRA in 2015,which was the first year she took a withdrawal.In 2015,her IRA assets earned $37,500.What amount must Erin take as a distribution from her IRA in 2016?

The proportion of an annuity payment from a qualified pension plan that is determined to have come from employee contributions is taxed at ordinary income rates.

A participant has an adjusted basis of zero in any nondeductible contributions to a traditional IRA.

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

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

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

Distributions from a Coverdell Education Savings Account are tax-free to the beneficiary if they are used for his or her qualified education expenses.

Pension plan distributions are reported to taxpayers on a Form 1099-P.

Damian is age 77.He purchased a single life annuity contract that will pay him $6,000 per month for life.The expected return on the contract is:

Annual contributions to a Keogh plan cannot exceed the greater of $53,000 or 100% of compensation.

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

SIMPLE and SEP plans are subject to the same nondiscrimination rules that apply to other retirement plans.

Venkat is age 32,single,and reported AGI of $67,000 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?

For 2016,the maximum annual contribution to a Simplified Employee Pension SEP)plan for an employee under the age of 50 is:

Damian is age 77.He paid $600,000 for a single life annuity contract that will pay him $72,000 per year for life.The tax-free amount of the first $72,000 payment is

Which of the following is true regarding an SEP?

Which of the following statements is incorrect?

If a taxpayer pays for an annuity contract with after-tax dollars,all payments received under the contract will be tax-free until the original cost is recovered.

At the end of 2014,Erin was 74 years old and her traditional IRA had a balance of $300,000.She properly withdrew $12,605 from her IRA in 2015,which was the first year she took a withdrawal.In 2015,her IRA assets earned $37,500.What amount must Erin take as a distribution from her IRA in 2016?

The proportion of an annuity payment from a qualified pension plan that is determined to have come from employee contributions is taxed at ordinary income rates.

A participant has an adjusted basis of zero in any nondeductible contributions to a traditional IRA.

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

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