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

Hyman is age 34, single, and has AGI of $130,000. He would like to contribute to a Coverdell Education Savings Account (CESA) for his niece, Danielle. Danielle's father has already contributed $500 to a CESA in 2015. What is the maximum CESA contribution Hyman can make for Danielle in 2015?

Habiba is age 74 and married. Her husband is age 73. She purchased a single life annuity contract that will pay her $20,000 per year for life. The expected return on the contract is

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

Which of the following statements is incorrect?

Charlotte is age 52, married, and reported AGI of $102,000 in tax year 2015. She is an active participant in her employer's pension plan. What is the disallowed portion of her deductible IRA contribution in 2015?

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.

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

For 2015, the maximum annual contribution to a Simplified Employee Pension (SEP) plan for an employee under the age of 50 is:

Pierre retired in 2015 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, 2015, the value of his IRA was $450,000. Calculate the taxable portion of Pierre's distribution.

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

Shauntae is 75 years old. He purchased a single life annuity contract that will pay him $3,000 per month for 10 years. The expected return under the contract is:

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

If the proceeds of a pension plan are being distributed and the original beneficiary dies:

All of the following are employer-sponsored plans except:

Contributions to a Coverdell Education Savings Account are not subject to AGI phaseout rules.

What are some of the significant tax benefits for both employees and employers associated with a qualified pension plan?

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?

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:

Gwen is age 51, married, and reported AGI of $101,000 in tax year 2015. She is an active participant in her employer's pension plan. What amount of deductible IRA contribution is disallowed in 2015?

Pension plans must meet complex rules to retain their tax-advantaged status. These rules include all of the following except: