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

Max retired in 2015 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, 2015, the value of his IRA was $250,000. Calculate the nontaxable portion of Max's distribution.

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?

SIMPLE plans are not subject to the nondiscrimination rules for other qualified plans.

Annually, up to $2,000 per beneficiary can be contributed to a Coverdell Education Savings Account.

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

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

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

Distributions from a traditional IRA:

Maurice is age 44, single, and reported AGI of $69,000 in tax year 2015. He is an active participant in his employer's pension plan. What is the maximum deductible IRA contribution he can make in 2015?

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

Escobar and Rose are both age 36 and file a joint return. Neither is covered under an employer plan. Escobar earned $121,000 of compensation in 2015. Rose worked part-time and earned $1,200. What is the maximum deductible IRA contribution they can make in 2015?

Which of the following statements is correct?

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.

Which of the following statements is incorrect?

If an individual (or spouse) is an active participant in an employer-sponsored retirement plan, he or she cannot make a deductible IRA contribution.

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

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

Which of the following statements is incorrect?

Harriett 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 maximum deductible IRA contribution she can make for her own account in 2015?

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 2015?