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

DJ is age 27, 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?

Individuals age 50 or older can make greater annual contributions to an IRA.

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

Carl is 60 years old. On January 1, 2015, 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, 2015. How much of the annuity payments are included in income for 2015? (Round the exclusion ratio to four decimal places.)

Kaysia participates in a SIMPLE plan provided by her employer. In 2015, she contributes 6% of her $40,000 salary, and her employer contributes 3% to the plan. What amount of the contributions will be vested in her account at the end of 2015?

Which of the following statements is incorrect?

Contributions to a Coverdell Education Savings Account can only be made by the parents or grandparents of a child under the age of 18.

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

Randy is entitled to receive monthly payments of $2,500 over his life from his employer's qualified pension plan or he can take $2,300 over his life and the life of his wife. The payments begin May 1, 2015. Randy contributed $106,000 to the plan prior to his retirement. Randy is 67 and his wife is 65. Using the simplified method, how much of the payments will be included in Randy's income for 2015 in each of the following independent situations? a. Randy chooses to take payments of $2,500 over his life. b. Randy chooses to take payments of $2,300 over his life and the life of his wife.

Under a qualified profit-sharing plan, contributions must be made at least annually whether or not the employer has positive net income for the year.

Len is entitled to receive monthly payments of $1,500 over his life from his employer's qualified pension plan. The payments begin January 1, 2015. He contributed $71,500 to the plan prior to his retirement at age 62. Using the simplified method, how much of the payments will be included in Len's taxable income for 2015?

What are the tax consequence(s) related to a qualified pension plan?

Zena must start making distributions from her traditional IRA beginning April 1, 2015. At the end of 2013, 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, 2015?

Valerie and Marty are both age 51 and file a joint return. They have one child who is age 17. They have combined AGI in 2015 of $180,000. What is their maximum permitted contribution to a Coverdell Education Savings Account for 2015 assuming no other persons make contributions?

In 2015, a 48-year-old participant in a 401(k) plan may contribute a maximum of:

To calculate the taxable amount of an annuity payment, the taxpayer must determine the expected return under the contract.

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

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.

Puri is a self-employed Spanish teacher. Her earnings from self-employment before the Keogh deduction but after deducting half of the self-employment tax are $120,000. What is her maximum deductible Keogh contribution for 2015?

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