Question 1

Which of the following is not an employer-sponsored retirement plan?

Accepted Answer

A)  Roth IRA. 
B)  SIMPLE. 
C)  401(k). 
D) Qualified pension plan. 
A)  Roth IRA. 
B)  SIMPLE. 
C)  401(k). 
D) Qualified pension plan.

Question 2

Which of the following statements is incorrect?

Accepted Answer

A)  Tax-deferred plans have an accumulation period and a distribution period. 
B)  Normally, if a retirement plan is funded with dollars that have already been taxed, the distributions will be taxed. 
C)  During the accumulation period of a qualified retirement plan no taxes are due on the earnings from the plan investments. 
D) Contributions to retirement plans are often limited in amount. 
A)  Tax-deferred plans have an accumulation period and a distribution period. 
B)  Normally, if a retirement plan is funded with dollars that have already been taxed, the distributions will be taxed. 
C)  During the accumulation period of a qualified retirement plan no taxes are due on the earnings from the plan investments. 
D) Contributions to retirement plans are often limited in amount.

Question 3

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

Question 4

Retirement accounts include traditional IRAs, Roth IRAs, Keoghs, and Coverdell Education Savings Accounts.

Accepted Answer

A) True 
 B)False

Question 5

To calculate the taxable portion of an annuity payment, a taxpayer must determine all of the following except:

Accepted Answer

A)  The cost of the annuity contract. 
B)  The year in which annuity payments were first received. 
C)  The expected return from the contract. 
D) The amount and frequency of occurrence of the stream of annuity payments. 
A)  The cost of the annuity contract. 
B)  The year in which annuity payments were first received. 
C)  The expected return from the contract. 
D) The amount and frequency of occurrence of the stream of annuity payments.

Question 6

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

Accepted Answer

A) True 
 B)False

Question 7

In 2015, a 52-year-old participant in a 401(k) plan may contribute a maximum of:

Accepted Answer

A)  $6,000. 
B)  $18,000. 
C)  $24,000. 
D) $53,000. 
A)  $6,000. 
B)  $18,000. 
C)  $24,000. 
D) $53,000.

Question 8

Roth IRA withdrawals are deemed to first come from contributions followed by earnings.

Accepted Answer

A) True 
 B)False

Question 9

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 51, who is an active participant in an employer-sponsored retirement plan with AGI of $37,000.
b. A single person, age 59, who is an active participant in an employer-sponsored retirement plan with AGI of $67,000.
c. A single person, age 26, who is an active participant in an employer-sponsored retirement plan with AGI of $63,000.

Accepted Answer

a. $6,500

Question 10

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

Accepted Answer

A) True 
 B)False

Question 11

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

Accepted Answer

A) True 
 B)False

Question 12

In the case of defined-contribution plans, in 2015 what are the maximum contribution limits by an employee under the age of 50 to a qualified pension plan, a 401(k) plan, a Keogh plan, SEP, and SIMPLE plan?

Accepted Answer

• Qualified pension plan = the lesser of

Question 13

Heather, age 67, retired in 2015. 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, 2015, 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 2016.

Accepted Answer

The nontaxable portion of Heather's dist

Question 14

Employers with 200 or fewer employees who do not have a qualified pension or profit-sharing plan can establish a SIMPLE retirement plan for their employees.

Accepted Answer

A) True 
 B)False

Question 15

Which of the following statements is incorrect?

Accepted Answer

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

Question 16

A stream of payments can be called an annuity.

Accepted Answer

A) True 
 B)False

Question 17

Patrick is age 30, single, and has AGI of $101,000. He would like to contribute to a Coverdell Education Savings Account (CESA) for his niece, Eileen. What is the maximum CESA contribution Patrick can make for Eileen in 2015?

Accepted Answer

A)  $0. 
B)  $1,200. 
C)  $1,500. 
D) $2,000. 
A)  $0. 
B)  $1,200. 
C)  $1,500. 
D) $2,000.

Question 18

Godfrey is age 77. He paid $240,000 for a single life annuity contract that will pay him $28,800 per year for life. The taxable amount of the first $28,800 payment is

Accepted Answer

A)  $7,371. 
B)  $8,965. 
C)  $17,479. 
D) $21,429. 
A)  $7,371. 
B)  $8,965. 
C)  $17,479. 
D) $21,429.

Question 19

Which of the following is true regarding an SEP?

Accepted Answer

A)  Cannot discriminate in favor of highly compensated employees. 
B)  Deductible contributions cannot exceed the lower of 15% of the employee's compensation or $53,000. 
C)  Self-employed individuals cannot create and contribute to an SEP. 
D) 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. 
A)  Cannot discriminate in favor of highly compensated employees. 
B)  Deductible contributions cannot exceed the lower of 15% of the employee's compensation or $53,000. 
C)  Self-employed individuals cannot create and contribute to an SEP. 
D) 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.

Question 20

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

Which of the following is not an employer-sponsored retirement plan?

Which of the following statements is incorrect?

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

Retirement accounts include traditional IRAs, Roth IRAs, Keoghs, and Coverdell Education Savings Accounts.

To calculate the taxable portion of an annuity payment, a taxpayer must determine all of the following except:

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

In 2015, a 52-year-old participant in a 401(k) plan may contribute a maximum of:

Roth IRA withdrawals are deemed to first come from contributions followed by earnings.

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

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

In the case of defined-contribution plans, in 2015 what are the maximum contribution limits by an employee under the age of 50 to a qualified pension plan, a 401(k) plan, a Keogh plan, SEP, and SIMPLE plan?

Employers with 200 or fewer employees who do not have a qualified pension or profit-sharing plan can establish a SIMPLE retirement plan for their employees.

Which of the following statements is incorrect?

A stream of payments can be called an annuity.

Patrick is age 30, single, and has AGI of $101,000. He would like to contribute to a Coverdell Education Savings Account (CESA) for his niece, Eileen. What is the maximum CESA contribution Patrick can make for Eileen in 2015?

Godfrey is age 77. He paid $240,000 for a single life annuity contract that will pay him $28,800 per year for life. The taxable amount of the first $28,800 payment is

Which of the following is true regarding an SEP?

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

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

Capital Gains and Other Sales of Property

Rental Property, Royalties, Income From Flow-Through Entities

Tax Credits

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 is not an employer-sponsored retirement plan?

Which of the following statements is incorrect?

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

Retirement accounts include traditional IRAs, Roth IRAs, Keoghs, and Coverdell Education Savings Accounts.

To calculate the taxable portion of an annuity payment, a taxpayer must determine all of the following except:

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

In 2015, a 52-year-old participant in a 401(k) plan may contribute a maximum of:

Roth IRA withdrawals are deemed to first come from contributions followed by earnings.

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

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

In the case of defined-contribution plans, in 2015 what are the maximum contribution limits by an employee under the age of 50 to a qualified pension plan, a 401(k) plan, a Keogh plan, SEP, and SIMPLE plan?

Employers with 200 or fewer employees who do not have a qualified pension or profit-sharing plan can establish a SIMPLE retirement plan for their employees.

Which of the following statements is incorrect?

A stream of payments can be called an annuity.

Patrick is age 30, single, and has AGI of $101,000. He would like to contribute to a Coverdell Education Savings Account (CESA) for his niece, Eileen. What is the maximum CESA contribution Patrick can make for Eileen in 2015?

Godfrey is age 77. He paid $240,000 for a single life annuity contract that will pay him $28,800 per year for life. The taxable amount of the first $28,800 payment is

Which of the following is true regarding an SEP?

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

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

Capital Gains and Other Sales of Property

Rental Property, Royalties, Income From Flow-Through Entities

Tax Credits

Payroll Taxes

Special Property Transactions

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

Partnership Taxation

Corporate Taxation

Filters