Question 1

Which of the following statements regarding self-employed retirement accounts is true?

Accepted Answer

A)  A self-employed taxpayer who has hired employees may set up either a SEP IRA or an individual 401(k). 
B)  A self-employed taxpayer who has hired employees may not set up a SEP IRA. 
C)  A self-employed taxpayer who has hired employees may not set up an individual 401(k). 
D)  All of the choices are false. 
A)  A self-employed taxpayer who has hired employees may set up either a SEP IRA or an individual 401(k). 
B)  A self-employed taxpayer who has hired employees may not set up a SEP IRA. 
C)  A self-employed taxpayer who has hired employees may not set up an individual 401(k). 
D)  All of the choices are false.

Question 2

Defined benefit plans specify the amount of benefit an employee will receive onretirement while defined contribution plans specify the amounts that employers and employees will (or can) contribute to an employee's plan.

Accepted Answer

A) True 
 B)False

Question 3

Which of the following is true concerning employer funding of nonqualified deferred compensation plans?

Accepted Answer

A)  Employers annually deduct the amount earned by employees under the plan. 
B)  Employers may discriminate in terms of who they allow to participate in the plan. 
C)  Employers are required to annually fund their deferred compensation obligations to employees. 
D)  Employers are required to invest salary deferred by employees in investments specified by the employees. 
A)  Employers annually deduct the amount earned by employees under the plan. 
B)  Employers may discriminate in terms of who they allow to participate in the plan. 
C)  Employers are required to annually fund their deferred compensation obligations to employees. 
D)  Employers are required to invest salary deferred by employees in investments specified by the employees.

Question 4

Shauna received a $100,000 distribution from her 401(k) account this year. Assuming Shauna's marginal tax rate is 25%, what is the total amount of tax and penalty Shauna will be required to pay if she receives the distribution on her 59th birthday and she has not yet retired?

Accepted Answer

A)  $0. 
B)  $10,000. 
C)  $35,000. 
D)  $25,000. 
E)  None of the choices are correct. 
A)  $0. 
B)  $10,000. 
C)  $35,000. 
D)  $25,000. 
E)  None of the choices are correct.

Question 5

Taxpayers withdrawing funds from an IRA before they turn 70½ are generally subject toa 10 percent penalty on the amount of the withdrawal.

Accepted Answer

A) True 
 B)False

Question 6

Both 401(k) plans and Roth 401(k) plans are forms of defined contribution plans.

Accepted Answer

A) True 
 B)False

Question 7

Which of the following statements regarding vesting in a defined benefit plan is correct?

Accepted Answer

A)  Under a graded vesting schedule, an employee's entire benefit vests all at the same time. 
B)  When an employee's benefits vest, she is legally entitled to receive the vested benefits. 
C)  When an employee's benefits vest, she is entitled to participate in the employer's defined benefit plan. 
D)  Under a cliff vesting schedule, a portion of an employee's benefits vest each year. 
A)  Under a graded vesting schedule, an employee's entire benefit vests all at the same time. 
B)  When an employee's benefits vest, she is legally entitled to receive the vested benefits. 
C)  When an employee's benefits vest, she is entitled to participate in the employer's defined benefit plan. 
D)  Under a cliff vesting schedule, a portion of an employee's benefits vest each year.

Question 8

Riley participates in his employer's 401(k) plan. He retired in 2017 at age 75. When mustRiley receive his distribution pertaining to 2017 to avoid minimum distribution penalties?

Accepted Answer

A)  April 1, 2018. 
B)  December 31, 2017. 
C)  April 1, 2017. 
D)  December 31, 2018. 
A)  April 1, 2018. 
B)  December 31, 2017. 
C)  April 1, 2017. 
D)  December 31, 2018.

Question 9

Jacob participates in his employer's defined benefit plan. He has worked for his employerfor four full years. If his employer uses a five-year cliff vesting schedule, Jacob will need to work another year in order to vest in any of his defined benefit plan retirementbenefits.

Accepted Answer

A) True 
 B)False

Question 10

Participating in an employer-sponsored nonqualified deferred compensation plan is potentially risky because employers are not required to fund nonqualified plans. If the employer is not able to pay the employee when the payment is due, the employee usually becomes an unsecured creditor of the employer.

Accepted Answer

A) True 
 B)False

Question 11

Retired taxpayers over 59½ years of age at the end of the year must receive minimum distributions from defined contribution plans or they are subject to a penalty.

Accepted Answer

A) True 
 B)False

Question 12

What would be her after-tax accumulation in 20 years if she contributes $5,000 to a traditional 401(k)account?

Accepted Answer

1) After-tax accumul

Question 13

Darren is eligible to contribute to a traditional 401(k) in 2017. He forgot to contribute before year-end. If he contributes before April 15, 2018, he is allowed to treat thecontribution as though he made it during 2017.

Accepted Answer

A) True 
 B)False

Question 14

Daniela retired at the age of 65. The current balance in her Roth IRA is $200,000.Daniela established the Roth IRA 10 years ago. Through a rollover and annualcontributions Daniela has contributed $80,000 to her account. If Daniela receives a$50,000 distribution from the Roth IRA, what amount of the distribution is taxable?

Accepted Answer

A)  $50,000. 
B)  $20,000. 
C)  $0. 
D)  $30,000. 
A)  $50,000. 
B)  $20,000. 
C)  $0. 
D)  $30,000.

Question 15

Riley participates in his employer's 401(k) plan. He turns 70 years of age on February 15,2016 and he plans on retiring on July 1, 2018. When must Riley receive his first distribution from the plan to avoid minimum distribution penalties?

Accepted Answer

A)  by April 1, 2016. 
B)  by April 1, 2019. 
C)  by April 1, 2017. 
D)  by April 1, 2018. 
A)  by April 1, 2016. 
B)  by April 1, 2019. 
C)  by April 1, 2017. 
D)  by April 1, 2018.

Which of the following statements regarding self-employed retirement accounts is true?

Defined benefit plans specify the amount of benefit an employee will receive onretirement while defined contribution plans specify the amounts that employers and employees will (or can) contribute to an employee's plan.

Which of the following is true concerning employer funding of nonqualified deferred compensation plans?

Shauna received a $100,000 distribution from her 401(k) account this year. Assuming Shauna's marginal tax rate is 25%, what is the total amount of tax and penalty Shauna will be required to pay if she receives the distribution on her 59th birthday and she has not yet retired?

Taxpayers withdrawing funds from an IRA before they turn 70½ are generally subject toa 10 percent penalty on the amount of the withdrawal.

Both 401(k) plans and Roth 401(k) plans are forms of defined contribution plans.

Which of the following statements regarding vesting in a defined benefit plan is correct?

Riley participates in his employer's 401(k) plan. He retired in 2017 at age 75. When mustRiley receive his distribution pertaining to 2017 to avoid minimum distribution penalties?

Jacob participates in his employer's defined benefit plan. He has worked for his employerfor four full years. If his employer uses a five-year cliff vesting schedule, Jacob will need to work another year in order to vest in any of his defined benefit plan retirementbenefits.

Retired taxpayers over 59½ years of age at the end of the year must receive minimum distributions from defined contribution plans or they are subject to a penalty.

What would be her after-tax accumulation in 20 years if she contributes $5,000 to a traditional 401(k)account?

Darren is eligible to contribute to a traditional 401(k) in 2017. He forgot to contribute before year-end. If he contributes before April 15, 2018, he is allowed to treat thecontribution as though he made it during 2017.

Riley participates in his employer's 401(k) plan. He turns 70 years of age on February 15,2016 and he plans on retiring on July 1, 2018. When must Riley receive his first distribution from the plan to avoid minimum distribution penalties?

An Introduction to Tax

Tax Compliance, the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Exemptions, and Filing Status

Gross Income and Exclusions

Individual Deductions

Investments

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The US Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters

Exam 13: Retirement Savings and Deferred Compensation

Which of the following statements regarding self-employed retirement accounts is true?

Defined benefit plans specify the amount of benefit an employee will receive onretirement while defined contribution plans specify the amounts that employers and employees will (or can) contribute to an employee's plan.

Which of the following is true concerning employer funding of nonqualified deferred compensation plans?

Shauna received a $100,000 distribution from her 401(k) account this year. Assuming Shauna's marginal tax rate is 25%, what is the total amount of tax and penalty Shauna will be required to pay if she receives the distribution on her 59th birthday and she has not yet retired?

Taxpayers withdrawing funds from an IRA before they turn 70½ are generally subject toa 10 percent penalty on the amount of the withdrawal.

Both 401(k) plans and Roth 401(k) plans are forms of defined contribution plans.

Which of the following statements regarding vesting in a defined benefit plan is correct?

Riley participates in his employer's 401(k) plan. He retired in 2017 at age 75. When mustRiley receive his distribution pertaining to 2017 to avoid minimum distribution penalties?

Jacob participates in his employer's defined benefit plan. He has worked for his employerfor four full years. If his employer uses a five-year cliff vesting schedule, Jacob will need to work another year in order to vest in any of his defined benefit plan retirementbenefits.

Retired taxpayers over 59½ years of age at the end of the year must receive minimum distributions from defined contribution plans or they are subject to a penalty.

What would be her after-tax accumulation in 20 years if she contributes $5,000 to a traditional 401(k)account?

Darren is eligible to contribute to a traditional 401(k) in 2017. He forgot to contribute before year-end. If he contributes before April 15, 2018, he is allowed to treat thecontribution as though he made it during 2017.

Riley participates in his employer's 401(k) plan. He turns 70 years of age on February 15,2016 and he plans on retiring on July 1, 2018. When must Riley receive his first distribution from the plan to avoid minimum distribution penalties?

An Introduction to Tax

Tax Compliance, the Irs, and Tax Authorities

Tax Planning Strategies and Related Limitations

Individual Income Tax Overview, Exemptions, and Filing Status

Gross Income and Exclusions

Individual Deductions

Investments

Individual Income Tax Computation and Tax Credits

Business Income, Deductions, and Accounting Methods

Property Acquisition and Cost Recovery

Property Dispositions

Compensation

Tax Consequences of Home Ownership

Entities Overview

Corporate Operations

Accounting for Income Taxes

Corporate Taxation: Nonliquidating Distributions

Corporate Formation, Reorganization, and Liquidation

Forming and Operating Partnerships

Dispositions of Partnership Interests and Partnership Distributions

S Corporations

State and Local Taxes

The US Taxation of Multinational Transactions

Transfer Taxes and Wealth Planning

Filters