Question 1

In a stock bonus plan, contributions are dependent on the employer's profits.

Accepted Answer

A) True 
 B)False

Question 2

If a person has funds from sources other than retirement assets when he or she retires, which retirement asset should be spent first?

Accepted Answer

The most tax-efficient result is to post

Question 3

Contributions to a Roth IRA can be made up to the due date (excluding extensions) of the taxpayer's income tax return.

Accepted Answer

A) True 
 B)False

Question 4

If an employer's contribution to a SEP IRA is less than $56,000 in 2019 (or 25% of the employee's earned income, if less), the employee can contribute the difference.

Accepted Answer

A) True 
 B)False

Question 5

Which of the following characteristics is not a characteristic of a stock bonus plan?

Accepted Answer

A) It can be in the form of a defined benefit plan. 
B) Contributions need not be dependent on employer's profits. 
C) It is exempt from funding requirements. 
D) It is not subject to plan termination insurance. 
E) None of these. 
A) It can be in the form of a defined benefit plan. 
B) Contributions need not be dependent on employer's profits. 
C) It is exempt from funding requirements. 
D) It is not subject to plan termination insurance. 
E) None of these.

Question 6

Jana has $225,000 of earned income in 2019.Calculate the amount she can contribute to a SEP.

Accepted Answer

A) $22,500 
B) $24,500 
C) $56,000 
D) $56,250 
E) None of these 
A) $22,500 
B) $24,500 
C) $56,000 
D) $56,250 
E) None of these

Question 7

For the spousal IRA provision to apply, a joint return must be filed.

Accepted Answer

A) True 
 B)False

Question 8

A failure to make a minimum required distribution to a participant in any taxable year results in a 50% nondeductible excise tax on any excess of the amount that should have been distributed over the amount that actually was distributed.

Accepted Answer

A) True 
 B)False

Question 9

Which of the following characteristics does not describe a defined benefit pension plan?

Accepted Answer

A) Actuarial calculations are required to determine the employer's annual contribution. 
B) Upon retirement, the employee's pension amount depends on the value of her or his account. 
C) Forfeitures must reduce subsequent funding costs and cannot increase the benefits any participant can receive under the plan. 
D) A separate account is not required to be maintained for each participant. 
E) None of these. 
A) Actuarial calculations are required to determine the employer's annual contribution. 
B) Upon retirement, the employee's pension amount depends on the value of her or his account. 
C) Forfeitures must reduce subsequent funding costs and cannot increase the benefits any participant can receive under the plan. 
D) A separate account is not required to be maintained for each participant. 
E) None of these.

Question 10

The maximum annual contribution to a Roth IRA for an unmarried taxpayer who is age 35 is the lesser of $6,000 or the individual's compensation for the year in 2019.

Accepted Answer

A) True 
 B)False

Question 11

Yvonne exercises incentive stock options (ISOs) for 100 shares of Apple Corporation stock at the option price of $100 per share on May 21, 2019, when the fair market value is $120 per share.She holds the stock for only two years and sells the shares for $115 per share.Determine the recognized gain on the sale and classify it as capital or ordinary.

Accepted Answer

A) $2,000 ordinary income and $2,000 STCG. 
B) $2,000 ordinary income and $2,000 LTCG. 
C) $4,000 ordinary income. 
D) $1,500 LTCG. 
E) None of these. 
A) $2,000 ordinary income and $2,000 STCG. 
B) $2,000 ordinary income and $2,000 LTCG. 
C) $4,000 ordinary income. 
D) $1,500 LTCG. 
E) None of these.

Question 12

Pony, Inc., issues restricted stock to employees in July 2019, with a two-year vesting period and an SRF.An employee must remain a full-time employee of Pony for two years after the restricted stock is issued.The stock is trading at $10 per share when it is issued.An employee, Sam, decides to make the § 83(b) election with his 1,000 shares.At the end of 2019, the stock is selling for $13 per share.What amount, if any, can Pony take as a compensation deduction?

Accepted Answer

A) $0. 
B) $10,000 in 2019. 
C) $13,000 in 2019. 
D) $10,000 when stock is sold. 
E) $13,000 when stock is sold. 
A) $0. 
B) $10,000 in 2019. 
C) $13,000 in 2019. 
D) $10,000 when stock is sold. 
E) $13,000 when stock is sold.

Question 13

Distributions from a Roth IRA that are subject to taxation are treated first as from earnings and last as from contributions.

Accepted Answer

A) True 
 B)False

Question 14

In applying the IRA phase-out provision, an individual is considered an active participant in an employer-sponsored retirement plan merely because an individual's spouse is an active participant for any part of a plan year.

Accepted Answer

A) True 
 B)False

Question 15

Frank established a Roth IRA at age 25 and contributed a total of $131,244 to it over 38 years.The account is now worth $376,000.How much of these funds can Frank withdraw tax-free?

Accepted Answer

A) $0 
B) $131,244 
C) $244,756 
D) $376,000 
E) None of these 
A) $0 
B) $131,244 
C) $244,756 
D) $376,000 
E) None of these

Question 16

Saysha is an officer of a local bank that merges with a national bank, resulting in a change of ownership.She loses her job as a result of the merger, but she receives a cash settlement of $390,000 from her employer under her golden parachute.Her average annual compensation for the past five tax years is $110,000.Calculate any nondeductible excise tax Saysha must pay, if any.

Accepted Answer

A) $0. 
B) $56,000. 
C) $110,000. 
D) $280,000. 
E) Some other amount. 
A) $0. 
B) $56,000. 
C) $110,000. 
D) $280,000. 
E) Some other amount.

Question 17

Merrill is a participant in a SIMPLE § 401(k) plan, and he elects to contribute 4% of his $40,000 compensation to the account, and his employer contributes 3%.What amount, if any, will vest immediately?

Accepted Answer

A) $0 
B) $1,200 
C) $1,600 
D) $2,800 
E) None of these 
A) $0 
B) $1,200 
C) $1,600 
D) $2,800 
E) None of these

Question 18

Nick negotiates a $4.5 million contract per year with a major college football program to become its head coach. Calculate any tax payable by the university, if any, in the first year of his contract.

Accepted Answer

A) None 
B) $210,000 
C) $735,000 
D) $945,000 
E) Some other amount 
A) None 
B) $210,000 
C) $735,000 
D) $945,000 
E) Some other amount

Question 19

A 20% excise tax is imposed on nondeductible contributions by an employer to a qualified plan.

Accepted Answer

A) True 
 B)False

Question 20

Under a defined benefit plan, the annual benefit payable to an employee is limited to the lesser of $225,000 (in 2019)
or 100% of the employee's average compensation for the highest three years of employment.

Accepted Answer

A) True 
 B)False

In a stock bonus plan, contributions are dependent on the employer's profits.

If a person has funds from sources other than retirement assets when he or she retires, which retirement asset should be spent first?

Contributions to a Roth IRA can be made up to the due date (excluding extensions) of the taxpayer's income tax return.

If an employer's contribution to a SEP IRA is less than $56,000 in 2019 (or 25% of the employee's earned income, if less), the employee can contribute the difference.

Which of the following characteristics is not a characteristic of a stock bonus plan?

Jana has $225,000 of earned income in 2019.Calculate the amount she can contribute to a SEP.

For the spousal IRA provision to apply, a joint return must be filed.

A failure to make a minimum required distribution to a participant in any taxable year results in a 50% nondeductible excise tax on any excess of the amount that should have been distributed over the amount that actually was distributed.

Which of the following characteristics does not describe a defined benefit pension plan?

The maximum annual contribution to a Roth IRA for an unmarried taxpayer who is age 35 is the lesser of $6,000 or the individual's compensation for the year in 2019.

Distributions from a Roth IRA that are subject to taxation are treated first as from earnings and last as from contributions.

In applying the IRA phase-out provision, an individual is considered an active participant in an employer-sponsored retirement plan merely because an individual's spouse is an active participant for any part of a plan year.

Frank established a Roth IRA at age 25 and contributed a total of $131,244 to it over 38 years.The account is now worth $376,000.How much of these funds can Frank withdraw tax-free?

Merrill is a participant in a SIMPLE § 401(k) plan, and he elects to contribute 4% of his $40,000 compensation to the account, and his employer contributes 3%.What amount, if any, will vest immediately?

Nick negotiates a $4.5 million contract per year with a major college football program to become its head coach. Calculate any tax payable by the university, if any, in the first year of his contract.

A 20% excise tax is imposed on nondeductible contributions by an employer to a qualified plan.

Under a defined benefit plan, the annual benefit payable to an employee is limited to the lesser of $225,000 (in 2019) or 100% of the employee's average compensation for the highest three years of employment.

An Introduction to Taxation and Understanding the Federal Tax Law

Working With the Tax Law

Tax Formula and Tax Determination an Overview of Property Transactions

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, Cost Recovery, Amortization, and Depletion

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Alternative Minimum Tax

Tax Credits and Payment Procedures

Property Transactions: Determination of Gain or Loss and Basic Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: Section 1231 and Recapture Provisions

Accounting Periods and Methods

Corporations and Partnerships

Filters

Exam 19: Deferred Compensation

In a stock bonus plan, contributions are dependent on the employer's profits.

If a person has funds from sources other than retirement assets when he or she retires, which retirement asset should be spent first?

Contributions to a Roth IRA can be made up to the due date (excluding extensions) of the taxpayer's income tax return.

If an employer's contribution to a SEP IRA is less than $56,000 in 2019 (or 25% of the employee's earned income, if less), the employee can contribute the difference.

Which of the following characteristics is not a characteristic of a stock bonus plan?

Jana has $225,000 of earned income in 2019.Calculate the amount she can contribute to a SEP.

For the spousal IRA provision to apply, a joint return must be filed.

A failure to make a minimum required distribution to a participant in any taxable year results in a 50% nondeductible excise tax on any excess of the amount that should have been distributed over the amount that actually was distributed.

Which of the following characteristics does not describe a defined benefit pension plan?

The maximum annual contribution to a Roth IRA for an unmarried taxpayer who is age 35 is the lesser of $6,000 or the individual's compensation for the year in 2019.

Distributions from a Roth IRA that are subject to taxation are treated first as from earnings and last as from contributions.

In applying the IRA phase-out provision, an individual is considered an active participant in an employer-sponsored retirement plan merely because an individual's spouse is an active participant for any part of a plan year.

Frank established a Roth IRA at age 25 and contributed a total of $131,244 to it over 38 years.The account is now worth $376,000.How much of these funds can Frank withdraw tax-free?

Merrill is a participant in a SIMPLE § 401(k) plan, and he elects to contribute 4% of his $40,000 compensation to the account, and his employer contributes 3%.What amount, if any, will vest immediately?

Nick negotiates a $4.5 million contract per year with a major college football program to become its head coach. Calculate any tax payable by the university, if any, in the first year of his contract.

A 20% excise tax is imposed on nondeductible contributions by an employer to a qualified plan.

Under a defined benefit plan, the annual benefit payable to an employee is limited to the lesser of $225,000 (in 2019) or 100% of the employee's average compensation for the highest three years of employment.

An Introduction to Taxation and Understanding the Federal Tax Law

Working With the Tax Law

Tax Formula and Tax Determination an Overview of Property Transactions

Gross Income: Concepts and Inclusions

Gross Income: Exclusions

Deductions and Losses: in General

Deductions and Losses: Certain Business Expenses and Losses

Depreciation, Cost Recovery, Amortization, and Depletion

Deductions: Employee and Self-Employed-Related Expenses

Deductions and Losses: Certain Itemized Deductions

Investor Losses

Alternative Minimum Tax

Tax Credits and Payment Procedures

Property Transactions: Determination of Gain or Loss and Basic Considerations

Property Transactions: Nontaxable Exchanges

Property Transactions: Capital Gains and Losses

Property Transactions: Section 1231 and Recapture Provisions

Accounting Periods and Methods

Corporations and Partnerships

Filters