Question 1

Match each statement with the correct term below.
-Defined contribution plan

Accepted Answer

A) A separate, parallel tax system designed to ensure a taxpayer pays some tax. 
B) A compensation tool that is based on potential price increases of the company's stock. 
C) An individual trust account maintained for the exclusive benefit of an individual or beneficiary. 
D) A type of defined contribution pension plan in which the company and the employee contribute a fixed percentage of the employee's salary to the plan. 
E) A pension plan in which the benefits are based on the number of years an employee has worked for a company and on the employee's annual salary.
F)A pension plan whose benefits are determined by the amount of contributions the employee and the company contribute to the plan and the earnings of the plan. 
A) A separate, parallel tax system designed to ensure a taxpayer pays some tax. 
B) A compensation tool that is based on potential price increases of the company's stock. 
C) An individual trust account maintained for the exclusive benefit of an individual or beneficiary. 
D) A type of defined contribution pension plan in which the company and the employee contribute a fixed percentage of the employee's salary to the plan. 
E) A pension plan in which the benefits are based on the number of years an employee has worked for a company and on the employee's annual salary.
F)A pension plan whose benefits are determined by the amount of contributions the employee and the company contribute to the plan and the earnings of the plan.

Question 2

A qualified distribution from a Roth IRA must meet which of the following requirements:
I.The distribution must be made on or after the taxpayer reaches age 591/2.
II.The distribution is for qualified education expenses.
III.The taxpayer must begin distributions after reaching age 701/2.
​

Accepted Answer

A) Only statement I is correct. 
B) Only statement II is correct. 
C) Only Statements I and II are correct. 
D) Only statement III is correct. 
E) Only statements II and III are correct. 
A) Only statement I is correct. 
B) Only statement II is correct. 
C) Only Statements I and II are correct. 
D) Only statement III is correct. 
E) Only statements II and III are correct.

Question 3

Roland is an employee with the Belmont Corporation.Belmont maintains a money purchase plan for all its employees.Determine the maximum deductible contribution Belmont can make to the pension plan in each of the following situations:
a.Roland's salary is $100,000.
b.Roland's salary is $225,000.

Accepted Answer

The answer of Roland is an employee with the Belmont...

Question 4

Helen receives the right to acquire 700 shares of Smith Corporation stock through the company's incentive stock option plan.The fair market value of the stock at the date of the grant is $8 and the exercise price of the option is $15 per share.The fair market value of the stock at the date of exercise is $19.Helen will recognize income at the date of grant and the exercise date of
​

Accepted Answer

The answer of Helen receives the right to acquire 700...

Question 5

On May 10,2014,Rafter Corporation granted Peter an option to acquire 500 shares of the company's stock for $10 per share.The fair market price of the stock on the date of grant was $12.The fair market value of the option at the date of grant was $3.Peter exercises the option on July 1,2016,when the fair market value of the stock is $20.How much income must Peter report at the date of exercise?

Accepted Answer

A) $-0- 
B) $1,200 
C) $1,800 
D) $3,600 
E) $5,400 
A) $-0- 
B) $1,200 
C) $1,800 
D) $3,600 
E) $5,400

Question 6

The adjustment for three-fourths of the excess adjusted current earnings (ACE)over AMTI before the ACE adjustment applies only to corporations.

Accepted Answer

A) True 
 B)False

Question 7

Alex is 37 years old,single and employee of Ellis Company.
I.If Alex is an active participant in the company's pension plan,he is allowed to make a contribution to his IRA account only if his adjusted gross income is less than $61,000.
II.If Alex is an active participant in the company's pension plan,and has adjusted gross income of $66,000,he is allowed to contribute $5,500 to his IRA account,but he is only allowed a deduction of $2,750 for the contribution because his adjusted gross income is between $61,000 - $71,000.
​

Accepted Answer

A) Only statement I is correct 
B) Only statement II is correct 
C) Both statements are correct. 
D) Neither statement is correct. 
A) Only statement I is correct 
B) Only statement II is correct 
C) Both statements are correct. 
D) Neither statement is correct.

Question 8

The maximum contribution that can be made on behalf of an owner-partner in a Keogh defined contribution money purchase plan is:

Accepted Answer

A) The lower of 15% of net-self employment income or $53,000 
B) The lower of 13.0435% of net-self employment income or $53,000 
C) The lower of 20% of net-self employment income or $53,000 
D) The lower of 25% of net-self employment income or $53,000 
A) The lower of 15% of net-self employment income or $53,000 
B) The lower of 13.0435% of net-self employment income or $53,000 
C) The lower of 20% of net-self employment income or $53,000 
D) The lower of 25% of net-self employment income or $53,000

Question 9

Peter opened his IRA in 2003 and withdrew money to purchase a house in 2016.Since the distribution qualified as a "qualified first-time-homebuyer expenses," it is not subject to the 10% early withdrawal penalty.

Accepted Answer

A) True 
 B)False

Question 10

Savings incentive match plan for employees (SIMPLE)were created to encourage small businesses to establish retirement plans for their employees.

Accepted Answer

A) True 
 B)False

Question 11

Posie is an employee of Geiger Technology and earns $90,000 in 2016.The maximum amount Geiger can contribute to a profit sharing plan on behalf of Posie is

Accepted Answer

A) $6,000 
B) $13,500 
C) $22,500 
D) $25,000 
E) $49,000 
A) $6,000 
B) $13,500 
C) $22,500 
D) $25,000 
E) $49,000

Question 12

Concerning individual retirement accounts (IRAs),
I.A single taxpayer that is an active participant in a qualified plan and has adjusted gross income of $64,000 may contribute and deduct up to $5,500 of the annual contribution.
II.A taxpayer who is not an active participant and whose spouse does not work may contribute $11,000 into two separate IRAs but can only deduct $5,500 for AGI.​

Accepted Answer

A) Only statement I is correct. 
B) Only statement II is correct. 
C) Both statements are correct. 
D) Neither statement is correct. 
A) Only statement I is correct. 
B) Only statement II is correct. 
C) Both statements are correct. 
D) Neither statement is correct.

Question 13

Hillside Group,a partnership,purchased a building for $60,000 that was originally placed in service in 1929.The partnership incurs $180,000 rehabilitating the building.The building serves as the partnership's headquarters.The rehabilitation is completed in November 2016.What amount can the Hillside Group claim on their partnership return as a rehabilitation tax credit?

Accepted Answer

A) $2,000 
B) $3,000 
C) $6,000 
D) $18,000 
E) $24,000 
A) $2,000 
B) $3,000 
C) $6,000 
D) $18,000 
E) $24,000

Question 14

Rodrigo and Raquel are married with 2 dependent children,age 18 and 20,and reported the following items on their 2016 tax return:   
​
Determine Rodrigo and Raquel's regular tax liability and,if applicable,the amount of their alternative minimum tax.

Accepted Answer

The answer of Rodrigo and Raquel are married with 2...

Question 15

Pension plans are subject to excess contribution penalties.Which of the following are correct:
I.There is an excess contribution penalty for IRAs or Roth IRAs that equal 6% of the amount in excess of $5,500 or the value of the individual's IRA whichever is less.
II.A 10% excess contribution penalty applies to IRAs and Roth IRAs.
​

Accepted Answer

A) Only statement I is correct. 
B) Only statement II is correct. 
C) Both statements are correct. 
D) Neither statement is correct. 
A) Only statement I is correct. 
B) Only statement II is correct. 
C) Both statements are correct. 
D) Neither statement is correct.

Question 16

A U.S.formed multinational corporation
I.Can avoid the payment of tax on appreciated property by transferring the appreciated property to a controlled foreign corporation and then selling the property.
II.Is not subject to the transfer pricing rules that a foreign multinational must observe.
​

Accepted Answer

A) Only statement I is correct. 
B) Only statement II is correct. 
C) Both statements are correct. 
D) Neither statement is correct. 
A) Only statement I is correct. 
B) Only statement II is correct. 
C) Both statements are correct. 
D) Neither statement is correct.

Question 17

A Keogh plan is a type of qualified pension for self-employed individuals.An individual or entity that establishes a Keogh plan can
I.Only establish a defined contribution profit sharing pension plan.
II.Have both employees and self-employed individuals as participants.
​

Accepted Answer

A) Only statement I is correct. 
B) Only statement II is correct. 
C) Both statements are correct. 
D) Neither statement is correct. 
A) Only statement I is correct. 
B) Only statement II is correct. 
C) Both statements are correct. 
D) Neither statement is correct.

Question 18

Gilberto is a Spanish citizen living in Canada working as a computer programmer for Excel Designs,Inc.,a U.S.company.
I.Gilberto is a nonresident alien for U.S.tax purposes.
II.If Gilberto earns $10,000 for a consulting job in Detroit,this income will be subject to U.S.tax.
​

Accepted Answer

A) Only statement I is correct. 
B) Only statement II is correct. 
C) Both statements are correct. 
D) Neither statement is correct. 
A) Only statement I is correct. 
B) Only statement II is correct. 
C) Both statements are correct. 
D) Neither statement is correct.

Question 19

Match each statement with the correct term below.
-Money purchase plan

Accepted Answer

A) A separate, parallel tax system designed to ensure a taxpayer pays some tax. 
B) A compensation tool that is based on potential price increases of the company's stock. 
C) An individual trust account maintained for the exclusive benefit of an individual or beneficiary. 
D) A type of defined contribution pension plan in which the company and the employee contribute a fixed percentage of the employee's salary to the plan. 
E) A pension plan in which the benefits are based on the number of years an employee has worked for a company and on the employee's annual salary.
F)A pension plan whose benefits are determined by the amount of contributions the employee and the company contribute to the plan and the earnings of the plan. 
A) A separate, parallel tax system designed to ensure a taxpayer pays some tax. 
B) A compensation tool that is based on potential price increases of the company's stock. 
C) An individual trust account maintained for the exclusive benefit of an individual or beneficiary. 
D) A type of defined contribution pension plan in which the company and the employee contribute a fixed percentage of the employee's salary to the plan. 
E) A pension plan in which the benefits are based on the number of years an employee has worked for a company and on the employee's annual salary.
F)A pension plan whose benefits are determined by the amount of contributions the employee and the company contribute to the plan and the earnings of the plan.

Question 20

All of the following are requirements of a qualified pension plan except:

Accepted Answer

A) The plan must be in writing. 
B) The plan cannot discriminate in favor of highly paid employees. 
C) The plan must be for the exclusive benefit of the employees or their beneficiaries. 
D) The plan must cover all employees who have worked for the company more than 18 months. 
E) The plan must limit the amount of contributions that can be made to the plan and/or the benefits received from the plan. 
A) The plan must be in writing. 
B) The plan cannot discriminate in favor of highly paid employees. 
C) The plan must be for the exclusive benefit of the employees or their beneficiaries. 
D) The plan must cover all employees who have worked for the company more than 18 months. 
E) The plan must limit the amount of contributions that can be made to the plan and/or the benefits received from the plan.

Match each statement with the correct term below. -Defined contribution plan

A qualified distribution from a Roth IRA must meet which of the following requirements: I.The distribution must be made on or after the taxpayer reaches age 59¹/₂. II.The distribution is for qualified education expenses. III.The taxpayer must begin distributions after reaching age 70¹/₂.

Roland is an employee with the Belmont Corporation.Belmont maintains a money purchase plan for all its employees.Determine the maximum deductible contribution Belmont can make to the pension plan in each of the following situations: a.Roland's salary is $100,000. b.Roland's salary is $225,000.

The adjustment for three-fourths of the excess adjusted current earnings (ACE)over AMTI before the ACE adjustment applies only to corporations.

The maximum contribution that can be made on behalf of an owner-partner in a Keogh defined contribution money purchase plan is:

Peter opened his IRA in 2003 and withdrew money to purchase a house in 2016.Since the distribution qualified as a "qualified first-time-homebuyer expenses," it is not subject to the 10% early withdrawal penalty.

Savings incentive match plan for employees (SIMPLE)were created to encourage small businesses to establish retirement plans for their employees.

Posie is an employee of Geiger Technology and earns $90,000 in 2016.The maximum amount Geiger can contribute to a profit sharing plan on behalf of Posie is

Rodrigo and Raquel are married with 2 dependent children,age 18 and 20,and reported the following items on their 2016 tax return: Determine Rodrigo and Raquel's regular tax liability and,if applicable,the amount of their alternative minimum tax.

A U.S.formed multinational corporation I.Can avoid the payment of tax on appreciated property by transferring the appreciated property to a controlled foreign corporation and then selling the property. II.Is not subject to the transfer pricing rules that a foreign multinational must observe.

A Keogh plan is a type of qualified pension for self-employed individuals.An individual or entity that establishes a Keogh plan can I.Only establish a defined contribution profit sharing pension plan. II.Have both employees and self-employed individuals as participants.

Gilberto is a Spanish citizen living in Canada working as a computer programmer for Excel Designs,Inc.,a U.S.company. I.Gilberto is a nonresident alien for U.S.tax purposes. II.If Gilberto earns $10,000 for a consulting job in Detroit,this income will be subject to U.S.tax.

Match each statement with the correct term below. -Money purchase plan

All of the following are requirements of a qualified pension plan except:

Federal Income Taxation-An Overview

Income Tax Concepts

Income Sources

Income Exclusions

Introduction to Business Expenses

Business Expenses

Losses-Deductions and Limitations

Taxation of Individuals

Acquisitions of Property

Cost Recovery on Property: Depreciation, depletion, and Amortization

Property Dispositions

Non-Recognition Transactions

Choice of Business Entity-General Tax and Nontax Factorsformation

Choice of Business Entity-Operations and Distributions

Tax Research

Filters

Exam 15: Choice of Business Entity-Other Considerations

Match each statement with the correct term below. -Defined contribution plan

A qualified distribution from a Roth IRA must meet which of the following requirements: I.The distribution must be made on or after the taxpayer reaches age 591/2. II.The distribution is for qualified education expenses. III.The taxpayer must begin distributions after reaching age 701/2. ​

Roland is an employee with the Belmont Corporation.Belmont maintains a money purchase plan for all its employees.Determine the maximum deductible contribution Belmont can make to the pension plan in each of the following situations: a.Roland's salary is $100,000. b.Roland's salary is $225,000.

The adjustment for three-fourths of the excess adjusted current earnings (ACE)over AMTI before the ACE adjustment applies only to corporations.

The maximum contribution that can be made on behalf of an owner-partner in a Keogh defined contribution money purchase plan is:

Peter opened his IRA in 2003 and withdrew money to purchase a house in 2016.Since the distribution qualified as a "qualified first-time-homebuyer expenses," it is not subject to the 10% early withdrawal penalty.

Savings incentive match plan for employees (SIMPLE)were created to encourage small businesses to establish retirement plans for their employees.

Posie is an employee of Geiger Technology and earns $90,000 in 2016.The maximum amount Geiger can contribute to a profit sharing plan on behalf of Posie is

Rodrigo and Raquel are married with 2 dependent children,age 18 and 20,and reported the following items on their 2016 tax return: ​ Determine Rodrigo and Raquel's regular tax liability and,if applicable,the amount of their alternative minimum tax.

A U.S.formed multinational corporation I.Can avoid the payment of tax on appreciated property by transferring the appreciated property to a controlled foreign corporation and then selling the property. II.Is not subject to the transfer pricing rules that a foreign multinational must observe. ​

A Keogh plan is a type of qualified pension for self-employed individuals.An individual or entity that establishes a Keogh plan can I.Only establish a defined contribution profit sharing pension plan. II.Have both employees and self-employed individuals as participants. ​

Gilberto is a Spanish citizen living in Canada working as a computer programmer for Excel Designs,Inc.,a U.S.company. I.Gilberto is a nonresident alien for U.S.tax purposes. II.If Gilberto earns $10,000 for a consulting job in Detroit,this income will be subject to U.S.tax. ​

Match each statement with the correct term below. -Money purchase plan

All of the following are requirements of a qualified pension plan except:

Federal Income Taxation-An Overview

Income Tax Concepts

Income Sources

Income Exclusions

Introduction to Business Expenses

Business Expenses

Losses-Deductions and Limitations

Taxation of Individuals

Acquisitions of Property

Cost Recovery on Property: Depreciation, depletion, and Amortization

Property Dispositions

Non-Recognition Transactions

Choice of Business Entity-General Tax and Nontax Factorsformation

Choice of Business Entity-Operations and Distributions

Tax Research

Filters

A qualified distribution from a Roth IRA must meet which of the following requirements: I.The distribution must be made on or after the taxpayer reaches age 59¹/₂. II.The distribution is for qualified education expenses. III.The taxpayer must begin distributions after reaching age 70¹/₂.

Rodrigo and Raquel are married with 2 dependent children,age 18 and 20,and reported the following items on their 2016 tax return: Determine Rodrigo and Raquel's regular tax liability and,if applicable,the amount of their alternative minimum tax.

A U.S.formed multinational corporation I.Can avoid the payment of tax on appreciated property by transferring the appreciated property to a controlled foreign corporation and then selling the property. II.Is not subject to the transfer pricing rules that a foreign multinational must observe.

A Keogh plan is a type of qualified pension for self-employed individuals.An individual or entity that establishes a Keogh plan can I.Only establish a defined contribution profit sharing pension plan. II.Have both employees and self-employed individuals as participants.

Gilberto is a Spanish citizen living in Canada working as a computer programmer for Excel Designs,Inc.,a U.S.company. I.Gilberto is a nonresident alien for U.S.tax purposes. II.If Gilberto earns $10,000 for a consulting job in Detroit,this income will be subject to U.S.tax.