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A pension or profit-sharing plan must not discriminate in favor of highly compensated employees.What employees meet the definition of "highly compensated" for purposes of these plans?

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Highly compensated employees are those w...

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Damian is age 79.He purchased a single life annuity contract that will pay him $4,000 per month for life.The expected return on the contract is:


A) $40,000.
B) $480,000.
C) $518,400.
D) $936,000.

E) B) and D)
F) B) and C)

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Augustus is single and age 51.He had AGI of $39,000 in tax year 2014 and is an active participant in his employer's pension plan.What is the maximum deductible IRA contribution he can make in 2014?


A) $2,700.
B) $3,800.
C) $5,500.
D) $6,500.

E) C) and D)
F) B) and D)

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Regarding a full or partial rollover of assets from one retirement plan to another retirement plan:


A) Rollovers are normally taxable to the beneficiary.
B) Rollovers are permitted only in unusual circumstances.
C) A tax-free rollover can be made from a traditional IRA to another traditional IRA.
D) A tax-free rollover can be made from a traditional IRA to a Roth IRA.

E) A) and D)
F) C) and D)

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


A) Distributions used to pay qualified higher education expenses of the beneficiary are tax-free.
B) A person can contribute to a CESA only if the beneficiary is related by blood or marriage.
C) Taxpayers who file a joint tax return can contribute to a CESA only if their AGI is less than $150,000.
D) Contributions to a CESA are tax deductible and the distributions are tax-free (if used for their intended purpose) .

E) B) and C)
F) A) and B)

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Regarding withdrawals from a Roth IRA:


A) There are minimum withdrawal requirements for a Roth IRA.
B) Roth IRA withdrawals are taxable if made after the five-tax-year period beginning with the first tax year in which a Roth contribution was made.
C) Roth withdrawals are deemed to first come from contributions followed by earnings.
D) Withdrawals that fail to meet the five-year holding period requirement are not taxable to the extent they do not exceed earnings.

E) None of the above
F) B) and D)

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


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.

E) A) and D)
F) All of the above

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Gwen is age 51,married,and reported AGI of $99,000 in tax year 2014.She is an active participant in her employer's pension plan.What amount of deductible IRA contribution is disallowed in 2014?


A) $825.
B) $975.
C) $4,175.
D) $5,525.

E) B) and D)
F) All of the above

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

A) True
B) False

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Exam Company provides a SIMPLE plan for its employees.Under the plan,employees can contribute up to 6% of their salary and Exam Corporation will match the employee's contribution up to 3% of the employee's salary.Ben,age 44,is an employee of Exam Corporation and elects to contribute the maximum amount of his $95,000 salary to the SIMPLE plan.What is the total contribution made to Ben's SIMPLE account? When does Ben's contribution vest? When does the contribution by Exam Company vest? What is the amount contributed to Ben's account if Ben's salary is $210,000?

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Ben will contribute $5,700 to the SIMPLE...

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Hyman is age 34,single,and has AGI of $130,000.He would like to contribute to a Coverdell Education Savings Account (CESA) for his niece,Danielle.Danielle's father has already contributed $500 to a CESA in 2014.What is the maximum CESA contribution Hyman can make for Danielle in 2014?


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

E) A) and C)
F) B) and D)

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Annual contributions to a Keogh plan cannot exceed the greater of $52,000 or 100% of compensation.

A) True
B) False

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In 2014,a 52-year-old participant in a 401(k) plan may contribute a maximum of:


A) $6,500.
B) $14,500.
C) $17,500.
D) $23,000.

E) A) and D)
F) A) and C)

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

A) True
B) False

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


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.

E) A) and C)
F) A) and B)

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Which of the following statements is incorrect?


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.

E) B) and C)
F) C) and D)

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Contributions to a qualified pension plan can be deducted immediately by an employer.

A) True
B) False

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


A) An individual can be the beneficiary of multiple CESAs.
B) Annual contributions are limited to $2,000 per beneficiary,per contributor.
C) A contributor cannot make a contribution for himself/herself.
D) For single taxpayers,permitted contributions begin to be phased out when AGI reaches $90,000.

E) B) and C)
F) C) and D)

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Chandelle and Treymane are married and have combined AGI of $215,000.They would like to contribute to a Coverdell Education Savings Account for their grandson.What is the maximum contribution they can make in 2014?


A) $2,000.
B) $1,667.
C) $333.
D) $0.

E) B) and C)
F) A) and B)

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Which of the following statements is incorrect?


A) An annuity is a series of payments pursuant to a contract.
B) A payment to a beneficiary from a pension plan is called a distribution.
C) Contributions to a pension plan can only be made by the beneficiary.
D) With a qualified pension plan,earnings on plan assets are not taxed in the year earned.

E) A) and B)
F) A) and C)

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Showing 21 - 40 of 125

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