|
CPE Accounting & Tax Institute |
CPE & CE Credit:
17 Hours (Tax) |
Please
submit answer form
with multiple choice or true/false answers for the
following questions.
Submit completed answer form rather than the final exam for
grading.
What's New for 2007
Modified AGI limit for traditional IRA contributions increased
1. For 2007, if you are covered by a retirement plan at work, your deduction for contributions to a traditional IRA will be reduced (phased out) if your modified adjusted gross income (AGI) is more than $83,000 but less than $103,000 for a married couple filing a joint return or a qualifying widow(er).
A. True
B. False
2. For 2007, if you are not covered by a retirement plan at work, your deduction for contributions to a traditional IRA may be reduced (phased out) if you either live with your spouse at any time during 2007 or file a joint return for 2007
A. True
B. False
Modified AGI limit for Roth IRA contributions
3. For 2007, your Roth IRA contribution limit is reduced (phased out) if your filing status is married filing jointly or qualifying widow(er) and your modified AGI is at least:
A. $134,000
B. $141,000
C. $156,000
D. None of the above
Modified AGI limit for retirement savings contribution credit increased
4. For 2007, you may be able to claim the retirement savings contribution credit if your modified adjusted gross income (AGI) is not more than $52,000 if your filing satus is married filing jointly.
A. True
B. False
Rollover by nonspouse beneficiary
5. Beginning in 2007, a direct transfer from a deceased employee's IRA qualified pension, profit-sharing or stock bonus plan, annuity plan, tax-sheltered annuity (section 403(b) plan, or governmental deferred compensation (section 457) plan to an IRA set up to receive the distribution on your behalf can not be treated as an elibible rollover distribution if you are the designated beneficiary of the plan and not the employee's spouse.
A. True
B. False
Qualified health savings account (HSA) funding distribution
6. Beginning in 2007, if you are covered by a high deductible health plan (HDHP), you may be able to make a nontaxable HSA funding distribution from your IRA (other than SEP or SIMPLE IRA) that would otherwise be included in income.
A. True
B. False
What's New for 2008
Traditional IRA contribution and deduction limit
7. The contribution limit to your traditional IRA for 2008 will be increased to the smaller of your taxable compensation for the year or:
A. $3,500
B. $4,000
C. $4,500
D. $5,000
Modified AGI limit for traditional IRA contributions increased
8. For 2008, if you are covered by a retirement plan at work, your deduction for contributions to a traditional IRA is reduced (phased out) if your modified adjusted gross income (AGI) is more than $85,000 but less than $105,000 for a married couple filing a joint return.:
A. True
B. False
Modified AGI limit for Roth IRA contributions increased
9. For 2008, your Roth IRA contribution limit is reduced (phased out) if your filing status is single, head of household, or married filing seperately and you did not live with your spouse at any time in 2008 and your modified AGI is at least $101,000.
A. True
B. False
Modified AGI limit for retirement savings contributions credit increased
10. For 2008, you may be able to claim the retirement savings contributions credit if your modified adjusted gross income (AGI) is not mor than $39,750 if your filing status is married filing jointly.
A. True
B. False
Reminders
Deemed IRAs
11. Aa qualified employer plan (retirement plan) can maintain a separate account or annuity under the plan (a deemed IRA) to receive voluntary employee contributions.
A. True
B. False
Statement of required minimum distribution
12. If a minimum distribution is required from your IRA, the trustee, custodian, or issuer that held the IRA at the end of the preceding year may not simply offer to calculate it for you but must rather report the amount of the required distribution to you.
A. True
B. False
IRA interest
13. Interest earned from your IRA is generally not taxed in the year earned, therefore, it is reported as tax-exempt interest on your return.
A. True
B. False
Introduction
14. Contributions you make to an IRA may be fully or partially deductible, depending on which type of IRA you have and on your circumstances.
A. True
B. False
15. Generally, amounts in your
IRA (including earnings and gains) are not taxed until distributed and in
some cases, amounts are not taxed at all if distributed according to the rules.
A. True
B. False
What is
a Traditional IRA?
16. A traditional IRA is any IRA
including a Roth IRA or a SIMPLE IRA.
A. True
B. False
Who Can Set Up a Traditional IRA?
17. If you were age 70 ½ by the end of the year, you may not
set up and make contributions to a traditional IRA.
A. True
B. False
18. You can make nondeductible contributions to a traditional IRA even though you or your spouse are covered by an employer plan.
A. True
B. False
What is
Compensation?
Self-Employment Income
19. Self-employment income (net earnings from your trade or
business), where your personal services are a material
income-producing factor, qualifies you to set up and contribute to a
traditional IRA.
A. True
B. False
What is
Not Compensation?
20. Deferred compensation received in the current year (compensation
payments postponed from a past year) for personal services qualifies
as taxable compensation to set up and contribute to a traditional
IRA.
A. True
B. False
When and
How Can a Traditional IRA Be Set Up?
21. The time for setting up a traditional IRA is more restrictive
than the time for making contributions.
A. True
B. False
Individual Retirement Account
22. Money in your traditional IRA account may be used to buy a life
insurance policy. Contributions are nondeductible.
A. True
B. False
Individual Retirement Annuity
23. Your traditional IRA can be set up with an annuity contract or
an endowment contract purchased from a life insurance company.
A. True
B. False
How Much Can Be Contributed?
Broker's Commissions
24. Broker's commissions paid in connection with your traditional
IRA are subject to the contribution limit.
A. True
B. False
Trustees' Fees
25. Trustees' administrative fees that are billed separately and
paid in connection with your traditional IRA are not subject to the
contribution limit.
A. True
B. False
General Limit
26. The most that can be contributed
to your traditional IRA for 2007 is the smaller of your compensation or $4,000
($5,000 if you are 50 or older).
A. True
B. False
27.
You may be able to contribute more than the limit maximum for a traditional
IRA depending upon whether all or part of the contributions are non-deductible.
A. True
B. False
More than One IRA
28. You can increase your total IRA contribution limit if you have
more than one traditional IRA.
A. True
B. False
Spousal IRA
29. If you file a joint return,
the total combined contributions that can be made for 2007 to your IRA and
your spouse's IRA combined, can be as much as $8,000 ($9,000 if only one of
you is age 50 or older or $10,000 if both are age 50 or over).
A. True
B. False
Less than Maximum Contributions
30. You can contribute more than the current year limit to your
traditional IRA if contributions in a prior year were less than the
limit.
A. True
B. False
More than Maximum Contributions
31. If contributions to your IRA for a year were more than the
limit, you can apply the excess to a later year if contributions for
that later year are less than the maximum allowed for that year.
However, you may have to pay a penalty.
A. True
B. False
When Can Contributions Be Made?
32. Contributions to your traditional IRA do not need to be in the
form of money (cash, check or money order).
A. True
B. False
33. Fred is age 65 and does not work. Fred may make an IRA contribution if he received alimony or files a joint return with a spouse who has compensation.
A. True
B. False
Contributions Must be Made by Due Date
34. You can make contributions to your traditional IRA for a year at
any time during the year or by the due date for filing your tax
return including extensions.
A. True
B. False
Age 70 ½ Rule
35. Contributions can be made to your traditional IRA the year you
reach age 70 ½, but are nondeductible.
A. True
B. False
How Much
Can You Deduct
36. If you were divorced before the end of the year, you cannot
deduct any contributions to your spouse's IRA.
A. True
B. False
Are You Covered by an Employer Plan
No Vested Interest
37. You are considered covered by a defined contribution plan when
amounts are allocated to your account for the plan year only if you
have a vested interest in the account.
A. True
B. False
Defined Benefit Plan
38. If you are eligible to participate in your employer's defined
benefit plan for the plan year, you are considered covered by the
plan unless:
A. you decline to be covered by the plan
B. you did not make a required contribution
C. you did not perform minimum service to accrue benefit for the
year
D. all of the above
E. none of the above
Situations in Which You Are Not Covered
Social
Security or Railroad Retirement
39. You are considered covered
under an employer retirement plan if you are receiving social security or
railroad retirement.
A. True
B. False
Benefits from Previous Employer
40. You are not considered covered by an employer plan if you
receive retirement from a previous employer's plan and you are not
covered under another employer plan.
A. True
B. False
Reservist
41. If you did not serve more than 90 days active duty during the
year, you may not be considered covered by the plan established for
government employees.
A. True
B. False
Table
1-2 Effect of Modified AGI on Deduction if Covered by Retirement Plan at Work
42. For 2007, if you are covered by a retirement plan at work, you may not
take an IRA deduction if you are a married couple filing a joint return and
your modified adjusted gross income (AGI) is $103,000 or more.
A. True
B. False
Table 1-3 Effect of Modified AGI on Deduction if NOT Covered
by Retirement Plan at Work
43. If you are not covered by
a retirement plan at work, but your spouse is, there is no reduction or elimination
to your traditional IRA deduction if you file jointly and have less than $166,000 modified AGI for 2007.
A. True
B. False
Deduction
Phaseout
44. If either you or your spouse were covered by an employer
retirement plan, your income and filing status could reduce or
eliminate your deduction for contributions to a traditional IRA.
A. True
B. False
If your spouse is covered
45. If you are not covered by an employer retirement plan, but your
spouse is, and you did not receive any social security benefits,
your IRA deduction may be reduced or eliminated entirely depending
on your filing status and modified AGI.
A. True
B. False
Form
1040
46. Modified adjusted gross income is defined as
adjusted gross income before:
A. IRA
deduction
B. student loan interest
C. foreign earned income and housing exclusion or deduction
D. exclusion of qualified bond interest and employer paid adoption
expenses
E. all of the above
Reporting Deductible Contributions
47. You do not have to itemize deductions to claim your deduction
for IRA contributions.
A. True
B. False
Nondeductible Contributions
48. Although your deduction for
IRA contributions may be reduced or eliminated, contributions can be made
to your IRA of up to the general limit or, if it applies, the spousal IRA
limit.
A. True
B. False
Form 8606
49. You are not required to file Form 8606 to report nondeductible
contributions if you do not have to file a tax return for the year.
A. True
B. False
Failure to Report Nondeductible Contributions
50. All of your traditional IRA contributions will be taxed upon
withdrawal as deductible contributions when you fail to report
nondeductible contributions, unless you otherwise prove that
nondeductible contributions were made.
A. True
B. False
Penalty for Overstatement
51. If you overstate the amount of nondeductible contributions on
Form 8606 for other than reasonable cause, the penalty amount for
each overstatement is $100.
A. True
B. False
Cost Basis
52. There is no cost basis in your IRA if you make nondeductible
contributions.
A. True
B. False
What If
You Inherit an IRA?
Inherited from Spouse
53. If you inherit a traditional IRA as the surviving spouse, you
can elect to make contributions to the IRA and treat it as your own.
A. True
B. False
Inherited
from someone other than spouse
54. Nondeductible contributions
can be made to an inherited traditional IRA that you inherit from someone
other than a spouse.
A. True
B. False
IRA with
Basis
55. If you inherit a traditional
IRA from a person other than your spouse who had a basis because of nondeductible
contributions, the basis to you is zero.
A. True
B. False
Federal
Estate Tax Deductions
56. The beneficiary of a traditional
IRA can deduct the part of the estate tax paid on any part of a distribution
that the beneficiary must include in income as income as in respect of a decedent.
A. True
B. False
Can You Move Retirement Plan Assets?
Trustee to Trustee Transfer
57. The transfer of funds in
your traditional IRA from one trustee directly to another trustee is a rollover.
A. True
B. False
Rollovers
58. The two kinds of rollover
contributions to a traditional IRA are when you put amounts you receive from
one traditional IRA into another and when you put amounts you receive from
an employer's qualified plan into a traditional IRA.
A. True
B. False
Time Limit for Making a Rollover Contribution
Rollovers completed after the 60-day period
59. Absent an extension, a distribution
from a traditional IRA that is not rolled over within the 60-day period is
taxable in the year distributed.
A. True
B. False
Rollover From One IRA to Another
Waiting Period Between Rollovers
60. The one-year waiting period
to rollover a second distribution from a traditional IRA does not apply separately
to each traditional IRA you own.
A. True
B. False
Rollover From Employer's Plan Into an IRA
61. You can not rollover all or
part of an eligible rollover distribution from your employer's qualified pension,
profit-sharing or stock bonus plan, annuity plan or tax-sheltered annuity
plan (403 (b) plan) into a traditional IRA.
A. True
B. False
Rollover from Employer's Plan into an IRA
Withholding Requirement
62. The payer of an eligible
rollover distribution must withhold 20% of it unless:
A. The distribution an all previous eligible rollover distributions
you received during the year total less than $200.
B. The distribution consists solely of employer securities, plus
cash of $200 or less in lieu of fractional shares C. All of the
distribution is paid directly to a traditional IRA.
C. Both A and B
No Waiting Period Between Rollovers
63. The once-a-year limit on IRA to IRA rollovers does not apply to rollovers
of employer plan distributions.
A. True
B. False
IRA as a Holding Account (Conduit IRA) for Rollovers to Other
Eligible Plans
64. If you make regular contributions
to the conduit IRA or add funds from other sources, the qualified plan into
which you move funds will continue to be eligible for any optional tax treatment
which it might have otherwise qualified.
A. True
B. False
The same property (or sales proceeds) must be rolled over
65. If you receive property in
an eligible rollover distribution from a qualified retirement plan you can
keep the property and contribute cash to a traditional IRA in place of the
property.
A. True
B. False
Treatment of Gain or Loss
66. If you sell the distributed
property an rollover all the proceeds into a traditional IRA, you must recognize
a gain or loss on the sale proceeds for the tax year that the sale occurred
and increase the IRA cost basis.
A. True
B. False
Life Insurance Contract
67. A life insurance contract
cannot be rolled over from a qualified plan into a traditional IRA.
A. True
B. False
Distributions Received by a Surviving Spouse
68. A surviving spouse can rollover
into either a traditional IRA or another employer qualified plan, part or
all of any eligible distribution received from an employer's qualified plan
because of the death of the employee's spouse.
A. True
B. False
Distributions under Divorce or Similar Proceedings (Alternate
Payee)
69. As spouse or former spouse
of the employee, you receive a distribution from a qualified employer plan
that resulted from a divorce or similar proceeding, you may not roll it over
into a traditional IRA.
A. True
B. False
Keogh Plans and Rollovers
70. If you are self-employed and
receive an eligible rollover distribution from a Keogh plan, you can roll
over all or part of the distribution into a traditional IRA.
A. True
B. False
Distribution from a Tax-sheltered Annuity
71. An eligible rollover distribution
from a tax-sheltered annuity plan can be rolled over into another eligible
retirement plan that is not a tax-sheltered annuity plan.
A. True
B. False
Converting
From Any Traditional IRA Into a Roth IRA
72. A married individual filing
separate can convert amounts from a traditional IRA into a Roth IRA if modified
AGI is not more than $100,000.
A. True
B. False
Inherited
IRAs
73. You can convert a traditional IRA inherited from someone other than your
spouse to a Roth IRA.
A. True
B. False
Recharacterizations
74. You may be able to treat a contribution to one type of IRA as having been
made to a different type of IRA, if you make a trustee to trustee transfer
by your tax return due date (including extensions).
A. True
B. False
When Can You Withdraw or Use Assets?
Contributions
Returned Before Due Date of Return
75. If you made IRA contributions
during the year and took no deduction for such contribution, you can withdraw
the contribution tax free by the due date of your return and during an extension
period if you also withdraw any interest on such contribution.
A. True
B. False
When
Must You Withdraw Assets (Required Minimum Distributions)
76. The requirements for withdrawing IRA funds are the same whether you are
the IRA owner or the beneficiary of a decedent's IRA.
A. True
B. False
IRA Owners
Distributions
by the Required Beginning Date
77. You must withdraw the entire
balance in your traditional IRA or start receiving periodic distributions
from your IRA by December 31 of the year following the year in which you reach
age 70 ½.
A. True
B. False
Figuring the Owner's Required Minimum Distribution
Distributions
78. The IRA account balance is
not reduced by any distributions made after the end of the year which are
considered to have been made during the year.
A. True
B. False
Distributions
during your lifetime
79. The distribution period (which
table you use) is affected by your beneficiary's age except when your sole
beneficiary is your spouse who is more than 10 years younger than you are.
A. True
B. False
IRA Beneficiaries
Owner Died On or After Required Beginning Date
80. If the owner died on or after his or her required beginning date, and you are the designated beneficiary, you generally must base required minimum distributions for years after the year of the owner's death on the longer of your single life expectancy as shown on Table 1, or the owner's life expectancy as determined under Death on or after required beginning date, under Beneficiary not an individual.
A. True
B. False
Which Table Do You Use To Determine Your Required Minimum Distribution?
Surviving
spouse
81. If you are the owner's surviving
spouse and sole designated beneficiary, and the owner had not reached age
70 1/2 when he or she died, and you do not elect to be treated as the owner
of the IRA, you do not have to take distributions (and use Table 1) until
the year in which the owner would have reached 70 1/2.
A. True
B. False
Miscellaneous
Rules for Required Minimum Distributions
More than one IRA
82. Although you must calculate
required minimum distributions separately when you own more than one IRA,
you can take the total distribution from a single IRA account.
A. True
B. False
More than
Minimum Received
83. If you receive more than the
required minimum IRA distribution amount in any year, you can reduce the required
distribution amount in the following year.
A. True
B. False
Are
Distributions Taxable
Failed Financial Institutions
84. The general rule that you
must include non-rollover traditional IRA distributions in your gross income
in the year you receive them, does not apply to distributions by a state agency
as a receiver of an insolvent savings institution.
A. True
B. False
Ordinary
Income
85. Distributions from traditional
IRAs that you must include in income are eligible for the same capital gain
treatment that applies to lump-sum distributions from qualified employer plans.
A. True
B. False
Distributions
Fully or Partly Taxable
Partly Taxable
86. If you made nondeductible
contributions to any of your traditional IRAs, you will be taxed on the cost
basis of these contributions when they are distributed.
A. True
B. False
Recognizing
Losses on IRA Investments
87. When all the amounts in all your traditional IRA accounts have been distributed
to you and the total distributions are less than your unrecovered basis, you
can claim the loss as a miscellaneous itemized deduction.
A. True
B. False
Other
Special IRA
Distribution Situations
Distribution of an Annuity Contract from Your IRA Account
88. If the trustee or custodian
of your traditional IRA account uses the amount in your account to purchase
an annuity contract, you are taxed upon receipt of that contract and not when
you start receiving contract payments.
A. True
B. False
Withholding
IRA Distributions Delivered Outside the United States
89. You can choose exemption
from federal income tax withholding on distributions from your traditional
IRA unless delivered to you outside the U.S. and you are a US citizen.
A. True
B. False
What Acts Result in Penalties or Additional Taxes?
Prohibited
Transactions
90. Examples of prohibited transactions with a traditional IRA include:
A. Making non-deductible contributions
B. Selling property to it
C. Borrowing money from it
D. A and B
E. B and C
Effect
on You or Your Beneficiary
91. If you engage in a prohibited transaction with your traditional IRA account,
you must include the fair market value of all (or part, in certain cases)
of the IRA assets in your gross income for that year and you may have to pay
the 10% tax on premature distributions.
A. True
B. False
Trust Account Set Up by
an Employer or an Employee Association
92. If your employer engages
in a prohibited transaction, your traditional IRA with that employer loses
its IRA treatment.
A. True
B. False
Exempt Transactions
Payments
of cash, property, or other consideration
93. Even if a sponsor makes payments to you or your family, there is no prohibited
transaction if payments are for establishing a traditional IRA, the IRA is
established solely to benefit you and during the year, the total fair market
value of the payments you receive is not more than $10 for IRA deposits of
less than $5,000 or $20 for IRA deposits of $5,000 or more.
A. True
B. False
Excess
Contributions
94. A nondeductible contribution
to your traditional IRA that exceeds your taxable compensation for the year
is not an excess contribution.
A. True
B. False
Excess
Contributions Withdrawn by Due Date of Return
95. You will not have to pay
the 6% tax if you withdraw an excess contribution made during a tax year and
any interest or income earned on excess contribution, by the date your tax
return is due including extensions.
A. True
B. False
How to
Treat Withdrawn Interest or Other Income
96. You must include in your gross income the interest or other income that
was earned on the excess contribution, even if withdrawn in time to avoid
6% tax.
A. True
B. False
Deducting
an Excess Contribution in a Later Year
97. You can reduce an excess contribution
by applying it against an earlier year in which less than the maximum amount
allowable was contributed to traditional IRA.
A. True
B. False
Early Distributions
Early
distributions defined
98. Early distributions generally are amounts distributed from your traditional
IRA account or annuity before you are age 59 1/2, or amounts you receive when
you cash in retirement bonds before you are age 59 1/2.
A. True
B. False
Age
59 ½ Rule
99. Generally, you must pay a
10% tax in addition to any regular income tax, if you withdraw assets from
your traditional IRA before you reach age 59 ½.
A. True
B. False
Exceptions
100. If you have unreimbursed medical expenses that are more than 7.5% of your adjusted gross income, you may not have to pay the 10% additional tax on IRA distributions before age 59 ½.
A. True
B. False
Unreimbursed
Medical Expenses
101. If you are under age 59 ½,
you do not have to pay the tax on early distributions that are not more than
the amount you paid for unreimbursed medical expenses less 7.5% of your adjusted
gross income.
A. True
B. False
Medical
Insurance
102. If you are under age 59 ½,
you may not have to pay the 10% tax on amounts you withdraw from your traditional
IRA used to pay medical insurance.
A. True
B. False
Disabled
103. You may not withdraw from
your traditional IRA before age 59 ½ because of your disability with
being subject to the 10% additional tax.
A. True
B. False
Annuity
104. Even if you are under age
59 ½, you can receive distributions from your traditional IRA that
are part of a series of substantially equal payments over your life without
having to pay the 10% additional tax.
A. True
B. False
Higher
Education Expenses
105. Qualified higher education
expenses paid with individuals earnings, a loan, a gift, an inheritance or
personal savings are included when determining the amount of the withdrawal
that is not subject to the 10% additional tax.
A. True
B. False
Qualified
Higher Education Expenses
106. If you are under age 59 ½,
you are subject to the 10% additional tax on early withdrawals from a traditional
IRA for funds used to pay for room and board at an eligible educational institution
for your son or daughter, if they are only a half-time student.
A. True
B. False
First
Home
107. To qualify for penalty free
withdrawal treatment from a traditional IRA for funds used to buy a first
home, the total distributions can not be more than $10,000 when added to all
your prior qualified first-time home buyer distributions.
A. True
B. False
108. If both husband and wife are first-time homebuyers, their combined total withdrawal from a traditional IRA must not exceed $10,000 to be penalty-free for a first home.
A. True
B. False
First-Time
Homebuyer
109. A first-time homebuyer is
any individual (and his or her spouse, if married) who had no present ownership
interest in a main home during the 2-year period ending on the date the individual
acquires the main home.
A. True
B. False
Excess Accumulations
(Insufficient
Distributions)
110. Generally, you must begin receiving distributions from your traditional
IRA by April 1 of the year following the year in which you reach age 70 ½.
A. True
B. False
Tax on Excess
111. If distributions from your traditional IRA are less than the required
minimum distribution for the year, you may have to pay a 50% excise tax for
that year on balance remaining in your account.
A. True
B. False
Roth IRAs
Deemed IRAs
112. For plan years beginning
after 2002, a qualified employer plan (retirement plan) can maintain a
seperate account or annuity under the plan (deemed IRA) to receive voluntary
employee contributions.
A. True
B. False
What is a Roth IRA
113. Contributions cannot be made
to your Roth IRA after age 70 ½ and you cannot leave amounts in your
Roth IRA as long as you live.
A. True
B. False
Can You
Contribute to a Roth IRA?
114. If you are married, file
a joint return and have modified AGI less than $166,000 for 2007 you can
contribute to a Roth IRA.
A. True
B. False
Can You
Contribute to a Roth IRA for Your Spouse?
115. You can contribute to a Roth
IRA for your spouse if your modified AGI is less than $166,000 for married
filing jointly and the contributions satisfy the spousal IRA limit.
A. True
B. False
Modified AGI
116. Your modified AGI for Roth IRA purposes requires you to add which of
the following deductions and exclusions to your adjusted gross income (AGI):
A. Traditional IRA deduction
B. Student loan interest deduction
C. Exclusion of qualified bond interest shown on Form 8815
D. All of the above
What If I Contribute Too Much
Withdrawal of excess contributions
117. To avoid the 6% penalty
tax on excess contributions to a Roth IRA, you must withdraw the earnings
on the excess contribution and the excess contribution before the due date
for filing your tax return (including extensions).
A. True
B. False
Rollover From a Roth IRA
118.You can withdraw, tax free, all or part of the assets from one Roth IRA
if you contribute them within 60 days to another Roth IRA.
A. True
B. False
Are Distributions Taxable?
What
Are Qualified Distributions
119. Even if a distribution is made after you reach age 59 ½, it must
satisfy the 5-year rule to be a qualified distribution.
A. True
B. False
Ordering Rules For Distributions
120. The order of withdrawals
from a Roth IRA is: regular contributions, taxable portion of conversion contributions,
nontaxable portion of conversion contributions, and earnings on contributions.
A. True
B. False
Must You
Withdraw or Use Roth IRA Assets?
121. The minimum distribution
rules that apply to traditional IRAs when you reach age 70 ½ do not
apply to Roth IRAs.
A. True
B. False
Minimum
distributions
122. You can use your Roth IRA
to satisfy minimum distribution requirements for traditional IRAs.
A. True
B. False
Distributions After Owner's Death
123. When a Roth IRA owner dies,
the minimum distribution rules that apply to traditional IRAs apply to Roth
IRAs as though the owner died before his or her required beginning date.
A. True
B. False
Distributions to Beneficiaries
124. A sole beneficiary spouse can delay distributions until decedent would
have reached age 70 ½.
A. True
B. False
Savings Incentive Match Plans for Employees (SIMPLE)
What's New for 2007
Increase in limit on salary reduction contributions under SIMPLE
125. For 2007, salary reduction contributions (excluding catch-up contributions) that your employer could make on your behalf under a SIMPLE plan increased to $10,500.
A.
True
B. False
Introduction
126. Under a SIMPLE plan, SIMPLE retirement accounts for participating employees can be set up as:
A. Part of a 401(k) plan
B. A plan using IRAs (SIMPLE IRA)
C. Both A and B
D. None of the above
What
is a SIMPLE Plan?
127. A SIMPLE plan is a tax-favored
retirement plan that certain small employers and self-employed individuals
can set up to allow eligible employees to reduce compensation by a certain
percentage and have the employer contribute it to a SIMPLE-IRA.
A. True
B. False
128. All contributions under a SIMPLE IRA plan must be made to SIMPLE IRSs, not to any other type of IRA.
A. True
B. False
Eligible Employees
129. An employee that received
over $5,000 in compensation during any 2 years prior to the current year and
expected to receive at least $5,000 in the calendar year for which contributions
are made, must be allowed to participate in the employer's SIMPLE plan.
A. True
B. False
Excludable Employees
130. An employer may not exclude
from participation in the employer's SIMPLE plan, employees whose retirement
benefits are covered by a collective bargaining agreement (union contract).
A. True
B. False
How Are Contributions Made
131. In addition to salary reduction
contributions, an employer with a SIMPLE plan does not have to make either
matching contributions or non-elective contributions.
A. True
B. False
Non-Elective Employer Contributions
132. If an employer chooses to
make non-elective contributions, instead of matching contributions to employee
SIMPLE-IRAs, contributions must be 2% of employee's compensation for the entire
year up to the compensation limit. For 2007, only $225,000 of your compensation
can be taken into account to figure the contribution limit.
A. True
B. False
When
Can You Withdraw or Use SIMPLE-IRA Assets
Two-year Rule
133. After the two-year period
beginning on the date on which the individual first participated in the SIMPLE
plan, amounts in a SIMPLE-IRA can only be rolled over or transferred to another
SIMPLE-IRA.
A. True
B. False
Additional
Tax on Early Distributions
134. If a rollover distribution
from a SIMPLE-IRA does not satisfy the two-year rule, and is otherwise a premature
distribution, the additional tax is 25% of the amount distributed.
A. True
B. False
Course Evaluation
135. Indicate your professional
designation.
A. CPA
B. Public Accountant
C. Enrolled Agent
D. CMA
E. Other___________________
136. Indicate years professional experience in the course subject matter.
A. Less than 5
B. 5 to 10 years
C. 11 to 15 years
D. 16 to 20 years
E. 21 and over
137. Did the program meet your learning objectives?
A. Yes
B. No
138. Did the program materials contribute to the achievement of your learning objectives?
A. Yes
B. No
139. Did you find the program content relevant and timely?
A. Yes
B. No
140. Was the difficulty of the questions:
A. about right
B. too easy
C. too difficult
141. Was the indicated prerequisites (if any) for the program appropriate?
A. Yes
B. No
142. Do you plan to use additional courses from CPE Accounting & Tax Institute.
A. Yes
B. No
Copyright
© 2006 - 2008 By
CPE Accounting and Tax Institute