9. Which of the following statements concerning Roth IRAs iscorrect? a. in the event of distributions from
Question:
9. Which of the following statements concerning Roth IRAs iscorrect?
a. in the event of distributions from a Roth IRA, the earningsare deemed withdraw first.
b. A distribution from a Roth IRA must include both earnings andcontributions
c. if the entire Roth IRA is distributed within 5r years to buya car, only the earnings are subject to income tax, but the entireamount may be subject to penalty.
d. if distributions are made within 5 years of conversion from atraditional IRA, the conversion assets are subject to the 10%penalty, but not income tax.
10. Which of the following investments is permitted with an IRAor Roth IRA?
1) U.S. eagle gold coins
2) IBM Stock bought on margin
3) Universal variable life insurance contract.
A. 1 only
B. 1 and 2 only
C. 1 and 3 only
D. 2 and 3 only
11. In 2018, Craig Foster is 42 years of age and a participantin the 401(k) plan at his company. His gross income from hisemployment is $114000 and after salary deferral, his AGI is$111000. Craigs wife is 36 years of age and has not worked sincethe arrival of their first child. What is the maximum deduction thefosters could take for contribution to an IRA?
a. $0
b. $5500
c. $8250
D $11000
19. All the following statements concerning SEPs are correct,except:
A. SEPs can be advantageous to employers who have high employeeturnover.
B. SEPs have no minimum contribution requirements.
C. SEPs are available to both self-employed individuals andemployees of corporations.
D. like defines contribution plans, SEPs must be installed beforethe end of the tax year.
20. Which of the following statements concerning simplifiedemployee pension (SEP) plan is correct?
1) The annual limitation on contributions, 25 percent ofcompensation, may not be applied separately to compensation frommore than one employer.
2) Part-time employees who have earned over $600 annually in 3 ofthe last 5 years must be covered by the plan.
3) The employer can deny participant withdrawal rights until thetermination of employment.
A. 1 only
B. 2 only
C. 1 and 3 only
D. 2 and 3 only
E. 1, 2 and 3 only
Income Tax Fundamentals 2015
ISBN: 9781305177772
33rd Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven Gill