Chapter 5: IRAs

Question 1

What is the contribution max for a traditional IRA?

5.1

Answer 1

$6k + $1k catchup

Question 2

How are traditional IRAs taxed?

Answer 2

Earnings are deferred

Distributions taxed as ordinary income

Question 3

What are prohibited transactions with an IRA?

Answer 3

Borrowing money

Selling property to an IRA

Question 4

What investments are allowed in a traditional IRA?

Answer 4

Not collectibles (except for some fed bullion coins)
Can’t invest notes to yourself
Can’t invest life insurance policies (annuities are ok)
Can’t be invested in S Corps

Question 5

How many rollovers are allowed each year?

Answer 5

only 1. (but transfers are unlimited)

Question 6

What is a stretch IRA?

Answer 6

You inherited account but you aren’t taking the money immediatly. Trying to take it out in a tax smart way. Must be distributed within 10 years.

Question 7

What is the aggregation rule?

Answer 7

In the IRS point of view, all of your IRA accounts are combined.

Question 8

When is an IRA withdrawal subject to a 10% penalty?

Answer 8

“4D IRS childs meal at home 59.5”

Death
Disability
Divorce
Disaster

Insurance: health insurance premiums when unemployed
Reseervost ),o;otaru_
Substaintially equal periodic payments

Medical expenses over 10% of AGI
Education
Annuitized payments
Levy by IRS
Home: qualified home buyer

59.6

Question 9

What is the penalty for over contributing to an IRA?

Answer 9

6%

Question 10

What is the required beginning date for RMDs?

Answer 10

April 1 of the year following the year in which the account holder turns 72