IRA Opening & Required Documents

Question 1

What documents are required by the IRS to establish a Traditional IRA?

Answer 1

Plan agreement, Disclosure statement, & Financial disclosure (PDF)

Question 2

Which document serves as the Traditional IRA contract?

Answer 2

Plan agreement

Question 3

Which document states the rules, terms, and conditions of the Traditional IRA in nontechnical language?

Answer 3

Disclosure statement

Question 4

Which document reflects the potential growth of the Traditional IRA investment?

Answer 4

Financial disclosure

Question 5

List the additional forms you may want to have the Traditional IRA owner complete.
a. Forms required by your organization’s Customer Identification Program
b. Beneficiary designation form
c. Contribution form, if not included on the application
d. All of the above

Answer 5

• Forms required by your organization’s Customer Identification Program
• Beneficiary designation form
• Contribution form, if not included on the application

Question 6

Financial organizations generally must amend all of the following IRA documents when laws affecting IRAs change EXCEPT the

Answer 6

financial disclosure

Question 7

Financial organizations generally must amend for?
a. internal amendments, forms vendor changes, mergers, and prospective law changes.
b. mergers, acquisitions, internal amendments, law changes, and forms vendor changes.
c. prospective law changes, acquisitions, IRS amendments, and forms vendor changes.
d. IRS amendments, mergers, law changes, acquisitions, and forms vendor changes.

Answer 7

IRS amendments, mergers, law changes, acquisitions, and forms vendor changes. (AMLAF)

Question 8

Which of the following is NOT an financial disclosure assumption when the investment growth can be predicted?
a. The account’s projected value includes any withdrawal fees the financial organization could assess.
b. A $1,000 one-time contribution is assumed for a rollover deposit.
c. The IRA owner withdraws the balance at the end of the first five years and at age 60, 65, and 70.
d. An annual $2,000 contribution is assumed for a regular contribution.

Answer 8

d. An annual $2,000 contribution is assumed for a regular contribution.

Question 9

What is the penalty for failure to amend IRA documents?

Answer 9

$50 per document

Question 10

IRA owners must receive a copy of any amendments within 30 days after

Answer 10

the later of the date on which the amendment is adopted or the date on which the amendment becomes effective.

Question 11

What is a catch-all amendment?

Answer 11

A catch-all amendment is a guaranteed way to make up for past amendment failures and avoid IRS penalties.

Question 12

A master file should contain

Answer 12

a dated cover letter, a copy of the amendment, and a list of mailing recipients.

Question 13

A primary beneficiary inherits the assets in an IRA when

Answer 13

the IRA owner dies.

Question 14

A contingent beneficiary inherits the assets in an IRA when

Answer 14

the IRA owner dies and all of the primary beneficiaries died before the IRA owner.

Question 15

Community property is

Answer 15

property acquired by either party during the marriage, owned by both parties.

Question 16

If community or marital property laws apply, when an IRA owner signs the opening documents she should

Answer 16

obtain spousal consent when naming someone other than or in addition to her spouse as beneficiary.

Question 17

The statement “The grantor (depositor) agrees to provide the trustee (custodian) with all information necessary to prepare any reports” is found in which Article of the Traditional IRA model documents?

Answer 17

Article V (5)
1-C contributions
2-N nonforfeitable
3-R restrictions
4-D distributions
5-R reporting
6-C controlling articles
7-A amendments
8-A additional provisions

Question 18

The statement “The grantor (depositor) agrees to provide the trustee (custodian) with all information necessary to prepare any reports” is found in which Article of the Roth IRA model documents?

Answer 18

Article VI (6)
1-C contributions
2-MAGI
3-N nonforfeitable
4-R restrictions
5-D distributions
6-R reporting
7-C controlling articles
8-A amendments
9-A additional provisions

Question 19

The statement “…may be used for any additional provisions” is found in which Article of the Traditional IRA model documents?

Answer 19

Article VIII (8)
1-C contributions
2-N nonforfeitable
3-R restrictions
4-D distributions
5-R reporting
6-C controlling articles
7-A amendments
8-A additional provisions

Question 20

The statement “…may be used for any additional provisions” is found in which Article of the Roth IRA model documents?

Answer 20

Article IX (9)
1-C contributions
2-MAGI
3-N nonforfeitable
4-R restrictions
5-D distributions
6-R reporting
7-C controlling articles
8-A amendments
9-A additional provisions

Question 21

The statement “the provisions of Articles I through III and this sentence will be controlling” is found in which Article of the Traditional IRA model documents?

Answer 21

Article VI (6)
1-C contributions
2-N nonforfeitable
3-R restrictions
4-D distributions
5-R reporting
6-C controlling articles
7-A amendments
8-A additional provisions

Question 22

The statement “the provisions of Articles I through IV and this sentence will be controlling” is found in which Article of the Roth IRA model documents?

Answer 22

Article VII (7)
1-C contributions
2-MAGI
3-N nonforfeitable
4-R restrictions
5-D distributions
6-R reporting
7-C controlling articles
8-A amendments
9-A additional provisions

Question 23

The statement “No part of the trust (custodial) account funds maybe invested in collectibles (within the meaning of section 408(m))”is found in which Article of the Traditional IRA model documents?

Answer 23

Article III (3)
1-C contributions
2-N nonforfeitable
3-R restrictions
4-D distributions
5-R reporting
6-C controlling articles
7-A amendments
8-A additional provisions

Question 24

The statement “No part of the trust (custodial) account funds maybe invested in collectibles (within the meaning of section 408(m))”is found in which Article of the Roth IRA model documents?

Answer 24

Article IV (4)
1-C contributions
2-MAGI
3-N nonforfeitable
4-R restrictions
5-D distributions
6-R reporting
7-C controlling articles
8-A amendments
9-A additional provisions

Question 25

The statement “The grantor’s (depositor’s) interest in the balance in the trust account is nonforfeitable.” is found in which Article of the Traditional IRA model documents?

Answer 25

Article II (2)
1-C contributions
2-N nonforfeitable
3-R restrictions
4-D distributions
5-R reporting
6-C controlling articles
7-A amendments
8-A additional provisions

Question 26

The statement “The grantor’s (depositor’s) interest in the balance in the trust account is nonforfeitable.” is found in which Article of the Roth IRA model documents?

Answer 26

Article III (3)
1-C contributions
2-MAGI
3-N nonforfeitable
4-R restrictions
5-D distributions
6-R reporting
7-C controlling articles
8-A amendments
9-A additional provisions

Question 27

The statement “This agreement will be amended as necessary to comply with the provisions of the Code” is found in which Article of the Traditional IRA model documents?

Answer 27

Article VII (7)
1-C contributions
2-N nonforfeitable
3-R restrictions
4-D distributions
5-R reporting
6-C controlling articles
7-A amendments
8-A additional provisions

Question 28

The statement “This agreement will be amended as necessary to comply with the provisions of the Code” is found in Article of the Roth IRA model documents?

Answer 28

Article VIII (8)
1-C contributions
2-MAGI
3-N nonforfeitable
4-R restrictions
5-D distributions
6-R reporting
7-C controlling articles
8-A amendments
9-A additional provisions

Question 29

The statement “The grantor’s (depositor’s) entire interest in the trust (custodial) account must be, or begin to be, distributed not later than the grantor’s (depositor’s) required beginning date, April1 following the calendar year in which the grantor (depositor)reaches age 70½.” is found in which Article of the Traditional IRA model documents?

Answer 29

Article IV (4)
1-C contributions
2-N nonforfeitable
3-R restrictions
4-D distributions
5-R reporting
6-C controlling articles
7-A amendments
8-A additional provisions

Question 30

The statement “…the annual contribution is phased out between adjusted gross income (AGI) of…” is found in which Article of the Roth IRA model documents?

Answer 30

Article II (2)
1-C contributions
2-MAGI
3-N nonforfeitable
4-R restrictions
5-D distributions
6-R reporting
7-C controlling articles
8-A amendments
9-A additional provisions

Question 31

The statement “If the grantor’s (depositor’s) surviving spouse is the designated beneficiary, such spouse will then be treated as the grantor (depositor).” is found in which Article of the Roth IRA model documents?

Answer 31

Article V (5)
1-C contributions
2-MAGI
3-N nonforfeitable
4-R restrictions
5-D distributions
6-R reporting
7-C controlling articles
8-A amendments
9-A additional provisions

Question 32

When does the revocation period start on a new IRA?

Answer 32

Upon receipt of the IRA disclosure statement

Question 33

Which Article for Traditional IRAs states for the given year, financial organizations may not accept more than the applicable individual limit as an annual contribution.

Answer 33

Article I (1)
1-C contributions
2-N nonforfeitable
3-R restrictions
4-D distributions
5-R reporting
6-C controlling articles
7-A amendments
8-A additional provisions

Question 34

Which Article for Roth IRAs states for the given year, financial organizations may not accept more than the applicable individual limit as an annual contribution.

Answer 34

Article I (1)
1-C contributions
2-MAGI
3-N nonforfeitable
4-R restrictions
5-D distributions
6-R reporting
7-C controlling articles
8-A amendments
9-A additional provisions