Retirement Flashcards
Mary has an early withdrawal from her 401(k). If she changes her mind within 60 days, which of the following plans can she use to make a qualified rollover contribution? • Traditional IRA • Qualified annuity • SEP IRA • All of the above
All of the above
qualified retirement plan includes: •A qualified pension, profit-sharing, or stock bonus plan (including 401 (k) plan)
•Tax-sheltered annuity contract
•Qualified annuity plan
Note that modified endowment contracts are not qualified retirement plans, they are life insurance contracts.
Which of the following is NOT a qualified retirement plan?
• A qualified pension, profit-sharing, or stock bonus plan
• Modified endowment contracts
• 401(k)
• A tax-sheltered annuity contract
Modified endowment contracts
Juan, a single man, retired under a qualified employee plan in 2018. He will reach age 70 1/2 on August 20, 2019. By what date must Juan receive his first required minimum distribution? • December 31, 2018 • April 1, 2019 • April 1, 2020 • December 31, 2019
April 1, 2020
To make sure that most of your retirement benefits are paid to you during your lifetime, rather than to your beneficiaries after your death, the payments that you receive from qualified retirement plans must begin no later than April 1 of the year that follows the later of: •The calendar year in which you reach age 70 1/2, or
•The calendar year in which you retire from employment with the employer maintaining the plan.
Which of the following is a true statement regarding a rollover distribution from a qualified plan to a traditional IRA?
• To be an eligible rollover, you must rollover the entire distribution from the qualified plan.
• You can deduct the distribution rolled over, up to the amount of the allowable deductible contribution limit for the year.
• If you chose the direct rollover option, the payer must generally withhold 20% of it for income tax.
• A hardship distribution from a qualified plan is not an eligible rollover distribution.
•
A hardship distribution from a qualified plan is not an eligible rollover distribution.
retirement plan. The IRS will consider any part of the amount not rolled into the new plan within 60 days a distribution. If the participant chooses to have the plan pay an amount directly to an IRA or another eligible retirement plan (a direct rollover), no withholding is required. Rollover distributions are not deductible co bon he onlyntributions to an Individual Retirement Account
- Ivan is age 72. The balance at the beginning of the year of his traditional IRA was $41,000. All of his IRA contributions had been tax deductible. The required minimum distribution for the year was $3,000. If Ivan only took a distribution of $1,000, what is the amount of excise tax that Ivan would have to pay on the excess accumulation?
- $120
- $200
- $1,000
- $2,400
1000
Evans required distribution was $3000 but he only took out $1000, He is subject to 50% Penalty.
Generally, you must begin receiving distributions from your traditional IRA no later than which of the following dates?
• Six months after your 70th birthday.
• December 31st of the year in which you reach age 70.5.
• April 1st of the year in which you reach age 70.5.
• April 1st of the year following the year in which you reach age 70.5.
April 1st of the year following the year in which you reach age 70.
Distributions from qualified retirement plans must begin no later than:
•
• April 1 of the year that follows the calendar year in which you reach age 70 1/2
• April 1 of the year that follows the calendar year in which you retire from employment with the employer maintaining the plan
• January 1 of the year that follows the calendar year in which you reach age 70 1/2
• April 1 of the year that follows the later of the calendar year in which you retire from employment with the employer maintaining the plan, or you reach age 70 1/2.
April 1 of the year that follows the later of the calendar year in which you retire from employment with the employer maintaining the plan, or you reach age 70 1/2.
Under the RMD rules, the required beginning date is generally April 1, following the year a taxpayer turns 70 1/2. This is true for all plans (e.g., IRA, 401(k), etc.). There is an exception for individuals covered by a qualified plan who still work for that employer. A taxpayer under those circumstances must begin taking distributions no later than April 1 of the year that follows the later of:
• The calendar year in which you reach age 70 1/2, or
• The calendar year in which you retire from employment with the employer maintaining the plan.
NOTE: This is only for the qualified plan, as distributions from the taxpayer’s IRA accounts must begin by April 1,
Phil retired from Mudskippers, Inc in 2016. On September 25, 2016, Phil reached age 70 1/2. Phil's first required minimum distribution of $5,000 from his Mudskippers, Inc 401K plan was not made until April 1, 2018. How much tax on excess accumulation must Phil pay related to his first distribution? • $-0- • $2,500 • $500 • $300
$2500
- On January 1, 2016 Calvin’s traditional IRA had a basis of $2,000. During 2017, his IRA experienced a loss of $300. If Calvin receives distributions of the remaining balance of $1,700 during 2017, how much of a loss can he claim on his individual tax return and where on the return is it claimed?
- $-0-,You cannot claim a loss on an IRA account.
- $300 loss, deductible on schedule D
- $300 loss, deductible on Form 4797
- $300 loss, deductible as a miscellaneous itemized deduction subject to the 2% limit.
300 loss, deductible as a miscellaneous itemized deduction subject to the 2% limit.
Generally, if a distribution is made to an employee under the retirement plan before he or she reaches age 59.5, the employee may have to pay a 10% additional tax on the distribution. Which of the following distributions is NOT an exception to this rule?mala
• Distributions made to a beneficiary (or to the estate of the employee) on or after the death of the employee.
• A series of substantially equal periodic payments beginning after separation from service and made at least annually for the life or life expectancy of the employee.
• Distributions made to an employee after separation from service if the separation occurred before the calendar year in which the employee reached age 55.
• Distributions made to an alternate payee under a Qualified Domestic Relations Order (QDRO).
Distributions made to an employee after separation from service if the separation occurred before the calendar year in which the employee reached age 55.
correct answer to this question is the one that is not an exception to the rule. Distributions made to an employee after separation from service are not subject to an early distribution penalty if the separation occurred during or after the calendar year in which the employee reached age 55.
Teresa receives distributions from IRA in the form of series of substantially equal periodic payments.
Which of the following is true
She has to pay 10% penalty on the early withdraw from her IRA acct
She should not report distributions because it was already taxed before it went into her IRa Acct
She does not have to pay the 10% penalty on early withdraw for her IRA acct
She should file form 5099 to report income from Distributions
She does not have to pay the 10% penalty on early withdraw for her IRA acct
With regard to required distribution from a qualifified retirement plan, A taxpayer must do which of the following by required date, APril 1 of the year after they reach 70 1/2
Rollover the entire balance in the plan
Distribute the entire balance in the plan
Begin receiving periodic distributions in annual amounts calculated to distribute the entire balance over the life exp of the taxyaper
Distribute the entire balance in the plan, or begin receiving distributions in annual amounts calclulated to distribute the entire balance over the life expectancy of the taxpayer
Distribute the entire balance in the plan, or begin receiving distributions in annual amounts calclulated to distribute the entire balance over the life expectancy of the taxpayer
