Retirement Planning Flashcards
For NQSOs, the option is (is/is not)taxed at the grant if the exercise price is equal to or greater than the fair market value of the stock.
Is not taxed.
____’s are subject to payroll tax where as ___’s are not.
NQSOs= payroll tax. ISOs= no payroll tax.
The maximum retirement benefit a participant in a _____ benefit plan can actually receive depends on the value of the participant’s account at retirement.
Target-benefit plan.
A negative election clause can assist a 401(k) plan in meeting the ___ test because it automatically deems that an employee defers a specific amount unless he elects out of the automatic deferral amount.
ADP Test.
Minimum funding is not determined by an actuary in a _____ _____ plan, but as a percent of covered compensation.
Money Purchase Pension Plan.
An actuary establishes the required funding for a defined benefit pension plan by determining the amount of annual contributions needed to fund _____ _____ _____ for the participants at retirement.
Single Life Annuities.
If a Profit Sharing Plan is Top Heavy, the plan must provide a benefit to all non-key employees of at least __%.
3%.
The required reduction to the Section 415 limits for top-heavy defined contributions plans can be avoided by providing a minimum employer contribution to all non-highly compensated employees equal to what percentage of each non-key employee’s compensation?
3%.
If an employer with a top heavy plan wants to avoid the required reduction based on Section 415 limits, he or she must contribute at least ___% of each non-key employee’s compensation to the plan.
3%.
An employee, age 55 or older, who has completed 10 years of participation in an ESOP may require that __% of the account balance be diversified.
25%.
Which of the following represents the LEAST favorable means of securing long-term care coverage?
A. Continuing Care Retirement Communities.
B. Disability Income Policy Rider.
C. Association Arrangements.
D. Life Insurance Policy Rider.
The correct answer is D.
Life Insurance Policy Rider.
Continuing Care Retirement communities are structured specifically for Long-Term Care (LTC) coverage, as are the individual policies. Association arrangements are also LTC specific. These three all provide excellent means to obtain LTC coverage. The disability income policy rider takes a coverage that can no longer be carried after age 65 and converts it to useful LTC coverage, another excellent plan. The least favorable is to have diminished coverage that one will most definitely need at some point - life insurance.
The cost basis of surviving shareholders (does/does not) increase in an “entity” or stock redemption buy-sell agreement.
Does not.
The cost basis of surviving shareholders (does/does not) increase in a buy-sell cross-purchase agreement.
Does, in part.
Assuming an asset is sold for a gain, Section _____ ordinary income would occur when real property subject to ACRS and accelerated depreciation was used.
Section 1250.
Dues to business-related organizations provided as a fringe benefit are ______ from the taxable income of all covered employees.
Excludable.
Dues and licenses are excluded from taxable income if directly related to the employee’s job.
