Swction 10 - Retirement Plans Flashcards
A 55 year old recently received a $30,000 distribution from a previous employers 401(k) plan, -$6000 for income tax withholding. Which federal taxes apply if none of the funds were rolled over?
Income taxes plus a 10% penalty tax on $30,000
Which of these statements about traditional individual retirement accounts is accurate?
-10% penalty is applied to withdrawals prior to age 59.5
-Withdrawals are normally tax-free to the recipient
-10% penalty is applied to withdrawals prior to 59.5
-Contributions are not tax deductible
10% penalty is applied to withdrawals prior to age 59.5
Tom has a qualified retirement plan with his employer that is currently considered to be 80% vested. How can this be interpreted?
If Tom’s employment is terminated, 20% of the funds could be forfeited
An individual working part-time has a gross income of $5000 for the year. If this individual has an IRA, what is the maximum deductible, IRA contribution allowable?
$5000
In an individual retirement account, IRA, rollover contributions are
Not limited by Dollar amount
What is the excise tax rate the IRS imposes on individuals aged 70.5 or older who do not take the required minimum distributions from their qualified retirement plan?
50%
An officer for a corporation takes out numerous unsecured loans from the company’s qualified retirement plan. Which of these rules is the plan in violation of?
Exclusive benefit rule
Rick recently died and left behind an individual IRA account in his name. His widow was forwarded the balance of the IRA. The transfer of ricks IRA account balance to his surviving spouse qualifies for…
The marital deduction
What is another name for a Keogh plan?
HR 10 plan
What is the maximum number of employees (earning at least $5000) that an employer can have in order to start a SIMPLE retirement plan?
100 employees
The time limit an individual has to “rollover” funds from an IRA or qualified plan is
60 days
The IRS has a minimum coverage rule regarding qualified retirement plans. This rule states that each qualified plan is required to.
Benefit a broad cross-section of employees 
XYZ Corp. has implemented a qualified retirement plan. This plan may not discriminate.
In favor of highly compensated employees 
Which of the following situations would allow funds to be deposited into a rollover IRA?
An employee quits her job and receives $50,000 from her qualified plan
How are qualified Roth IRA distributions normally treated for tax purposes?
Received income tax free
