Unit 1: Account Types

Question 1

Sole Proprietorship

Answer 1

1 Owner
Unlimited Liability
Easy to create/dissolve

Question 2

Partnership Account

Answer 2

2 or more owners
unlimited liability
partnership agreement required

Question 3

Corporate Account

Answer 3

Corp is owner (legal entity)
Limited liability
requires corp charter and resolution

Question 4

JTWROS (trades & checks)

Answer 4

trades: entered by either
checks issued to both

Question 5

UTMA/UGMA

Answer 5

minor is listed as party and owner
cannot open account or place trades

Question 6

Discretionary Authority granted through:

Answer 6

Written POA

Question 7

Full POA

Answer 7

Make withdrawals
Place trades

Question 8

Limited POA

Answer 8

Cannot withdrawal
Can place trades

Question 9

Once a customer dies, the rep will: (3 steps)

Answer 9

Cancel open orders
Freeze, mark deceased
Await for executors instructions

Question 10

IRA & Roth catch up age

Answer 10

50

Question 11

IRA allowed distributions age

Answer 11

59.5

Question 12

RMD age

Answer 12

73
not required for roth

Question 13

IRA Rollovers

Answer 13

60 days
20% tax withholding
10% penalty fo non rolled over funds

Question 14

Spousal Inherited IRA

Answer 14

Can add contributions
No distributions until 59.5
RMDs at 73

Question 15

Inherited IRA

Answer 15

10 year method: no RMDs but all funds distributed by Dec 31 of year 10

Question 16

ERISA Eligibility

Answer 16

21 years of age
1 year of service and: 1000 hrs full time or 500 hrs part time in past 3 years

Question 17

ERISA applies to which plans?

Answer 17

Private sector defined contribution and benefit plans

Question 18

Rollovers per year?

Answer 18

1