captar 3

when funds are shifted straight from one IRA anothe IRA what percentage of the tax is withheld,

10% 20% 30% none none there is no tax withheld on an IRA transfer

All of the following statements about traditional individual retirement accounts are false EXCEPT (1) 10% penalty is applies to withdrawals after age 59 1/2 (2) withdrawals are normally tax. free to the recipent (3) 10% penalty is applied to withdrawals before age 59 1/2

10% penalty is applied to withdrawals before age 59 1/2

A retirement plab that sets aside part of the company net income for distibutions to qualified employess is called a (1) rollover plan *(2) 403 plan (3) profit sharing plan (4) salary lreduction plan

profit sharring plan ..profit sharing plan set aside a portion of the company net income for distributions to qualified employess

An individual participant personally received eligible rollover funds from a profit sharing paln, what is the income tax withholding requirement for this transaction (1)10% is withheld for income taxes (2) 20% is withheld for imcome taxes (3) 30% is withheld for incomes taxes (4) nothing is withheld

20%

what is the maximum number of employess (earing at least $5<OOO )that an employes can have in order to start a SIMPLE retirement plan

25 50 100 250 100 A employer can have a maximu, of 100 employees earning at least 5.000 to be elgible for a simple retirement plan

How long does an individual have to rollover funds from an IRA or fualified plan

60days 90days 120day no limit 60days in IRA and qualified plans. the time limit for rollover funds is 60 days or the funds could be subjected to income taxes and a penalty tax.

A sole propritor may use this plan ONLY if the employees of this business are included (1) SEP Plan (2) Keogh pension plan (3) individual Retirement (IRA) (4) SIMPLE PLAN

Keogh pension plan.A keogh plan may be used by a sole proprietor only if the employees of the business are included

which of the following is True about a qualified retirement thin at is "top heavy"(1)More than 30% of plan assets are in key employee accounts (2) More than 40% of annual additions are for key employee accounts (3)More than 50% of plan assets are in key employee accounts (4) more than 60% of plan assets are in key employee accounts

Mre than 60% of plan assets are in key employee accounts

what does a 401(k) plan generally proide its participants (1) Tax free distributions (2) salary deferral distributions (3) salary deferral contributions (4) A defined retirement benefit

salary deferral contributions

Which product would best serve a retired individual looking to invest a lump sum of money through an insurance company

variabelf life interest sensitive life unversal life Aunnuity Aunnuty in this situation an annuity would be recommended

No deduction allowed $2.5oo $2.000 $1.000

$25.000

Rick recently died and left behind an individual IRA in his name name. . His widow was forwarded the balane of the IRA . The widow qualifies for the.

(1)marital deduction (2) death benefits (3) section 1035 exchange (4) capital gains tax rate incorrect The correct answer is :marital deduction: The transfer of a decedents IRA account balance to a surviing spouse qualifiers for the unlimited Marital Deduction . which generally exempts the transfer from estate taxes

Premature IRA distritutions are assessed a panalty TAX of

0% 10% 15% 20% 10% premature distributions from an IRA are subject top 105 PENALTY TAX

which tax would an IRA participant be subjedted to on distributions received prior to age 59 1/2? (1)10%tax penealty for early withdrawal (2)capital gains tax (3) ordinary incomes tax and a 10% tax penalty for early withdrawal (4) ordinary income

Ordinary incomes tax and a 10% tax penalty for early wthdrawal 'income tax and a penalty tax are generally assessed when a participant receives retirement savings from an IRA before reaching age 59 1/2

Post tax dollar contributions are found in. (1) 401k investments (2) Traditional IRA investments (3) SIMPLE investments (4) Roth IRA investments

Roth IRA investments..No income tax dedutions can be taken for contributions made to a Roth.but the earnings on those contributions are entirely tax free whern they are withdrawn/

Which of the following is TRUE if the owner of an IRA name their spouse as beneficiary , but then dies before any distributions are made. (1) Surrender charge is applied (2) Distributions will be received tax-free if surviving spouse is over age 59 1/2 (3) The account can be rolloed into the surviving spoouses IRA

The account can be rolled into the surviving spouse IRA A surviving spouse who inherits IRA benefits or benefits from the deceased spouse qualiffied ppan is elegibel to establish a rollover IRA in the surviving spouse own name

In a qualified retirement plan, the yearly contributions to an employees account

are not tax.deductible are restricted to minimum levels set by the IRA (3)are restricteed to maximum levels set by the IRA(4)must be matched dollar.for dollar by the employer ANSWER are restricted to maximum levels set by the IRA.Annual limits to an employees qualified retirement plan are based on maximum limits set by the IRA

Tom has a qualified retirement plan with his employes that is currently considered to be 80% "vested} .How can this be interpreted?

incorred. THe correct answer is "if Toms employment is terminated. 20%of the funds would be forfeited" in this situation..80% "vested" means that 20% of the funds could be forfeited it Toms employment is terminated.

A trustee to trustee trans of rollover funds in a qualified plan allows a participant to aviod

mandatory income tax withholding on the (2)transfer amont paying transfer fees (3)paying trustees trustee fees (4)ever paying income taxes on the distributions. Answe mandatory income tax withholding on the franser amount. there is no federal tax withholding involved in a transfer of funds from one qualified plan into another. Rollovers,. however. invloved a 20% withholding once the rollover takes plalce to the new custodain,the remainder of the distribution is made.

In an individual retirement account (IRA) rollover contributions are (1)subject to capital games tax (2) subject to ordiary income tax (3) partially limited by dollar amount (4) not limited by dollar amount

not limited by dollar amount...Rollover contributions to an individual retirement annuity(IRA) are not limited by dollar

A qualified profit sharing plan is designed to (1) allow key employees to participate in the profits of the company (2)allow employees to participate in the profits of the company

allow employees to participate in the profits of the compoany.one of the purposes of a qualified profit sharing plan is to distribute a portion of compay earnings to employees

At the age of 45,an individual withdraws $50.000 from his Qualified Profit-sharing plan and then deposits this amount into a personal savings account. this action would result in (1) only income tax on the amount withdrawn (2) incomes tax and a 10% penalty asserssed upon funds withdrawn from the qualified plan (3) contines tax free accumulations in the banks savings account (4) only a 10% penalty on the withdrawal of funds

incomes tax and a 10% penalty assessed upon funds withdrawn from the qualified plan.. the IRA says that withdrawals of funds from a profit sharing plan may be subject to a 10 perent tax penalty in addition to income taxes if they are made before the age of 59 1/2 This same early withdrawal penalty applees to funds taken out of 401k plans and traditional individual retirement accounts

An employer that offers a qualified retirement plan to its employees is eligible to (1) avoid ERISA regulations (2) make tax deductible contributions to the plan (3) make tax deducitible contributions to key employess only (4) make paritial tax deductible contributions to the plan

make tax deductible contributions to the plan The advantage gained by providing a qualified retirement paln is the empluers contributions to the plan are tax deductible