Life Insurance chapter 7
which of the following scenarios will incur a 10% tax penalty on distributions?
Distributions are made on a policy before age 59 1/2
If a retirement plan or annuity is "qualified," this means
It is approved by the IRS
Who may contribute to a Keogh (HR-10) plan?
Self-employed plumber
Which of the following applicants would NOT qualify for a Keogh Plan?
Someone who works 400 hours per year
All of the following statements are true regarding tax-qualified annuities EXCEPT
Employer contributions are not tax deductible
All of the following would be different qualified and nonqualified retirement plans EXCEPT
Taxation on accumulation
A 403(b) plan, commonly referred to as a TSA, is available to be used by
Teachers and not-for-profit organizations
All of the following employees may use a 403(b) plan for their retirement EXCEPT
The CEO of a private corporation
A tax-shelter annuity is a special tax-favored retirement plan available to
Certain groups of employees only
Which of the following is TRUE of a qualified plan?
It has a tax benefit for both employer and employee
Which of the following is an IRS qualified retirement program for the self-employed?
Keogh
Which of the following statements concerning a Simplified Employee Pension plan (SEP) is INCORRECT?
SEPs are suitable for large companies
An IRA purchased by a small employer to cover employees is known as a
Simplified Employee Pension plan
Which of the following describes the tax advantage of a qualified retirement plan?
The earnings in the plan accumulate tax deferred
How are contributions to a tax-sheltered annuity treated with regards to taxation?
They are not included as income for the employee, but are taxable upon distribution
All of the following are general requirements of a qualified plan EXCEPT
The plan must provide an offset for social security benefits
SIMPLE Plans require all of the following EXCEPT
At least 1,000 employees
Employer contributions made to a qualified plan
Are subject to vesting requirements
All of the following would be eligible to establish a Keogh retirement plan EXCEPT
The president and employee of a family corporation
Two attorneys operate their practice as a partnership. They want to start a program through their practice that will provide retirement benefits for themselves and three employees. They would likely choose
HR-10 (Keogh Plan)
