Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

1. Which of the following distributions from a qualified plan would not be subject to the 10 percent early withdrawal penalty, assuming the participant has

image text in transcribed
image text in transcribed
1. Which of the following distributions from a qualified plan would not be subject to the 10 percent early withdrawal penalty, assuming the participant has not attained age 59 y?? 1. A distribution made to a spouse under a qualified domestic relations Onder (QDRO). 2. A distribution from a qualified plan used to pay the private health insurance premiums of a current employee of Clinical Trials Company. 3. A distribution to pay for costs of higher education. 4. A distribution made immediately after separation from service at age 57. a. 1 and 2 . b. 1 and 3 . c. 1 and 4 . d. 2 and 3. 2. Viola, who is 75 years old, requested from the IRS a waiver of the 60 -day rollover requirement. She indicated that she provided written instructions to her financial advisor that she wanted to take a distribution from her IFA and roll it over into a new IRA. Her financial advisor inadvertently moved the funds into a taxable account. Viola did not make the request of the IRS until five years after the mistake was made. Will the IRS permit the wahver? a. No. The IRS never waives this requirement, except thder the most extreme of circumstances. b. Yes. The mistake was the fault of the financial advisor and the IRS regularly grants waivers in these circumstances. c. No. Viola waited beyond the one-year period for filing such a request. d. No. Viola waited an unreasonable amount of time before filing the request. 3. Owen turned 72 on November 1 of 2022 and must receive a minimum distribution from his qualified plan. The account balance had a value of 5437.989 at the end of 2021 . The distribution period for a 72 year old is 27.4, and for a 73 year old it is 26.5 under the Uniform Liferime Table effective for distribution years after 2021. If Owen taloes a $15,000 distribution on April 1, 2023, what is the amount of the minimum distribution tax penalty associated with his first year's distribution? a. $0. b. $230, c. $492. d. 5985 . 4. Laurd, age 43, has several retirement accounts and wants to know what accounts can be rolled over to other accounts. Which of the following statements regarding rollovers is not correct? a. She could take a distribution from her SEP IRA and roll it over to a qualified plan without incurring a 20% withholding. b. She could rollover her government 457 (b) plan to her new employer's qualified plan. c. She could rollover the funds from ber old employer's qualified plan to her new employer, who sponsors a 401(k) plan with a Roth account, and be able convert the funds in an inplan Roth rollover. d. She could rollover her traditional IRA to her designated Roth account in her 403 (b) plan. 5. In May 2022, Seth converts $100,000 in his traditional IRA to a Roth IRA. The value of the assets in the Roth IRA drops by 40 percent due to a significant decline in the stock market that occurs in October 2022. The Roth conversion results in Seth incurring $100,000 of taxable income, when he could have waited and converted only $60,000 (after the 40 percent drop). Which of the following statements is correct? a. Seth cannot recharacterize the conversion. b. Seth can recharacterize as long as it is done within six months from the date of the conversion. c. Seth can recharacterize after December 31, 2022. d. Seth can recharacterize at any time before the due date of his tax return, including extensions. \begin{tabular}{|} Additionalmultiplechoiceproblemsareavailableatmoney-education.combyaccessingtheStudentPracticePortal. \\ Access requires registration of the title using \\ the unique code at the front of the book. \end{tabular} 1. Which of the following distributions from a qualified plan would not be subject to the 10 percent early withdrawal penalty, assuming the participant has not attained age 59 y?? 1. A distribution made to a spouse under a qualified domestic relations Onder (QDRO). 2. A distribution from a qualified plan used to pay the private health insurance premiums of a current employee of Clinical Trials Company. 3. A distribution to pay for costs of higher education. 4. A distribution made immediately after separation from service at age 57. a. 1 and 2 . b. 1 and 3 . c. 1 and 4 . d. 2 and 3. 2. Viola, who is 75 years old, requested from the IRS a waiver of the 60 -day rollover requirement. She indicated that she provided written instructions to her financial advisor that she wanted to take a distribution from her IFA and roll it over into a new IRA. Her financial advisor inadvertently moved the funds into a taxable account. Viola did not make the request of the IRS until five years after the mistake was made. Will the IRS permit the wahver? a. No. The IRS never waives this requirement, except thder the most extreme of circumstances. b. Yes. The mistake was the fault of the financial advisor and the IRS regularly grants waivers in these circumstances. c. No. Viola waited beyond the one-year period for filing such a request. d. No. Viola waited an unreasonable amount of time before filing the request. 3. Owen turned 72 on November 1 of 2022 and must receive a minimum distribution from his qualified plan. The account balance had a value of 5437.989 at the end of 2021 . The distribution period for a 72 year old is 27.4, and for a 73 year old it is 26.5 under the Uniform Liferime Table effective for distribution years after 2021. If Owen taloes a $15,000 distribution on April 1, 2023, what is the amount of the minimum distribution tax penalty associated with his first year's distribution? a. $0. b. $230, c. $492. d. 5985 . 4. Laurd, age 43, has several retirement accounts and wants to know what accounts can be rolled over to other accounts. Which of the following statements regarding rollovers is not correct? a. She could take a distribution from her SEP IRA and roll it over to a qualified plan without incurring a 20% withholding. b. She could rollover her government 457 (b) plan to her new employer's qualified plan. c. She could rollover the funds from ber old employer's qualified plan to her new employer, who sponsors a 401(k) plan with a Roth account, and be able convert the funds in an inplan Roth rollover. d. She could rollover her traditional IRA to her designated Roth account in her 403 (b) plan. 5. In May 2022, Seth converts $100,000 in his traditional IRA to a Roth IRA. The value of the assets in the Roth IRA drops by 40 percent due to a significant decline in the stock market that occurs in October 2022. The Roth conversion results in Seth incurring $100,000 of taxable income, when he could have waited and converted only $60,000 (after the 40 percent drop). Which of the following statements is correct? a. Seth cannot recharacterize the conversion. b. Seth can recharacterize as long as it is done within six months from the date of the conversion. c. Seth can recharacterize after December 31, 2022. d. Seth can recharacterize at any time before the due date of his tax return, including extensions. \begin{tabular}{|} Additionalmultiplechoiceproblemsareavailableatmoney-education.combyaccessingtheStudentPracticePortal. \\ Access requires registration of the title using \\ the unique code at the front of the book. \end{tabular}

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Contemporary Auditing Real Issues And Cases

Authors: Michael C. Knapp, Loreen Knapp

4th Edition

0324048610, 9780324048612

More Books

Students also viewed these Accounting questions