1) Which of the following statements does not apply to Coverdell education savings accounts?

A) Parents may make nondeductible contributions of up to $2,000 per child each year.

B) Contributions must be for a beneficiary under the age of 18.

C) Qualifying educational expenses include tuition, books, supplies, and room and board.

D) When the beneficiary reaches age 30, unused amounts are distributed to the parent who is taxed on any accumulated earnings.

E) All of the above apply to Coverdell education savings accounts.

2) Which of the following statements is true in regard to BOTH traditional IRAs and ROTH IRAs?

A) the contribution limit is determined by the age and earned income of the taxpayer

B) the contributions are deductible if the taxpayer is not an active participant in an employer-sponsored retirement plan

C) deductible contributions and earnings are taxed as ordinary income when withdrawn

D) they can be funded with "before tax" or "after tax" dollars

3) Which of the following payments would be taxable to the individual receiving them?

A) All payments received from accident and health insurance plans purchased by the taxpayer

B) Payments received for non-physical injury claims, including both compensatory payments and punitive damages

C) Payments for medical expenses from accident and health insurance plans purchased by the taxpayer's employer

D) Payments from a health insurance plan for anything other than medical expenses when the premiums are paid for by the employer

E) Compensatory payments connected to a physical injury or sickness claim (even those to cover lost wages)

F) Punitive damages awarded to physical injury or sickness lawsuits

G) All of these payments are taxable

4) A company's gross profit percentage is 30%. The company offers a 25% qualified employee discount to its key employees and a 15% discount to all other employees. If Kat, a key employee, and Trish, a non-key, non-highly paid employee, each purchase $100 worth of company goods, the amount Kat and Trish will include in gross income is:

A) $15 and $15, respectively.

B) $25 and $15, respectively.

C) $10 and $0, respectively.

D) $10 and $10, respectively.

E) $25 and $0, respectively.

F) $0 and $0, respectively

5) Roger and Joan (both age 55) are married and file a joint return; each has a traditional IRA. Roger works full-time and has modified AGI of $170,000. His employer does not offer a qualified retirement plan. Joan is not employed. If they wish to contribute the maximum to their respective IRAs, how much of their contribution is deductible?

A) $6,500 (Roger only)

B) $13,000 ($6,500 each)

C) $13,000 (Roger only)

D) $11,000 ($5,500 each)

E) $0 (AGI too high)

F) $6,500 (Joan only)