1.Which of the following persons could make tax-deductible contributions to a traditional IRA regardless of their modified adjusted gross income (MAGI)?

I.A person who participates in a SEP IRA

II. A person who participates in a Section 457 plan

III. A person who participates in a Section 401(k) plan

IV. A person who participates in a Section 403(b) plan

A.II only

B.II and IV

C.II and III

D. I and III

2.Which of the following statements regarding Roth IRAs and pre-tax 401(k) plans is (are) CORRECT?

I. Roth IRAs require distributions no later than age 70 while the participant is living.

II. There is not an income limitation to participate in a pre-tax 401(k) plan or Roth IRA.

A. II only

B.I only

C.Neither I nor II

D.Both I and II

3.Which of the following retirement plans generally permit in-service withdrawals at any age?

I.Money purchase pension plan

II.Profit-sharing plan

III. Section 401(k) plan

IV.SEP plan

A.I, II, III, and IV

B.II, III, and IV

C.I, II, and IV

D.II, III, and IV

4.When she retired at age 64, Lauren received a lump-sum distribution from her employer's stock bonus plan. The fair market value of the employer stock contributed to her account was $200,000 at the time of contribution. At the time of the distribution, the employer stock in Lauren's account had a fair market value of $300,000. Six months later, Lauren sold the stock for $310,000. Which of the following statements regarding the sale of Lauren's stock is(are) CORRECT?

I.The $300,000 distribution is taxed at the long-term capital gain rate.

II.Lauren has a $10,000 short-term capital gain when the stock is sold.

III.There was no income tax liability incurred when the stock was contributed to the plan.

IV.The net unrealized appreciation (NUA) on the stock is $100,000.

A.I, II, III, and IV

B.I and II

C.II, III, and IV

D.IV only

5.Blake, age 72, is required to take substantial required minimum distributions (RMDs) from his qualified retirement plan. He has no current need for the income and wants to decrease the amount of the distributions without incurring a penalty. Blake is not interested in a lump-sum distribution from the plan at this time. Which of the following statements regarding Blake's options is CORRECT?

I.Blake may take a distribution in addition to his RMD from his qualified plan and convert the additional distribution to a Roth IRA within 60 days.

II.Blake cannot roll over retirement plan proceeds to a traditional IRA after age 70.

A.I only

B.II only

C.Neither I nor II

D.Both I and II

6.Required minimum distributions from a traditional IRA must begin no later than

A.December 31 of the year following the IRA owner's attainment of age 70

B.the year in which the IRA owner attains age 70

C.age 59

D.April 1 of the year following the year in which the IRA owner attains age 70

7.Which of the following qualified plan distributions is subject to the 10% penalty for early withdrawal?

A.An in-service hardship distribution from a Section 401(k) plan to an employee- participant, age 55

B.A lump-sum benefit payable to a disabled employee-participant, age 57

C.A death benefit payable to a beneficiary upon the death of an employee, age 52

D.A lump-sum distribution made to an employee-participant, age 63, from a profit- sharing plan after the funds have been in the plan for two years

8.Henry works for an accounting firm that sponsors a Section 401(k) plan. Henry, who has a current salary of $35,000, was hesitant to contribute to the plan because in the past he felt as though he may need the money before retirement. At a recent employer-sponsored seminar, Henry learned that he could receive a loan from his Section 401(k) plan without paying any income tax. Henry is now considering making pre-tax elective deferrals to the Section 401(k) plan, but he wants to know more specific details regarding loan provisions. Which of the following statements regarding nonpenalized loans from qualified plans is (are) CORRECT?

I.The limit on loans is generally one-half of the participant's vested account balance not to exceed $50,000.

II.The limit on the term of any loan is generally five years.

III.If an employee leaves the company, a retirement plan loan may be rolled over to an IRA and the participant may continue making the loan payments as planned.

IV.Loans to a 100% owner-employee are permissible.

A. I only

B.I, II, III, and IV

C.II only

D. I, II, and IV

9.Which of the following describe differences between a tax-advantaged retirement plan and a qualified plan?

I.IRA-funded employer-sponsored tax-advantaged plans may not incorporate loan provisions.

II.Employer stock distributions from a tax-advantaged plan do not benefit from net unrealized appreciation (NUA) tax treatment.

A.I only

B.II only

C.Both I and II

D.Neither I nor II

10.Which of the following persons could make tax-deductible contributions to a traditional IRA regardless of their modified adjusted gross income (MAGI)?

A.Gary is self-employed and contributes the maximum to a SEP IRA plan he has for himself and his employees

B.Sara works for a Section 501(c)(3) tax-exempt organization, and she participates in the Section 403(b) plan her employer sponsors

C.Janice, a single taxpayer earning $110,000 per year, defers $19,500 to her employer's Section 401(k) plan

D.Max is 55, employed full time and participates in his employer's Section 457 plan

11.The premature distribution penalty does not apply to which of the following IRA distributions?

I.A distribution made after the owner is age 55 and after separation from service with his employer

II.A distribution made for the purpose of paying qualified higher education costs

III.A distribution paid to a beneficiary after the death of the IRA owner who had not begun receiving minimum distributions

A.I and II

B.I only

C.II only

D.II and III

12.Which of the following statements regarding the characteristics or use of a Roth IRA is CORRECT?

A.As with traditional IRAs, Roth IRA contributions may not be made after the participant reaches age 70

B.Roth IRA withdrawals are tax free in their entirety regardless of the participant's age at withdrawal

C.As with traditional IRAs, Roth contribution eligibility is restricted by active participation in an employer's retirement plan

D.Roth IRAs are not subject to the required minimum distribution rules until the death of the owner-participant

13.Which of the following statements regarding the conversion of a traditional IRA consisting entirely of deductible contributions and earnings to a Roth IRA is(are) CORRECT?

I.The converted amount is treated as a taxable distribution from the traditional IRA.

II.The 10% premature penalty applies if the owner is not at least 59 years old.

III. Taxpayers who are age 70 and older may not convert a traditional IRA to a Roth IRA.

IV.If the converted assets from the traditional IRA will not remain in the Roth IRA for a relatively long time, conversion is generally advisable.

A.I, III, and IV

B.I, II, and IV

C.II and III

D.I only

14.Which of the following statements regarding Roth IRAs and pretax 401(k) plans is(are) CORRECT?

I.There are no income limitations to participate in either of these.

II.Roth IRAs require distributions no later than age 70; for the pretax 401(k) plan, there is no requirement to start taking distributions while the participant is alive.

A.II only

B.Neither I nor II

C. I only

D.Both I and II

15.Which of the following retirement accounts require a 20% mandatory withholding requirement on distributions?

I.Simplified employee pension (SEP) plan

II.Money purchase pension plan

III.Traditional profit-sharing plan

IV.Cash balance pension plan

A.I and II

B.II, III, and IV

C.II and III

D.I, III, and IV

16.Which of the following statements regarding a taxpayer who receives a lump-sum plan distribution consisting at least partially of employer stock is(are) CORRECT?

I. The net unrealized appreciation (NUA) portion of a lump-sum distribution stock is taxed at ordinary income tax rates when sold.

II.The taxpayer will not be liable for income tax on the net unrealized appreciation (NUA) portion of the distribution until the stock is sold or otherwise disposed of.

A.Neither I nor II

B.Both I and II

C.I only

D.II only

17.Which of the following reasons for an early distribution from a qualified retirement plan is NOT an exception to the 10% penalty?

A. It is a distribution for higher education costs

B.The distribution is made to a beneficiary of the account due to the owner's death

C.The plan owner has become totally and permanently disabled

D.It is made after separation from service from an employer-sponsor of the plan after age 55

18.All of the following statements regarding qualified domestic relations orders (QDROs) are correct except

A.distributions made to an alternate payee under a QDRO are subject to the 10% premature distribution penalty

B.distributions made to an alternate payee under a QDRO outside of retirement accounts are subject to income tax

C.an alternate payee who is the former spouse of the participant, and who receives a distribution by reason of a QDRO or other court order, may roll over the distribution in the same manner as if she were the participant (including to her own IRA)

D.a QDRO may specify the time at which the alternate payee will receive the plan benefit (assuming the type of distribution is allowed by the plan document