Question 1

Which of the following distributions from a profit-sharing plan would not be subject to the 10 percent early withdrawal penalty, assuming the participant has not attained age 59?

Question options:

A distribution made to the participant after she separated from service at age 57

A distribution made from an IRA that was established for a 50-year old spouse under a Qualified Domestic Relations Order (QDRO) pursuant to a divorce from the participant in the profit-sharing plan

A distribution from the plan to a participant who lost his right leg above the knee in a car accident

A distribution to pay for costs of higher education for a participant's 18 year-old daughter

Question 2:

Donna turned 72 on January 7th of Year 2 (which is before the year 2020).

Her profit-sharing account balance was $100,000 at the end of Year 1 and $150,000 at the end of Year 2.

Her beneficiary is her older sister, Robin, who turned 82 years old on July 2nd of Year 2.

Assume that the life expectancy factor based on the uniform lifetime table for someone who is 70, 71, 72, and 73 is 27.4, 26.5, 25.6 and 24.7, respectively.

If Donna only takes a distribution of $2,000 for Year 2, then how much is her minimum distribution penalty?

Question options:

	$953
	$1,930
	$2,036
	$1,024

Question 3:

Generally, distributions from a retirement plan are subject to income tax as ordinary income.

Which of the following tax treatments is not an exception to ordinary income on a distribution from a qualified plan?

Question options:

	Net unrealized appreciation
	Non-recognition of gain treatment
	IRA rollovers
	401(k) loan