QUESTION 10

Thomas received a lump sum distribution of 10,000 shares of stock from his employer's stock bonus plan valued at $1,000,000 when he separated from his employer at age 60. The value of the stock at the time of contribution to the plan was $250,000. What are the tax consequences of this distribution?

$750,000 is treated as net unrealized appreciation (NUA).

The NUA amount is not taxed upon distribution from the plan.

Thomas's adjusted basis in the shares is $250,000.

The $250,000 is taxable as ordinary income in the year of the lump sum distribution.

	A.	I, II, and III
	B.	I, II, III, and IV
	C.	I and II
	D.	III and IV

QUESTION 11

A client, age 60, is electing to take early retirement this year. She participates in a profit-sharing plan sponsored by her employer that will provide her with a lump-sum distribution. She has been a participant in the plan for the past 12 years and has always invested her account 100% in stock mutual funds. If the distribution is made in a lump sum this year, what is an available option for the client?

	A.	Elect to treat a portion of the distribution as long-term capital gain income.
	B.	Execute the lump-sum distribution as a tax-free loan and repay the loan over a 5-year period.
	C.	Roll over the lump-sum distribution to an IRA.
	D.	Because 100% of her account is invested in equities, she may make a net unrealized appreciation (NUA) election and receive favorable tax treatment for the distribution.

QUESTION 12

Which of the following is NOT an option unique to a surviving spouse when someone dies with a retirement account or IRA?

	A.	Only surviving spouses can recalculate their life expectancy each year.
	B.	Only surviving spouses can extend RMDs longer than ten years.
	C.	Only surviving spouses can absorb the money into their own name and treat the money as if the decedent never existed.
	D.	When the decedent dies prior to the required beginning date, only a surviving spouse can delay RMDs until the decedent would have been 72.