Question 11 (1 point)

Requirements for a durable power of attorney device include all of the following except:

Question 11 options:

	The principal must be of legal age
	The attorney in fact must be of legal age at the time the power is exercised
	There is no special or specific wording required for durable power of attorney to be conferred
	Competence is a requirement of the principal

Question 12 (1 point)

Ocatagon Industries has an age weighted profit sharing plan that uses a fixed age-weighted formula for allocating employer contributions. The plan covers 50 employees. The owner and 2 key employees are highly compensated, each earning $500,000 per year. Average pay for the rank and file employees is $35,000 per year. This year, the company allocated $1,000 to each employees retirement account. The tax implications of such an allocation include which of the following:

Question 12 options:

	because the plan is top-heavy, Ocatagon cannot receive a tax deduction until an employee withdraws funds from his or her retirement account
	participant does not pay income tax on employer contributions and earnings until the plan participant withdraws the funds
	plan distributions for hardship withdrawals made to employees before age 59 1/2 are tax free
	a and c

Question 13 (1 point)

Eileen Tate, an employee of Great Corp., is 52, and her company has just converted its defined benefit plan to a cash balance plan. The present value of her accrued benefit is $375,000. Under the cash benefit plan, Great Corp. will make an annual contribution of 11% to the employees hypothetical accounts and guarantee a 6% interest rate. If a cash balance plan had been in effect since Eileens date of hire, she would have $300,000. Eileens annual salary is $105,000. Under the cash balance plan, the value of the annual contribution to Eileens retirement account will be:

Question 13 options:

	$18,000
	the same contribution amount that she received under the defined benefit plan
	$11,500
	$0 until the excess $75,000 is credited to her hypothetical account
	$ 6,300

Question 14 (1 point)

Minnie and Micky Pluck are married, filing jointly in 2009. Minnie earns $60,000 a year and takes full advantage of her employers qualified retirement plan. Micky is not employed.

Question 14 options:

	Micky cannot make an IRA contribution
	both Micky and Minnie can make a nondeductible IRA contribution
	Micky can receive a partial deduction for an IRA contribution
	Minnie can make a nondeductible IRA contribution, but Micky cannot make an IRA contribution because he has no earned income
	Micky can receive a full deduction for an IRA contribution

Question 15 (1 point)

Under which of the following circumstances may the IRS attack the validity of a family limited partnership?

Question 15 options:

	The family limited partnership has a valid business purpose
	The assets within the partnership should be included within the decedents estate since decedent retained a lifetime income interest in the property
	Family limited partnerships have withstood all IRS attacks
	There is a written FLP agreement setting forth the rights of all the partners