CRPC EXAM QUESTIONS AND
VERIFIED ANSWERS
The amount of the loan would be limited to $50,000, and the loan could be for
longer than five years. - B
George wants to pay his credit cards. The amount of the loan cannot exceed
50% of the vested amount in George's account, and the term of the loan would
be limited to five years.
LO 7-1
An income-tax-penalty-free distribution cannot be made from a tax-sheltered
annuity (TSA) until the employee does which of the following?
separates from service after attaining age 55
attains age 55
becomes disabled or dies
takes a distribution under most hardship withdrawal rules - ALL OF THE
FOLLOWING
Penalty-free distributions can be made from a TSA or 401(k) when an employee
separates from service after attaining age 55, attains age 59½, becomes disabled
or dies, or takes a hardship distribution for deductible medical expenses only.
,All other hardship withdrawals are subject to early withdrawal penalty rules.
Attaining age 55 means the worker is 55 on December 31 of the year of
separation-not that the worker was 55 on the day of separation.
LO 7-3
Charles turns 73 this year. His IRA was worth $100,000 at the end of last year.
What is his RMD for this year? (The Uniform Table factor is 27.4 at age 73.)
A)
$5,501
B)
$3,774
C)
$3,650
D)
$3,906 - C
$100,000/ 27.4 = $3,650.
LO 7-3
A springing durable power of attorney
A)
is usually created in a person's revocable trust.
B)
remains effective after the principal's death.
C)
,gives the attorney-in-fact authority only when the principal is deemed
incompetent.
D)
remains effective until the principal becomes incapacitated. - C
Explanation
The very purpose of any durable power of attorney is to give the attorney-in-
fact authority to act after the principal becomes incapacitated. However, such
authority does not survive the principal's death. Such authority is created in an
independent document (not part of a living will or a living trust), and is
effective immediately in this type of power of attorney. A springing durable
power of attorney becomes effective when the principal becomes incompetent
or incapacitated.
LO 5-2
Non springing durable poa - With a non-springing power of attorney, the agent
has the powers granted in the document the moment it is signed by you and the
agent(s) you designate.
A Medicare Part A patient must pay
A)
the approved costs of care in a skilled nursing facility for the first 10 days.
B)
all costs for a hospital stay beyond 150 days.
C)
the annual deductible for out-of-hospital doctor's services.
D)
, all costs above the hospital deductible for a 30-day stay in a hospital. - B
The patient must pay all costs related to a hospital stay beyond 150 days. The
annual deductible describes a gap in Medicare Part B coverage, not Part A.
Medicare pays for the cost of the first 60 days in a hospital, but the patient must
pay the Part A deductible. Medicare will pay the approved charges for the first
20 days in a skilled nursing facility. The gap results from the cost of care that
exceeds 20 days (the patient pays the per day copayment) or the need for
custodial care.
LO 5-3
Which one of the following U.S. citizens is currently eligible for Medicare Part
A coverage at no cost?
A)
a self-employed truck driver, age 66
B)
an unmarried heiress who has always lived on trust fund money, has never had
earned income, and just turned 65
C)
a professional independent corporate director, age 57
D)
a federal government employee, hired in 1989 and age 64 - A
The dividend paid from the stock is simply used to purchase more shares of
stock. The shareholder is treated as if he or she received a dividend of cash
VERIFIED ANSWERS
The amount of the loan would be limited to $50,000, and the loan could be for
longer than five years. - B
George wants to pay his credit cards. The amount of the loan cannot exceed
50% of the vested amount in George's account, and the term of the loan would
be limited to five years.
LO 7-1
An income-tax-penalty-free distribution cannot be made from a tax-sheltered
annuity (TSA) until the employee does which of the following?
separates from service after attaining age 55
attains age 55
becomes disabled or dies
takes a distribution under most hardship withdrawal rules - ALL OF THE
FOLLOWING
Penalty-free distributions can be made from a TSA or 401(k) when an employee
separates from service after attaining age 55, attains age 59½, becomes disabled
or dies, or takes a hardship distribution for deductible medical expenses only.
,All other hardship withdrawals are subject to early withdrawal penalty rules.
Attaining age 55 means the worker is 55 on December 31 of the year of
separation-not that the worker was 55 on the day of separation.
LO 7-3
Charles turns 73 this year. His IRA was worth $100,000 at the end of last year.
What is his RMD for this year? (The Uniform Table factor is 27.4 at age 73.)
A)
$5,501
B)
$3,774
C)
$3,650
D)
$3,906 - C
$100,000/ 27.4 = $3,650.
LO 7-3
A springing durable power of attorney
A)
is usually created in a person's revocable trust.
B)
remains effective after the principal's death.
C)
,gives the attorney-in-fact authority only when the principal is deemed
incompetent.
D)
remains effective until the principal becomes incapacitated. - C
Explanation
The very purpose of any durable power of attorney is to give the attorney-in-
fact authority to act after the principal becomes incapacitated. However, such
authority does not survive the principal's death. Such authority is created in an
independent document (not part of a living will or a living trust), and is
effective immediately in this type of power of attorney. A springing durable
power of attorney becomes effective when the principal becomes incompetent
or incapacitated.
LO 5-2
Non springing durable poa - With a non-springing power of attorney, the agent
has the powers granted in the document the moment it is signed by you and the
agent(s) you designate.
A Medicare Part A patient must pay
A)
the approved costs of care in a skilled nursing facility for the first 10 days.
B)
all costs for a hospital stay beyond 150 days.
C)
the annual deductible for out-of-hospital doctor's services.
D)
, all costs above the hospital deductible for a 30-day stay in a hospital. - B
The patient must pay all costs related to a hospital stay beyond 150 days. The
annual deductible describes a gap in Medicare Part B coverage, not Part A.
Medicare pays for the cost of the first 60 days in a hospital, but the patient must
pay the Part A deductible. Medicare will pay the approved charges for the first
20 days in a skilled nursing facility. The gap results from the cost of care that
exceeds 20 days (the patient pays the per day copayment) or the need for
custodial care.
LO 5-3
Which one of the following U.S. citizens is currently eligible for Medicare Part
A coverage at no cost?
A)
a self-employed truck driver, age 66
B)
an unmarried heiress who has always lived on trust fund money, has never had
earned income, and just turned 65
C)
a professional independent corporate director, age 57
D)
a federal government employee, hired in 1989 and age 64 - A
The dividend paid from the stock is simply used to purchase more shares of
stock. The shareholder is treated as if he or she received a dividend of cash
