Final Exam Questions and Answers-IRA
Is K-1 income from an S corp. considered earned income for a traditional IRA contribution? - Answer-Yes
Is the following type of income considered earned income for a traditional IRA contribution?Partnership
income from a law firm. - Answer-Yes
Seth and Morgan were just married, but Seth does not work. They are both 25 years old. Morgan
supports Seth with funds from her trust fund, investment income of $12,000, and her part-time earnings
of $7,000 this year. If Morgan contributes $5,500 in 2017 to her Roth IRA, how much can Seth contribute
to his traditional IRA? - Answer-$1,500
What is the earliest age that an IRA catch-up contributions can be made? - Answer-50
Charles, a single 29-year-old CEO of a technology start-up company, earns a $2 million base salary with a
$400,000 bonus. He is not a participant in any retirement plans at work. What is the maximum
deductible IRA contribution Charles can make during 2018? - Answer-5,500
A SEP can be established by which of the following entities?
S corporation.
LLC taxed as a partnership.
, C corporation. - Answer-1, 2 and 3.
Which kind of employees may be excluded from participation in a SEP? - Answer-Employees covered by
a collective bargaining agreement.
Participants in these plans will not be considered active participants for purposes of IRA deductibility? -
Answer-457 plan
Marleen, who is 37 years old, is an employee of Zcrypt, Inc. (Zcrypt). Zcrypt sponsors a SEP IRA and
would like to contribute the maximum amount to Marleen's account for the plan year. If Marleen earns
$32,000 per year, what is the maximum contribution Zcrypt can make on her behalf to the SEP IRA? -
Answer-$8,000
Bob, who is 58 years old, makes his first contribution to a Roth IRA in December of Year 1. What is the
first year in which he could receive a qualified distribution from a Roth IRA? - Answer-Year 6
Parker, age 51, earns $300,000 annually from Infinity, which sponsors a SIMPLE, and matches all
employee deferrals 100% up to a 3% contribution. What is the maximum total contribution to Parker's
account in 2018, including both employee and employer contributions? - Answer-$24,500
SEPs and SIMPLEs are tax advantaged retirement plans that are less complex than qualified plans and
easier to implement. Which of the following statements is (are) true regarding SEPs and SIMPLEs?
For an employee with a salary of $30,000, more money can be contributed (from both employee and
employer) to a SEP than a SIMPLE.
The vesting and distribution rules for both plans are almost identical.
Both plans have the same coverage and participation rules. - Answer-2 only.
Is K-1 income from an S corp. considered earned income for a traditional IRA contribution? - Answer-Yes
Is the following type of income considered earned income for a traditional IRA contribution?Partnership
income from a law firm. - Answer-Yes
Seth and Morgan were just married, but Seth does not work. They are both 25 years old. Morgan
supports Seth with funds from her trust fund, investment income of $12,000, and her part-time earnings
of $7,000 this year. If Morgan contributes $5,500 in 2017 to her Roth IRA, how much can Seth contribute
to his traditional IRA? - Answer-$1,500
What is the earliest age that an IRA catch-up contributions can be made? - Answer-50
Charles, a single 29-year-old CEO of a technology start-up company, earns a $2 million base salary with a
$400,000 bonus. He is not a participant in any retirement plans at work. What is the maximum
deductible IRA contribution Charles can make during 2018? - Answer-5,500
A SEP can be established by which of the following entities?
S corporation.
LLC taxed as a partnership.
, C corporation. - Answer-1, 2 and 3.
Which kind of employees may be excluded from participation in a SEP? - Answer-Employees covered by
a collective bargaining agreement.
Participants in these plans will not be considered active participants for purposes of IRA deductibility? -
Answer-457 plan
Marleen, who is 37 years old, is an employee of Zcrypt, Inc. (Zcrypt). Zcrypt sponsors a SEP IRA and
would like to contribute the maximum amount to Marleen's account for the plan year. If Marleen earns
$32,000 per year, what is the maximum contribution Zcrypt can make on her behalf to the SEP IRA? -
Answer-$8,000
Bob, who is 58 years old, makes his first contribution to a Roth IRA in December of Year 1. What is the
first year in which he could receive a qualified distribution from a Roth IRA? - Answer-Year 6
Parker, age 51, earns $300,000 annually from Infinity, which sponsors a SIMPLE, and matches all
employee deferrals 100% up to a 3% contribution. What is the maximum total contribution to Parker's
account in 2018, including both employee and employer contributions? - Answer-$24,500
SEPs and SIMPLEs are tax advantaged retirement plans that are less complex than qualified plans and
easier to implement. Which of the following statements is (are) true regarding SEPs and SIMPLEs?
For an employee with a salary of $30,000, more money can be contributed (from both employee and
employer) to a SEP than a SIMPLE.
The vesting and distribution rules for both plans are almost identical.
Both plans have the same coverage and participation rules. - Answer-2 only.
