CEBS RPA 2 COMPLETELY SOLVED!
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Section 79 - ANSWERThe annual cost of insurance can represent taxable income to
the employees
Section 83 - ANSWERTaxation of property transferred in connection with the
performance of services
Keogh Plan max contribution limits under defined contribution plan - ANSWERLesser of
100% of the comp or $51k in 2013. For the Self Employed person "comp" is person's
earned income from selfemployment. less one half of the self employment tax. not to
exceed $255K.
Section 125 - ANSWERPermits the adoption of cafeteria or flexible benefit plans and
provides that an employee can choose between taxable and non taxable compensation
elements without problems of constructive receipt if certain conditions are met.
Constructive Receipt - ANSWERIncome that is not yet received is considered received
and, therefore currently taxable when it is credited to an account or set aside so it may
be drawn on at any time and amounts receivable and are not subject to substantial
limitations or restrictions
457 Plans - ANSWERNonqualified deferred compensation plans available only to state
and local governmental employers and nongovernmental organizations exempt from tax
under IRC Section 501
Elig Requirements of a Keogh Plan - ANSWER1. Only a sole proprietor (not a common
law employee) or a partnership (not indiv. partner) can establish
2. If an owner employee wishes to establish & participate in a Keogh Plan he must
cover ALL ees who are 21+ and have 1 year of service. A 2 yr WP can be used if the
plan provides 100% vesting after 2 yrs
3. Must meet the same nondiscrimination coverage and participation requirements as
other qualified plans.
Keogh Plan Limits under defined benefit plan - ANSWERThe limit is the lesser of 100%
of the average of the participants highest three consecutive calendar years of earnings
or $205K
Keogh Plans and Loans - ANSWERLoans from Keogh plans are generally permitted
due to EGTRRA.
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Section 79 - ANSWERThe annual cost of insurance can represent taxable income to
the employees
Section 83 - ANSWERTaxation of property transferred in connection with the
performance of services
Keogh Plan max contribution limits under defined contribution plan - ANSWERLesser of
100% of the comp or $51k in 2013. For the Self Employed person "comp" is person's
earned income from selfemployment. less one half of the self employment tax. not to
exceed $255K.
Section 125 - ANSWERPermits the adoption of cafeteria or flexible benefit plans and
provides that an employee can choose between taxable and non taxable compensation
elements without problems of constructive receipt if certain conditions are met.
Constructive Receipt - ANSWERIncome that is not yet received is considered received
and, therefore currently taxable when it is credited to an account or set aside so it may
be drawn on at any time and amounts receivable and are not subject to substantial
limitations or restrictions
457 Plans - ANSWERNonqualified deferred compensation plans available only to state
and local governmental employers and nongovernmental organizations exempt from tax
under IRC Section 501
Elig Requirements of a Keogh Plan - ANSWER1. Only a sole proprietor (not a common
law employee) or a partnership (not indiv. partner) can establish
2. If an owner employee wishes to establish & participate in a Keogh Plan he must
cover ALL ees who are 21+ and have 1 year of service. A 2 yr WP can be used if the
plan provides 100% vesting after 2 yrs
3. Must meet the same nondiscrimination coverage and participation requirements as
other qualified plans.
Keogh Plan Limits under defined benefit plan - ANSWERThe limit is the lesser of 100%
of the average of the participants highest three consecutive calendar years of earnings
or $205K
Keogh Plans and Loans - ANSWERLoans from Keogh plans are generally permitted
due to EGTRRA.
