CEBS RPA 2 ADVANCED QUESTIONS WITH
COMPLETE DETAILED CORRECT
ANSWERS.GRADE A+ ASSURED
The annual cost of insurance can represent taxable income to the employees - answer ✔✔-Section 79
Taxation of property transferred in connection with the performance of services - answer ✔✔-Section
83
Permits 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. - answer ✔✔-Section 125
Income 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 - answer ✔✔-Constructive Receipt
Nonqualified deferred compensation plans available only to state and local governmental employers
and nongovernmental organizations exempt from tax under IRC Section 501 - answer ✔✔-457 Plans
1. 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. - answer ✔✔-Elig Requirements of a Keogh Plan
The limit is the lesser of 100% of the average of the participants highest three consecutive calendar
years of earnings or $205K - answer ✔✔-Keogh Plan Limits under defined benefit plan
COMPLETE DETAILED CORRECT
ANSWERS.GRADE A+ ASSURED
The annual cost of insurance can represent taxable income to the employees - answer ✔✔-Section 79
Taxation of property transferred in connection with the performance of services - answer ✔✔-Section
83
Permits 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. - answer ✔✔-Section 125
Income 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 - answer ✔✔-Constructive Receipt
Nonqualified deferred compensation plans available only to state and local governmental employers
and nongovernmental organizations exempt from tax under IRC Section 501 - answer ✔✔-457 Plans
1. 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. - answer ✔✔-Elig Requirements of a Keogh Plan
The limit is the lesser of 100% of the average of the participants highest three consecutive calendar
years of earnings or $205K - answer ✔✔-Keogh Plan Limits under defined benefit plan
