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Review Questions Module 1
TRADITIONAL IRAS
Unless otherwise noted, assume the following questions relate to participants under age 50.
a. 0
b. $140
c. $560
d. $1,400
I. earned in the account
II. transferred from one custodian to another
III. rolled over from one custodian to another
IV. withdrawn from the account
a. I only
b. IV only
c. II and III only
d. I, II and III only
a. April 15, 2007 and April 15, 2008
b. January 1, 2007 and December 31, 2007
c. January 1, 2007 and April 15, 2008
d. April 15, 2007 and December 31, 2007
a. wages
b. salary
c. dividends
d. commissions
a. 0
b. $2,000
c. $2,500
d. $3,000
a. 0
b. $4,000
c. $5,000
d. $6,500
a. 0
b. $60
c. $120
d. $180
I. $4,000 to John's non-deductible IRA
II. $4,000 to John's deductible IRA
III. $4,000 to Mary's non-deductible IRA
IV. $4,000 to Mary's deductible IRA
a. I and III
b. I and IV
c. II and III
d. II and IV
I. $4,000 to John's non-deductible IRA
II. $4,000 to John's deductible IRA
III. $4,000 to Mary's non-deductible IRA
IV. $4,000 to Mary's deductible IRA
a. I and III
b. I and IV
c. II and III
d. II and IV
a. contribute $4,000 to a non-deductible IRA
b. contribute $4,000 to a deductible IRA
c. contribute $4,000 to an IRA, of which $1,250 is deductible
d. not contribute to an IRA
a. 0
b. $1,200
c. $2,800
d. $4,000
I. An individual may transfer an IRA between custodians no more than once per year
II. There are no limits on transfers between custodians of IRAs
III. An individual may rollover an IRA between custodians no more than once per year
IV. There are no limits on rollovers between custodians on IRAs
a. I and III only
b. I and IV only
c. II and III only
d. II and IV only
a. The withdrawal is fully taxable as capital gains.
b. The withdrawal is fully taxable as ordinary income and subject to a 10% penalty.
c. Only the earnings portion of the withdrawal is taxable as ordinary income.
d. There is no tax consequence to the withdrawal.
a. movement of IRA assets directly from a bank custodian to a brokerage firm custodian
b. movement of pension plan assets from the plan's trustee to an IRA custodian
c. withdrawal of IRA assets from a bank custodian and subsequent deposit with a brokerage firm custodian
d. movement of assets from a Keogh plan's trustee to an IRA custodian
a. to eliminate taxes on the distribution
b. to delay taxes on the distribution
c. to receive current income from the IRA
d. federal law requires rollover of lump sum distributions into an IRA
a. accept the lump sum distribution and pay taxes on it
b. roll the lump sum distribution into his existing IRA
c. establish a new IRA to accept the rollover distribution
d. use income averaging methods to calculate the taxes owed on distribution
a. preferred stocks
b. zero coupon bonds
c. variable annuity contracts
d. term life insurance policy
a. stamp collection
b. limited edition lithographs
c. US Gold Eagle coins
d. Canadian Maple Leaf gold coins
a. common stocks
b. corporate bonds
c. mutual funds
d. certificates of deposit
a. mutual funds investing in corporate bonds
b. mutual funds investing in utility stocks
c. mutual funds investing in US government bonds
d. mutual funds investing in municipal bonds
a. corporate bond mutual fund
b. zero coupon bonds
c. mutual fund investing in utility stocks
d. mutual fund investing in growth stocks
a. payable in the year of the sale
b. deferred until Mrs. Lincoln reaches age 59½
c. deferred until Mrs. Lincoln retires
d. deferred until proceeds are withdrawn from the IRA
a. $500 penalty
b. $1,400 in taxes
c. $1,400 in taxes and a $500 penalty
d. $2,500 penalty
I. a 47-year old woman
II. a 53-year old permanently disabled man
III. a beneficiary upon the death of an IRA account holder
IV. a 74-year old man
a. II and III only
b. III and IV only
c. I, II and IV only
d I, II, III and IV
I. a 47-year old woman
II. a 53-year old permanently disabled man
III. a beneficiary upon the death an IRA account holder
IV. a 74-year old man
a. I and II only
b. III and IV only
c. II, III and IV only
d I, II, III and IV
a. the account holder is disabled
b. the account holder is deceased
c. substantially equal payments are scheduled for a lifetime
d. due to financial hardship
a. $500
b. $1,975
c. $3,950
d. $19,750
a. December 31, 2006
b. April 1, 2007
c. December 31, 2007
d. April 1, 2008
a. 0
b. $1,000
c. $1,500
d. $2,000
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