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Review Questions Module 2
ROTH IRAs
Unless otherwise noted, assume the following questions relate to participants under age 50.
a. 0
b. $4,000
c. $5,000
d. $6,500
a. SEP IRAs
b. SIMPLE IRAs
c. backloaded IRAs
d. nondeductible IRAs
a. always tax deductible
b. sometimes tax deductible
c. never tax deductible
d. subject to the same rules as traditional IRAs
a. Persons over age 70½ may establish a Roth IRA
b. Persons over age 70½ may contribute to a Roth IRA
c. Persons over age 70½ may rollover IRA assets
d. all of the above
a. a 75-year old single taxpayer with earned income of $70,000
b. a 65-year old married taxpayer earning $150,000
c. a 45-year old single taxpayer with earned income of $105,000
d. a 39-year old married taxpayer earning $165,000
a. Mr. Able, a 69-year old single taxpayer earning $75,000
b. Ms. Bravo, a 74-year old married taxpayer earning $10,000
c. Mr. Charlie, a 65-year old married taxpayer earning $17,000
d. Ms. Delta, a 72-year old single taxpayer earning $120,000
a. 100% of earned income
b. $4,000
c. the greater of a or b
d. the lesser of a or b
a. confiscation by the IRS
b. a 6% penalty tax
c. a 10% penalty tax
d. a 50% penalty tax
a. the end of the tax year
b. the taxpayer's tax filing date
c. the taxpayer's tax filing date plus extensions
d. the end of the calendar year
a. the penalty only applies to the year of the contribution
b. the penalty applies each year the contribution remains in the account
c. the penalty applies until the excess is withdrawn
d. the penalty applies until the contributor underfunds future contributions to "correct" the excess
I. after age 59½
II. due to the account holder's disability
III. due to the account holder's death
IV. to pay for the first-time purchase of a primary residence
a. I only
b. II and III only
c. I, II and III only
d. I, II, III and IV
a. one tax-year
b. two tax-years
c. three tax-years
d. five tax-years
a. as contributions first, then earnings
b. as earnings first, then contributions
c. the same as a distribution from a non-deductible traditional IRA
d. the same as a distributions from a deductible traditional IRA
a. 0%
b. 6%
c. 10%
d. 50%
a. 0
b. $1,000
c. $1,500
d. $2,000
a. tax free
b. subject to the 20% withholding tax
c. but must pay tax as though the traditional IRA assets were distributed, including a 10% penalty on premature withdrawals
d. but must pay tax as though the traditional IRA assets were distributed, but no 10% penalty for premature withdrawals
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