ACC/307 ACC307 ACC 307 WEEK 10 QUIZ

ACC 307 WEEK 10 QUIZ

1.

TF Qu. 27 If a taxpayer's marginal tax rate is decreasing...

If a taxpayer's marginal tax rate is decreasing, a taxpayer contributing to a traditional IRA can earn an after-tax rate of return greater than her before-tax rate of return.

TF Qu. 14 An employer may contribute to an employee's...

An employer may contribute to an employee's traditional 401(k) account but the employer may not

3.

TF Qu. 8 Both employers and employees may contribute ...

Both employers and employees may contribute to defined contribution plans. However, the amount that employees may contribute to the plan in a given year is limited by the tax law while the amount that employers may contribute is not.

4.

MC Qu. 67 Daniela retired at the age of 65. The curren...

Daniela retired at the age of 65. The current balance in her Roth IRA is $200,000. Daniela established the Roth IRA 10 years ago. Through a rollover and annual contributions Daniela has contributed $80,000 to her account. If Daniela receives a $50,000 distribution from the Roth IRA, what amount of the distribution is taxable?

$30,000.

$20,000.

$50,000.

$0

.

5.

MC Qu. 63 Bryan, who is 45 years old, had some surpris...

Bryan, who is 45 years old, had some surprise medical expenses during the year. To pay for these expenses (which were claimed as itemized deductions on his tax return), he received a $20,000 distribution from his traditional IRA (he has only made deductible contributions to the IRA). Assuming his marginal ordinary income tax rate is 15%, what amount of taxes and/or early distribution penalties will Bryan be required to pay on this distribution?

$3,000 income tax; $0 early distribution penalty.

$0 income tax; $0 early distribution penalty.

$0 income tax; $2,000 early distribution penalty.

$3,000 income tax; $2,000 early distribution penalty.

6.

MC Qu. 69 Lisa, age 45, needed some cash so she withdr...

Lisa, age 45, needed some cash so she withdrew $50,000 from her Roth IRA. At the time of the distribution, the balance in the Roth IRA was $200,000. Lisa established the Roth IRA 10 years ago. Over the years, she has contributed $20,000 to her account. What amount of the distribution is taxable and subject to early distribution penalty?

$30,000.

$50,000.

$5,000.

$0.

7.

MC Qu. 59 Which of the following statements comparing ...

Which of the following statements comparing qualified defined contribution plans and nonqualified deferred compensation plans is false?

8.

MC Qu. 32 Which of the following statements is true re...

Which of the following statements is true regarding employer-provided qualified retirement plans?

9.

MC Qu. 54 Which of the following statements regarding ...

Which of the following statements regarding Roth 401(k) accounts is false?

10.

MC Qu. 47 Shauna received a distribution from her 401...

Shauna received a distribution from her 401(k) account this year. In which of the following situations will Shauna be subject to an early distribution penalty?

Shauna is 58 years of age but not yet retired when she receives the distribution.

Shauna is 69 years of age but not yet retired when she receives the distribution.

Shauna is 60 years of age but not yet retired when she receives the distribution.

Shauna is 56 years of age and retired when she receives the distribution.