Traditional and Roth IRAs and Employee Benefits

/in /by

Unit 3: Traditional and Roth IRAs and Employee Benefits  

   

 

 

1. In considering whether to convert a traditional IRA to the Roth IRA form, which of the following is a valid consideration?

a)       If the taxpayer anticipates being in a lower tax bracket at date of distribution from the Roth IRA, it generally makes sense to convert.

b)       If the source of payment for taxes due upon conversion comes from an outside source, it generally is advantageous to convert

c)       It is generally advantageous if the converted assets will remain in the Roth IRA for a relatively short period of time before withdrawal.

d)       If the taxpayer files as married filing separately and thereby splits income, it generally makes sense to convert.

 

2. Which of the following statements is NOT correct regarding the conversion of a traditional IRA to a Roth IRA in 2014?

a)       The IRA owner’s modified adjusted gross income (MAGI) cannot exceed $100,000 in the year of the conversion

b)       An amount in a traditional IRA may be transferred to a Roth IRA maintained by the same trustee.

c)       An amount distributed from a traditional IRA can be rolled over to a Roth IRA within 60 days of the distribution.

d)       An amount in a traditional IRA may be transferred in a trustee-to-trustee transfer from the trustee of the traditional IRA to the trustee of the Roth IRA.

 

3. Carol has been researching IRAs and learning of the advantages and disadvantages of using an IRA as a retirement savings vehicle. Which of the following statements regarding an IRA is(are) CORRECT?

I. When the investments in an IRA consist solely of securities, net unrealized appreciation (NUA) treatment of a lump-sum distribution is available.

II. Eligible individuals may contribute up to $5,500 to an IRA and an additional $1,000 when age 50 or over.

III. Certain taxpayers may be eligible for an income tax credit for contributions to a traditional IRA but not a Roth IRA.

IV. Earnings on assets held in an IRA are not subject to federal income tax until withdrawn from the account. (Points : 3)

a)        I, II, III, and IV

b)        II only

c)       I and III

d)       II and IV

 

4. Which of the following statements regarding IRAs is(are) CORRECT?

I. Individual retirement accounts are funded with insurance products.

II. Individual retirement annuities are funded with securities and investment products. (Points : 3)

a) I only

b) II only

c) Both I and II

d) Neither I nor II

 

5. Roger is 73 years old. He has an AGI of $35,000 of which $10,000 is earned income. What amount can Roger contribute to a traditional IRA and/or a Roth IRA in 2014?

a) Roger can contribute $6,500 to a Roth IRA only.

b) A total of $6,500 in contributions may be allocated between the traditional IRA and the Roth IRA.

c) Roger can contribute $6,500 to either a traditional IRA or a Roth IRA.

d) Roger can no longer contribute to any IRA, as he is older than 70½ in 2014.

 

6. Which of the following statements regarding prohibited transactions by a fiduciary or an individual associated with traditional IRA accounts are CORRECT?

I. Generally, if an individual or the individual’s beneficiary engages in a prohibited transaction with the individual’s IRA account at any time during the year, it will not be treated as an IRA as of the 1st day of the year.

II. If an individual borrows money against an IRA annuity contract, the individual must include in gross income the fair market value of the annuity contract as of the 1st day of the tax year.

III. Selling property to an IRA by a fiduciary or an individual owner of the IRA is not prohibited.

IV. A 50% penalty will be assessed against an IRA owner who borrows money against her IRA.

a) I, III, and IV

b) I, II, and III

c) I and II

d) II and III

 

7. Which of the following is considered to be earned income for purposes of making contributions to a traditional IRA?

a) Rental income

b) Alimony received from an ex-spouse

c) Interest income

d) Pension income

 

8. In 2014, Nina and Bob reported the following items of income:

  Nina Bob Total
Salary $40,000 $ 0 $40,000

 
Interest Income $  1,000 $ 200 $  1,200
Alimony received (prior to marriage) $ 0 $10,000 $10,000
Total $41,000 $10,200 $51,200

Neither Nina nor Bob is covered by a qualified retirement plan. They were married in December 2014. Assuming they file married filing jointly and are both age 45, what is the maximum combined tax-deductible amount, if any, that they can contribute to their traditional IRAs?

a) $0

b) $5,500

c) $6,500

d) $11,000

 

9. Which of the following persons could make tax-deductible contributions to a traditional IRA regardless of their adjusted gross income (AGI)?

a) A person who participates in a Section 457 plan

b) A person who participates in a SEP IRA

c) A person who participates in a Section 401(k) plan

d) A person who participates in a Section 403(b) plan

 

10. Regarding an IRA, all of the following are prohibited transactions EXCEPT 

a)  accepting rollovers to the IRA from a qualified plan

b)  borrowing money from the IRA

c)  using the IRA as security for a loan

d)  buying property for personal use with IRA funds

 

11. What is the taxable character of distributions that are made from a Roth IRA?

a) Tax-deferred income when converted to a traditional IRA

b) Capital gain income if the distribution meets the required holding period

c) Tax-free income if the distribution meets the holding period and qualified distribution requirements

d) Ordinary income if the taxpayer fails to make required minimum distributions

 

12. Which of the following best describes the purpose of establishing a stretch IRA?  

a) To allow the owner to continue making contributions to a traditional IRA beyond age 70½

b) To allow the owner to borrow money from the IRA without committing a prohibited transaction

c) To extend the period of tax-deferred earnings beyond the original owner’s lifetime

d) To enable the owner to take distributions before age 59½ without paying the 10% penalty

 

13. When is a traditional IRA appropriate?

I. A taxpayer wants to defer taxes on investment income.

II. Sheltering current compensation or earned income from taxation is a taxpayer’s goal.

III. A taxpayer wishes to accumulate assets for retirement purposes.

IV. Traditional IRAs are seen as an important supplement or alternative to a qualified pension or profit-sharing plan.

a)  I only

b)  III only

c)  II and III

d)  I, II, III, and IV

 

14. Which of the following statements regarding prohibited transactions in an IRA (account or annuity) is (are) CORRECT?

I. Generally, if an individual or the individual’s beneficiary engages in a prohibited transaction with the individual’s IRA at any time during the year, the IRA will not be treated as an IRA as of the 1st day of the year.

II. An individual (or beneficiary) must include the fair market value of all (or part, in certain cases) of the IRA assets in gross income for the year in which a prohibited transaction is discovered.

a) I only

b) II only

c) Both I and II

d) Neither I nor II

 

15. Martha, age 65, opened a traditional IRA 20 years ago that has been funded solely with deductible contributions. The only assets in the IRA are individual stocks. If she withdraws $10,000 from the IRA this year, how will the distribution be taxed?

a) The distribution will be tax free.

b) The distribution will be taxed as ordinary income.

c) The 10% penalty tax will apply on the distribution and the entire distribution will be taxed as ordinary income.

d) The distribution will be taxed at long-term capital gains rates.

 

16. A single taxpayer, age 54, retired 2 years ago and is receiving a pension of $600 per month from her previous employer’s qualified pension plan. She has recently taken an employment position in a small CPA firm that has no pension plan. She will receive $80,000 annually in compensation from the CPA firm as well as $7,200 from her pension plan each year. How much can she contribute, if any, to a deductible traditional IRA in the year 2014?

a) $0

b) $4,000

c) $5,500

d) $6,500

 

17. Which type of IRA contributions may be tax deductible to a taxpayer?

I. Contributions to traditional IRAs

II. Contributions to Roth IRAs

a) I only

b) II only

c) Both I and II

d) Neither I nor II

 

18. Gordon is the fiduciary for a traditional IRA. He has several different investments available to him to invest the IRA assets. All of the following investments are permitted investments for a traditional IRA EXCEPT

a) a real estate investment trust (REIT)

b) corporate bonds

c) stock in Bottle, Inc., which is an S corporation

d) mutual funds

 

19. Which of the following is NOT an exception to the 10% premature distribution from a traditional IRA? 

a)       To pay acquisition costs of a first home for the participant, spouse, child, or grandchild of the participant or spouse, up to a $10,000 lifetime maximum

b)       For medical expenses exceeding 2% of the IRA owner’s AGI

c)       To pay higher education costs for the taxpayer, spouse, child, or grandchild

d)       To pay health insurance premiums if the owner is unemployed (the participant must file for unemployment compensation before this exception applies)

 

20. Which of the following investments may be held in an IRA account?

a) U.S. gold coin

b) Canadian gold coin

c) German silver coin

d) South African Krugerrand

SPSS

/in /by

View the following:

SPSS for Beginners 1 — Introduction

SPSS for Beginners 2a: Frequency Counts

SPSS for Beginners 2b:

Descriptive Statistics and Z-scores

Graphing and Descriptive

Stats in SPSS With Dr. Ami Gates

Open SPSS (for help see the attached file, SPSS Installation Instructions) and complete the following:

Obtain an output (as in the tutorials) with the following values

highlighted and upload it into LoudCloud:

Determine the statistics for each gender as follows:

Frequency Counts, Mean, Standard Deviation, Minimum, and Maximum

Graphing and Descriptive Stats in SPSS: Create a bar graph with gender

(axis X) and height (axis Y)

Upload the output into LC.

Data set:

Men: 74, 71, 75, 62

Female: 62, 68, 61, 71, 68, 80

Annotated Bibliography On Asthma

/in /by

In Module 02 you chose a disease that you would like to know more about. Throughout the term you have been gathering information on that topic. Now it’s time to put it all together into your annotated bibliography. Your submission should include the following:

  1. Include at least six research articles. Sample sources are the library database; medical journals; and government websites such as the National Institutes of Health (NIH).
  2. Prepare 6 references for your annotated bibliography. A maximum of 2 sources should come from an online source.
  3. Beneath each reference, write an annotation. For more information on preparing an Annotated Bibliography and APA, navigate to the Resources tab in this course.
  4. Be sure to use correct grammar and spelling.

The subject i choose was asthma

Astronomy Stage 2

/in /by

  • Brief Overview of Activity: Locate and analyze two news reports of recent astronomical discoveries.

    Required Items: The internet and/or periodicals such as (for example) The Washington Post or Sky and Telescope

    The daily news is not just sports and politics. It includes science too! For this simple activity all you need to do is find two articles related to astronomy (either online or in hard copy), summarize and analyze them.  The topics can be anything of your choosing so long as they are relevant to the course material.  Examples could be a new telescope that has recently come online, the discovery of a new exoplanet, etc.; the idea is for you to find and write up something you are interested in!  The writeup should be roughly one page long (double-spaced); the first half should be a summary of what was discovered, and the second should be your analysis of it–did it make sense?  Was it well-written?  Did it tie into things we’ve discussed in class?  What are some of the ramifications, etc.?   Include the complete citation of the original article (hyperlinked if it is from the internet).  Make sure your sources are reputable ones, whether online or not; if you have any concerns about whether that’s the case or not, please simply contact me and I can give you my opinion.

    HR Diagram Activity  (30 points)

    Brief Overview of Activity: Use an HR diagram to learn about the differences between the stars in our stellar neighborhood and the brightest stars in the sky.

    Required Items: this HR diagram, red & black ink pens.

    Procedure:

    On the HR diagram, plot each star from the “Brightest Stars Group” in black ink and then plot each star from the “Nearest Stars Group” in red ink.

    Data for both groups of stars can be found below.

    Describe any differences between the two groups of stars – such as their location on the diagram, color, mass, and the types of stars in each group.

    Which of the two groups of stars is most representative of the vast majority stars in the universe?

    Data

    Brightest Stars Group
    Name Spectral Type Absolute Mag
    Sirius A1 1.45
    Canopus F0 -5.63
    Rigel Kentaurus G2 4.39
    Arcturus K2 -0.32
    Vega A0 0.61
    Capella G8 -0.52
    Rigel B8 -7.01
    Procyon F5 2.66
    Betelgeuse M2 -5.48
    Achernar B3 -2.71
    Hadar B1 -4.78
    Altair A7 2.22
    Aldebaran K5 -0.63
    Acrux B0.5 -4.18
    Spica B1 -3.44
    Antares M1 -5.12
    Fomalhaut A3 1.75
    Pollux K0 1.07
    Deneb A2 -6.90
    Mimosa B0.5 -3.90

    Nearest Stars Group

    Name Spectral Type Absolute Mag
    Sun G2 4.83
    Proxima Centauri M5.5 15.48
    Alpha Centauri A G2 4.38
    Alpha Centauri B K0 5.71
    Barnard’s Star M3.5 13.25
    Wolf 359 M5.5 16.64
    Lalande 21185 M2 10.44
    Sirius A A1 1.44
    Sirius B A2 11.34
    Epsilon Eridani K2 6.20
    Lacaille 9352 M1 9.76
    Ross 128 M4 13.53
    61 Cygni A K5 7.48
    61 Cygni B K7 8.31
    Procyon A F5 2.65
    Procyon B A0 12.98
    Struve 2398 M3 11.17
    Groombridge 34 M1.5 10.31
    Epsilon Indi K4 6.98
    Tau Ceti G8.5 5.68

    Radioactive Dating Activity (due at Stage 2) (30 points)

    Brief Overview of Activity: Radioactive decay is one of the sources of the heat that drive the Earth’s geologic activity. Radioactive decay also allows us to date rocks and determine the age of the Earth and other solar system bodies.

    Required Items: 36 coins, a calculator, pencil & paper.

    Procedure:

    In this activity you will simulate the radioactive decay of 36 atoms of a rare isotope of uranium, U-235. Uranium-235 has a half-life of 700 million years. Gather 36 coins and arrange them in a 6 x 6 grid with all of the coins facing heads up.

    Flip each coin into the air and then place it back in its original location on the grid. This represents the passage of 1 half-life (700 million years for this example). The coins that came up heads represent atoms that have not yet decayed; the coins that came up tails represent atoms that have decayed. Record the number of heads below.

    Next flip each one of the remaining heads-up coins once and place it back in its original location. 1.4 billion years have now passed by (2 x 700 million). Record the number of remaining heads below. Repeat this process until all coins are tails up.

    _______ Original number of U-235 atoms

    _______ Remaining number of U-235 atoms after 1st flip

    _______ Remaining number of U-235 atoms after 2nd flip

    Add additional lines as needed.

    Questions:

    How many half-lives did it take for all of the atoms to decay?

    How many years does that equate to?

    Do you think everyone in class will get the same answer? Why?