Finance

Donna, age 50, is single and earns $40,000 annually. She is covered un

Donna, age 50, is single and earns $40,000 annually. She is covered under her employer’s retirement plan. Donna would like to start a traditional IRA and contribute $4,000 this year. Which of the following describes her ability to establish a traditional IRA and the tax treatment of her contribution? A) Her contribution is fully tax […]

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Date: September 19th, 2020

All of the following statements about traditional and Roth IRAs are tr

All of the following statements about traditional and Roth IRAs are true EXCEPT A) Traditional IRA contributions may be fully, partially, or not income tax deductible. B) Qualified distributions from Roth IRAs are received income tax free. C) Contributions to Roth IRAs are made with after-tax dollars. D) Traditional IRAs are exempt from the penalty […]

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Date: September 19th, 2020

All of the following are circumstances under which withdrawals from a

All of the following are circumstances under which withdrawals from a traditional IRA may be made prior to age 59.5 without incurring a substantial penalty EXCEPT A) The withdrawal is in substantially equal installments paid over the individual’s life expectancy. B) The withdrawal is used to pay living expenses after unemployment insurance benefits cease. C) […]

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Date: September 19th, 2020

Which of the following statements about the withdrawal of funds from a

Which of the following statements about the withdrawal of funds from a traditional IRA is true? A) Withdrawals of deductible contributions between the ages of 59.5 and 65 are subject to a tax penalty unless they are withdrawn because of specified circumstances such as death or long-term disability. B) Amounts attributable to nondeductible contributions are […]

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Date: September 19th, 2020

Which of the following statements regarding individual retirement acco

Which of the following statements regarding individual retirement accounts (IRAs) is (are) true? I. If an individual’s only income during the year is from investments, he or she cannot make an IRA contribution. II. The funds in the IRA can be used to purchase life insurance on the owner. A) I only B) II only […]

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Date: September 19th, 2020

Juanita paid a life insurer $45,000 in exchange for an immediate life

Juanita paid a life insurer $45,000 in exchange for an immediate life annuity. Juanita will receive $500 per month from the insurer, and her life expectancy is 15 years (180 months). Assume that Juanita receives 12 monthly payments of $500 the first year. How much taxable income must she report? A) $3,000 B) $4,000 C) […]

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Date: September 19th, 2020