Question 1

Which of the following refers to proof of property ownership?

Accepted Answer

A title is a legal document that provides proof of ownership of a property.

Question 2

Which of the following is an exception for withdrawing money early from your IRA without penalty?

Accepted Answer

All of these answer choices are correct. The IRS allows penalty-free withdrawals from an IRA for a first-time home purchase, qualified education expenses, and in the event of death or disability.

Question 3

Which of the following refers to a legal entity that holds property and assets for someone or some group?

Accepted Answer

A trust is a fiduciary arrangement that allows a third party, or trustee, to hold assets on behalf of a beneficiary or beneficiaries. It is specifically designed to hold property and manage assets for the benefit of someone else.

Question 4

Which of the following refers to owning property with another person?

Accepted Answer

The answer of Which of the following refers to owning...

Question 5

You will incur a penalty if you withdraw money from your IRA before what age, unless it meets an exception?

Accepted Answer

The standard age at which you can start withdrawing money from your IRA without incurring a penalty is 59½, unless the withdrawal meets certain exceptions.

Question 6

Which of the following refers to when your employer makes your retirement plan distribution directly to an IRA?

Accepted Answer

A direct rollover refers to the process where the employer directly transfers the distribution from a retirement plan to an IRA or another retirement plan, without the funds being given to the employee to deposit.

Question 7

Which of the following refers to the court-supervised process of distributing assets and paying debts after someone's death?

Accepted Answer

Probate is the legal process through which a deceased person's estate is properly distributed to heirs and designated beneficiaries and any debt owed to creditors is paid off.

Question 8

Which of the following refers to owning property with your spouse?

Accepted Answer

Tenancy by the entirety is a form of concurrent ownership that is available only to married couples. It includes a right of survivorship, meaning that upon the death of one spouse, the surviving spouse automatically becomes the sole owner of the property.

Question 9

Which of the following refers to a form of earnings from investments?

Accepted Answer

Interest, dividends, and capital gains are all forms of earnings that can be generated from investments. Interest is earned from bonds or savings accounts, dividends are distributed from profits by companies to their shareholders, and capital gains arise from selling an investment at a higher price than its purchase price.

Question 10

Which of the following refers to owning property as the sole owner?

Accepted Answer

Fee simple refers to the most complete ownership of property possible, where the owner has the absolute right to use the property as they see fit, subject to any legal restrictions. This type of ownership does not end upon the owner's death and can be transferred to heirs.

Question 11

How much is the penalty for withdrawing funds from your IRA early?

Accepted Answer

The penalty for withdrawing funds from your IRA before the age of 59½ is 10%.

Question 12

How is the money taxed that is withdrawn from a traditional IRA during your retirement?

Accepted Answer

Withdrawals from a traditional IRA during retirement are taxed as ordinary income, reflecting the fact that contributions to a traditional IRA are typically made with pre-tax dollars, and taxes are deferred until the money is withdrawn.

Question 13

Mia contributed $100,000 to a Roth IRA. She retired at age 61 and would like to withdraw the funds. She is in the 15% federal marginal tax bracket. How much will she pay in income taxes on the funds?

Accepted Answer

Withdrawals from a Roth IRA are tax-free if the account has been open for at least five years and the account holder is at least 59½ years old. Since Mia is 61 and assuming the account has been open for at least five years, she will pay $0 in income taxes on the funds.

Question 14

Which of the following refers to an account that includes a designation of one or more beneficiaries who will receive the assets when the account owner dies?

Accepted Answer

The answer of Which of the following refers to an...

Question 15

Which of the following refers to owning property equally with another person and each of you has the rights of survivorship?

Accepted Answer

Joint tenancy with right of survivorship allows two or more people to own property equally, and upon the death of one owner, the deceased's share automatically passes to the surviving owner(s).

Question 16

Mia contributed $25,000 to a Roth IRA. She retired at age 60 and would like to withdraw the funds. She is in the 25% federal marginal tax bracket. How much will she pay in income taxes on the funds?

Accepted Answer

Roth IRA contributions are made with after-tax dollars, meaning the contributions and their earnings can be withdrawn tax-free in retirement, as long as certain conditions are met. Since Mia is over 59 1/2 years old and has likely met the five-year holding period, she will not owe any taxes on her withdrawals.

Question 17

How is the money taxed that is withdrawn from a Roth IRA during your retirement?

Accepted Answer

Withdrawals from a Roth IRA during retirement are not taxed, provided certain conditions are met, because contributions to a Roth IRA are made with after-tax dollars.

Question 18

Which of the following refers to an account that includes a designation of one or more beneficiaries who will receive the assets when the account owner dies for brokerage account assets?

Accepted Answer

Transfer on death (TOD) is a designation that allows brokerage account assets to be transferred directly to named beneficiaries upon the account owner's death, bypassing probate.

Question 19

Which of the following refers to owning property with your spouse and residing in a designated state that allows this special form of titling?

Accepted Answer