Question 1

Clay changes jobs in 2014 and decides to roll his $50,000 retirement plan balance from his old employer's plan into an IRA. He instructs the trustee of the retirement plan to transfer the money directly to the IRA he has chosen.
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What are the tax consequences of the transfer to Clay? Explain.

Accepted Answer

The answer of Clay changes jobs in 2014 and decides...

Question 2

Debbie is 63 years old and retired in 2012. She receives Social Security payments of $12,000 a year and interest income of $30,000. She wishes to put the maximum allowed into an IRA. How much can she contribute to her IRA?

Accepted Answer

The answer of Debbie is 63 years old and retired...

Question 3

Penny, age 52, takes a distribution of $30,000 from her Traditional IRA account. She plans to deposit it in an IRA with a different bank. Shortly after the distribution she drives her car through the front window of her credit union in a freak accident, and uses the funds to pay for the damages. What income and/or penalties related to the failed rollover must she show on her tax return ?

Accepted Answer

The answer of Penny, age 52, takes a distribution of...

Question 4

Chorisia Corporation has a Section 401(k) plan for its employees. The plan provides for maximum contributions equal to 15 percent of the employee's salary. Donna, a 55-year-old employee of Chorisia Corporation, elects to contribute the maximum amount possible to the Section 401(k) plan. During 2014, Donna has $115,000 in wages. For 2014, what is the maximum amount that Donna may contribute to the plan on a tax-deferred basis?

Accepted Answer

The answer of Chorisia Corporation has a Section 401(k) plan...

Question 5

Tony makes a maximum contribution to his employer's 401(k) plan. He earns $60,000 a year. How much income is he allowed to contribute to the plan for 2014?

Accepted Answer

The answer of Tony makes a maximum contribution to his...

Question 6

Serissa Corporation has a Section 401(k) plan for its employees. The plan provides for a maximum contribution equal to 15 percent of the employees' salaries. Scott, an employee of Serissa Corporation, elects to contribute the maximum amount possible to the Section 401(k) plan. During 2014, Scott has $40,000 in wages. For 2014, what is the maximum amount that Scott may contribute to the plan on a tax-deferred basis?

Accepted Answer

The answer of Serissa Corporation has a Section 401(k) plan...

Question 7

What is the difference between the tax treatment of contributions and distributions from a traditional IRA and a Roth IRA?

Accepted Answer

The answer of What is the difference between the tax...

Question 8

John is a single 40-year-old landscape architect earning $125,000 a year and is not covered by a pension plan at work. How much can he put into a Traditional IRA in 2014?

Accepted Answer

The answer of John is a single 40-year-old landscape architect...

Question 9

What is the maximum amount a 55-year-old taxpayer and a 48-year-old spouse can put into a Traditional or Roth IRA for 2014, assuming they earn $85,000 in total and are not participants in pension plans?

Accepted Answer

The answer of What is the maximum amount a 55-year-old...

Question 10

Ben is a 19-year-old single software inventor earning $200,000 a year and is not covered by a pension plan at work. How much can he put into a Roth IRA in 2014?

Accepted Answer

The answer of Ben is a 19-year-old single software inventor...

Question 11

Christine is a self-employed graphics artist who has net earned income of $160,000 from her business. Christine has a defined contribution Keogh Plan and plans to contribute the maximum allowable. How much can Christine contribute?

Accepted Answer

The answer of Christine is a self-employed graphics artist who...

Question 12

Johnice's employer contributes $3,000 to a qualified retirement plan in 2014 for Johnice's retirement.
a.Is the $3,000 deductible by Johnice's employer in 2014? Explain.
b.Is the $3,000 income to Johnice in 2014? Explain.
c.Is either the interest or dividend earnings on the $3,000 contribution taxable to Johnice in 2014? Explain.

Accepted Answer

The answer of Johnice's employer contributes $3,000 to a qualified...

Question 13

Ralph has a $130,000 IRA with the Red Association. For personal reasons, he decides to move his funds to the Blue Association. He requests that his funds be distributed to him on August 20, 20xx.
a. What amount will Ralph receive from the Red Association?
b. What is the last day Ralph can deposit the funds from the Red Association and avoid taxation in the current year?
c. If the funds were distributed from a qualified retirement plan (not an IRA), how much would Ralph receive?
d. Assuming the funds were distributed from a qualified retirement plan, not an IRA, how much will Ralph have to contribute to the Blue Association to avoid taxable income and any penalties?

Accepted Answer

The answer of Ralph has a $130,000 IRA with the...

Question 14

Barrett is a 45-year-old political commentator who has self-employed net earned income of $170,000 in 2014. What is the maximum amount he can contribute to his simplified employee pension (SEP) for the year?

Accepted Answer

The answer of Barrett is a 45-year-old political commentator who...

Quiz 4: Business Income and Expenses, Part II

Clay changes jobs in 2014 and decides to roll his $50,000 retirement plan balance from his old employer's plan into an IRA. He instructs the trustee of the retirement plan to transfer the money directly to the IRA he has chosen. What are the tax consequences of the transfer to Clay? Explain.

Debbie is 63 years old and retired in 2012. She receives Social Security payments of $12,000 a year and interest income of $30,000. She wishes to put the maximum allowed into an IRA. How much can she contribute to her IRA?

Tony makes a maximum contribution to his employer's 401(k) plan. He earns $60,000 a year. How much income is he allowed to contribute to the plan for 2014?

What is the difference between the tax treatment of contributions and distributions from a traditional IRA and a Roth IRA?

John is a single 40-year-old landscape architect earning $125,000 a year and is not covered by a pension plan at work. How much can he put into a Traditional IRA in 2014?

What is the maximum amount a 55-year-old taxpayer and a 48-year-old spouse can put into a Traditional or Roth IRA for 2014, assuming they earn $85,000 in total and are not participants in pension plans?

Ben is a 19-year-old single software inventor earning $200,000 a year and is not covered by a pension plan at work. How much can he put into a Roth IRA in 2014?

Christine is a self-employed graphics artist who has net earned income of $160,000 from her business. Christine has a defined contribution Keogh Plan and plans to contribute the maximum allowable. How much can Christine contribute?

Barrett is a 45-year-old political commentator who has self-employed net earned income of $170,000 in 2014. What is the maximum amount he can contribute to his simplified employee pension (SEP) for the year?

Quiz 4: Business Income and Expenses, Part II

Clay changes jobs in 2014 and decides to roll his $50,000 retirement plan balance from his old employer's plan into an IRA. He instructs the trustee of the retirement plan to transfer the money directly to the IRA he has chosen. ​ What are the tax consequences of the transfer to Clay? Explain.

Debbie is 63 years old and retired in 2012. She receives Social Security payments of $12,000 a year and interest income of $30,000. She wishes to put the maximum allowed into an IRA. How much can she contribute to her IRA?

Tony makes a maximum contribution to his employer's 401(k) plan. He earns $60,000 a year. How much income is he allowed to contribute to the plan for 2014?

What is the difference between the tax treatment of contributions and distributions from a traditional IRA and a Roth IRA?

John is a single 40-year-old landscape architect earning $125,000 a year and is not covered by a pension plan at work. How much can he put into a Traditional IRA in 2014?

What is the maximum amount a 55-year-old taxpayer and a 48-year-old spouse can put into a Traditional or Roth IRA for 2014, assuming they earn $85,000 in total and are not participants in pension plans?

Ben is a 19-year-old single software inventor earning $200,000 a year and is not covered by a pension plan at work. How much can he put into a Roth IRA in 2014?

Christine is a self-employed graphics artist who has net earned income of $160,000 from her business. Christine has a defined contribution Keogh Plan and plans to contribute the maximum allowable. How much can Christine contribute?

Barrett is a 45-year-old political commentator who has self-employed net earned income of $170,000 in 2014. What is the maximum amount he can contribute to his simplified employee pension (SEP) for the year?

Clay changes jobs in 2014 and decides to roll his $50,000 retirement plan balance from his old employer's plan into an IRA. He instructs the trustee of the retirement plan to transfer the money directly to the IRA he has chosen. What are the tax consequences of the transfer to Clay? Explain.