CIFC Flashcards_Units 6 to 11

Question

This type of fund invests in commercial and residential NHA mortgages. a) Real Estate fund b) Commodity Pool c) Mortgage fund d) LSIF

Answer 1

c) Mortgage fund

Answer 2

c) NHA mortgages

Answer 3

a) Rental income and capital gains

Answer 4

Tactical The two strategies that can be used in a balanced fund are strategic or tactical. Strategic must rebalance back to the target mix when changed to the holding take it out of range. Tactical will allow the fund to stay out of the target allocation range for the short term.

Answer 5

c) Dividend funds

Answer 6

b) False They don't distribute losses. Only seg funds can do this.

Answer 7

c) Return of capital

Answer 8

b) Pooled Funds Pooled funds are discussed on page 227. This is listed as one of their characteristics. (Note: Hedge funds are another fund that doesn't require a prospectus)

Answer 9

c) Mortgage, Bond, Global, International

Answer 10

1. rental income from properties held 2. Capital gains from property value appreciation

Answer 11

Because asset allocation funds can take a more aggressive approach investing in only one asset class if they wish.

Answer 12

a commodity pool

Answer 13

c) Mortgage funds

Answer 14

Because the fund manager doesn't have to make any investment decisions, they need only buy what is in the index.

Answer 15

Because all income is distributed monthly.

Answer 16

b) False Dividend funds invest in dividend paying stock. The fortunes of the companies invested in depend not only on the how the stock market does but how the companies themselves do. Just because the market is up, does not mean all companies stocks are up

Answer 17

Global funds invest in Canadian and US securities, International funds don't

Answer 18

-Interest from money market securities and bonds held -Dividends from stocks held -Capital gains from stocks held and maybe from bonds

Answer 19

b) a bond fund

Answer 20

b) lower than

Answer 21

I) Expected returns on a balanced fund should be higher than returns on money market funds II) When interest rates fall, balanced funds should outperform equity funds

Answer 22

Because it lacks diversification

Answer 23

Because mortgages have shorter maturities than bonds and Mortgage funds invest only in NHA insured mortgages lessening default risk.

Answer 24

a) higher than

Answer 25

b) Index Fund

Answer 26

a) Global Equity Fund Global Equity Funds are more risky as they have more exposure to additional risk from foreign exchange rates, political instability, and economic risk.

Answer 27

30% on maximum of $5000 investment (15% from Federal (up to 2017), 15% possible form Provincial)

Answer 28

Index Funds

Answer 29

Any Three of: - ETFs sell on secondary mkt - ETF price is usually lower than NAVPU - ETF prices change throughout the day - ETF sales have commission charges - ETFS are sold/ bought at bid/ask

Answer 30

They have investment restrictions that limit purchasers to "accredited investors" with high minimum investment.

Answer 31

It is the requirement on a hedge fund to perform with positive returns in ANY market.

Answer 32

Canadian Investment Funds Standards Committee

Answer 33

d) Canadian Dividend fund

Answer 34

Strategic allocation continuously rebalances back to the strategic mix. Tactical will allow the mix to stay out of alignment for the short term then will rebalance back to the strategic mix.

Answer 35

d) They provide poor returns during market downturns.

Answer 36

b) They rely on the manager’s stock-picking abilities.

Answer 37

c) gross profit margin ratio

Answer 38

a) It should outperform the market by 100%. The market or index to which a fund is compared is given a beta equal to 1. If a fund has a beta of 2, its price is expected to rise or fall by twice as much as the overall market. In other words, it should outperform (or underperform) the market by 100%.

Answer 39

a) The price per unit will decrease in value equivalent to the distribution. When a mutual fund distributes its earnings out to unitholders, it lowers its net asset value. This in turn, lowers its net asset value per unit (or price). In essence, the price will decrease in value equivalent to the distribution.

Answer 40

a) fundamental Fundamental analysis focuses on looking at the fundamentals of a company such as revenues, assets, profits, and competitive position. Fundamental analysts use a company's financial statements as a major source of information. However, they may also speak with its management, customers and suppliers to get a better picture of a company's situation. They also consider macroeconomic factors such as the economy, inflation and interest rates and how those factors could impact a company’s earning potential.

Answer 41

b) income statement A company's net profit or loss is shown on its income statement. The purpose of the income statement is to show the revenue and expenses of a company for the fiscal year. If revenues exceed expenses, there will be a net profit. If revenues are less than expenses, the company will show a loss.

Answer 42

b) $1,100 Connie's original investment is $1,000, calculated as (100 units x $10 NAVPU). The total distribution is $100, calculated as (100 units x $1 per unit). When the distribution is reinvested Connie receives 10 additional units, calculated as ($100 ÷ $10 NAVPU). Therefore, she has a total market value of $1,100, calculated as [(100 units + 10 units) x $10 NAVPU on December 15].

Answer 43

b) Investors are willing to pay $20 for every $1 of earnings of current income of Richtree. P/E ratio is an important valuation ratio. A higher P/E ratio exhibits investor confidence in the company. It measures the investment value of a security in comparison to its share price. Profitability ratios are important to help determine whether a company is making money or not. However, these ratios do not relate back to the share price. Portfolio Managers examine the current as well as future expected profit data when analyzing ratios for investment purposes.

Answer 44

a) passive management With a passive investment strategy, the portfolio manager is relying less on his or her stock-picking skills and more on the ability to track the underlying benchmark closely. The rationale behind this is the belief that over the long term, it is very difficult for individual portfolio managers to outperform the market as a whole.

Answer 45

c) Unanticipated inflation is an example of systematic risk. Systematic risk is also referred to as market risk. It affects everyone and cannot be avoided. Systematic risks include interest rate changes, unanticipated inflation, recession and wars. Systematic risk can be compared to the risk of bad weather. In the event of an earthquake, everyone is vulnerable to it and there is no way it can be stopped.

Answer 46

d) technical Technical analysis is also known as charting. Technical analysts rely heavily on charts to identify patterns or indicators to predict future price movements.

Answer 47

b) top-down The top-down approach begins with looking at the overall economy and current market trends to determine the industries, markets and/or countries that are expected to perform well. Then the portfolio manager narrows it down further to pick individual companies that they believe will outperform its competitors.

Answer 48

b) It is the value of owner's investment in the company plus retained earnings

Answer 49

d) Standard deviation

Answer 50

a) Regardless of whether Sylvia chooses to reinvest her distributions or take cash, her portfolio value will remain unchanged.

Answer 51

a) Balance sheet

Answer 52

a) Current ratio

Answer 53

simplified prospectus

Answer 54

b) +44,300,000 issued bonds $45,000,000 Financing paid dividends $700,000 Financing Sold a building for $5,000,000 Investing received dividends on shares held in XYZ co $500,000 Investing Bought an industrial 3d printer $6,500,000 Investing Total Cash flow from FINANCING activities: $45,000,000 -$700,000 = $44,300,000

Answer 55

b) Net Profit

Answer 56

a) This item is found in the retained earnings statement and reflects all cash outflows to common and preferred shareholders in the form of dividends.

Answer 57

a) bottom up

Answer 58

a) the same or lower

Answer 59

b) This entry appears on the balance sheet to offset the value of assets intended for long term use. It appears in the fixed assets section

Answer 60

d) uncollected income

Answer 61

c) Balance sheet

Answer 62

d) Company A is more risky than Company B overall and exhibits more market volatility Standard deviation measures total risk (unique plus market) while Beta measures market risk only.

Answer 63

4,615,384.62 Income before tax - Income before tax x tax rate = After tax amount X- X(.35)= $3,000,000 .65X = $3,000,000 X = 3,000,000 / .65 X = $4,615,384. 615

Answer 64

c) Debt / Equity

Answer 65

c) Business

Answer 66

c) operating, financing, and investing

Answer 67

c) systemic risk The risk that a single event, such as a failure of an institution, can trigger a domino effect.

Answer 68

c) Technical analysis is interested only in past trends and market activity for a stock

Answer 69

c) This is the annual compound return that would have been earned if you had invested in the fund last year and reinvested any of your earnings.

Answer 70

a) This would appear in the investing section of the statement as a subtraction

Answer 71

b) Market risk

Answer 72

Shareholder's Equity

Answer 73

fundamental

Answer 74

profitability

Answer 75

b) This statement shows what a company owns and owes as of a certain date c) This statement must always balance or there is a mistake

Answer 76

c) Operating Income

Answer 77

cost or current market value whichever is lower

Answer 78

net income

Answer 79

in the notes to the statements

Answer 80

Current yield (simple interest) And Effective yield (compound interest)

Answer 81

The Total Rate of Return assuming any distributions paid were reinvested in the fund.

Answer 82

Comparison to past years' results And Comparison to the industry average

Answer 83

b) current liabilities

Answer 84

c) retained earnings

Answer 85

market risk, interest rate risk, and currency risk

Answer 86

Operating Financing Investing

Answer 87

Income from something other than normal operations such as sale of property or interest income from investments

Answer 88

Liquidity Profitability Debt and Equity Valuation

Answer 89

It drops by the amount of the distribution

Answer 90

-2% to 18%

Answer 91

c) equal to

Answer 92

a) longest

Answer 93

b) gross profit margin

Answer 94

c) Financing activities

Answer 95

c) Unsystematic

Answer 96

Growth At A Reasonable Price Combines Value and Growth strategies

Answer 97

b) The auditor is required to confirm annually that proper valuation techniques were employed. The auditor is meant to preserve the integrity of the financial reports and eliminate any real or perceived imbalances in the reporting. Mutual funds, like public corporations, must be audited by an independent auditor and comply with International Financial Reporting Standards (IFRS).

Answer 98

c) Any mutual fund investment she makes would be held by a custodian, separate and apart from the investment fund manager. By law, the investment fund manager cannot commingle (mix) fund assets with any other assets that they own or administer. To ensure this, the mutual fund assets are held by a third party or custodian. An independent auditor must regularly review the operations of a mutual fund and its manager. As described above, there is also no commingling of mutual fund assets with the mutual fund dealer. OBSI only resolves disputes between clients and their firms. The independent review committee's role is to oversee potential conflict of interest decisions involving the manager of an investment fund.

Answer 99

c) All investors must receive the fund facts document before placing a mutual fund order. The main disclosure documents prepared by a mutual fund are: a Fund Facts document for every class or series of a mutual fund the simplified prospectus the annual information form annual and interim financial statements annual and interim management reports of fund performance An investor must receive the Fund Facts document within two days of buying a mutual fund. All other documents are available to clients upon request.

Answer 100

b) $240 Janet redeemed her mutual fund in the 3rd year. The first year ran from January 23, Year 1 to January 22, Year 2. The second year also ran from January 23, Year 2 to January 22, Year 3. Janet redeemed her units on January 23, Year 3 so she was into her third year, therefore, she paid $240 in fees, calculated as (original value x % DSC) or ($6,000 x 4%). Note that in this case the DSC was based on the original purchase price. In other cases, it could be based on the proceeds at redemption.

Answer 101

a) 256.9565 Phuong's purchase price for her mutual fund is $5.84, calculated as ($5.75 NAVPU ÷ (1 – 1.5%)). She will receive 256.9565 units, calculated as ($1,500 ÷ $5.84). Note: To receive an accurate calculation, do not clear your calculator. Otherwise, you will incur a rounding error.

Answer 102

c) to review any and all conflict of interest matters and proposed actions that it receives from the investment fund manager The role of the IRC is to review any and all conflict of interest matters and proposed actions that it receives from the investment fund manager. Conflicts of interest are defined in principles-based terms in National Instrument 81-107 Independent Review Committee for Investment Funds.

Answer 103

b) Although there is a lifetime maximum contribution limit of $50,000 per beneficiary, there is no annual limit. As a subscriber, you contribute to an RESP for the benefit of your designated beneficiary(ies). You may contribute a lifetime maximum of $50,000 per beneficiary. There is no annual limit. Your contributions are not tax deductible. If the designated beneficiary does not proceed to a post-secondary institution, contributed principal is returned to the subscriber without any tax implications. CESGs are available to all qualified beneficiaries despite family income; however, low income families may receive a greater amount of CESG.

Answer 104

b) NAVPU equals total assets minus total liabilities divided by units outstanding. The formula for net asset value per unit is total assets minus total liabilities divided by units outstanding. Assets of the fund include the fund's investment portfolio, cash and near-cash investments as well as accounts receivable from dealers. Liabilities include expenses incurred, dividends paid to investors and redemption amounts.

Answer 105

b) $9,024 John Smith withdraws $9,024 in the first year, calculated as follows: Step 1: Determine the purchase price. Given the 4% front-end sales commission, the purchase price for John's units is $10.42, calculated as ($10 NAVPU ÷ (1 – 4% front-end sales charge)). Step 2: Determine the number of units purchased net of commission charges. John purchases 9,600 units, calculated as ($100,000 ÷ $10.42). Note: To receive an accurate calculation, do not clear your calculator. Otherwise, you will incur a rounding error. Step 3: Determine the number of units redeemed via 8% ratio withdrawal plan. John will redeem 768 units, calculated as (9,600 x 8%). Step 4: Determine the amount withdrawn. John will receive a total of $9,024, calculated as (768 units x $11.75 NAVPU).

Answer 106

d) $15,200 For next year, Clarence’s TFSA contribution room is: In respect of next year 5,000 In respect of the total withdrawal 5,200 In respect of unused contribution room this year 5,000 Total $15,200

Answer 107

c) Proprietary

Answer 108

a) $25 per month

Answer 109

b) independent review committee

Answer 110

a) There are times when not all of a distribution paid to MF unit holders is taxable Switching will retain the same fee schedule

Answer 111

c) Custodian

Answer 112

c) Series T

Answer 113

a) Using the average price for the trading day for all actively traded securities held

Answer 114

b) transfer agent

Answer 115

c) The accounting firm of KPMG with S/E of $35 million Accounting firms are not listed as acceptable custodians regardless of the size of their S/E. They would only be acceptable if they were an affiliate of a bank or trust company and since this is not stated, you can't assume it.

Answer 116

c) By Thursday of next week Purchased @ 10pm so will be processed on Monday when the price is set for Monday. T+3 = Monday + Three business days so; Thursday

Answer 117

d) Ratio withdrawal plan

Answer 118

voluntary accumulation plan

Answer 119

c) $5.12 ($45,000,000 - $23,000,000) / $4,300,000 = $5.11627 = $5.12

Answer 120

c) MF trusts do not have a board of directors

Answer 121

b) Haley who is a buy and hold investor who trades very little

Answer 122

d) He will be penalized 1% of the over contributed amount each month and his contribution limit will be reduced by the over contributed amount the next year unless the over-contributed amount is removed before the end of the year.

Answer 123

b) $16,000 2012 $5000 max contribution 2013 $5500 max contribution 2014 $5500 max contribution Since Raj hasn't made any contributions yet, he can contribute the total of all maximum contribution from the time he turned 19 until the contribution is made. so a total of $16,000.

Answer 124

a) Brokerage Fees

Answer 125

a) $200,000

Answer 126

b) Trailer Fee

Answer 127

d) Low load sales charge For a client like Sandra who who is going to hold her investment for a long time, a declining sales fee schedule is best because the DSC reduces over time and if she holds it for over 7 years by the time she takes the money out there will be no fee charged. However, Sandra wants to take the funds out in 4 years. so the Low Load sales fee is best because its like a DSC but the fee starts lower and the schedule is shorter.

Answer 128

d) $925 Because the contributor is considered low income and is receiving the child benefit, they qualify for CESG, ACESG and CLB: CESG = $1500 x .2 = $300 ACESG = $500 x .2 = $100 Total CESG = $400 PLUS Canada Learning Bond = $500 +$25 = $525 Total = $925

Answer 129

c) Every Year that the client holds the fund

Answer 130

d) How the Dealer is Compensated

Answer 131

b) $200 June 1, 2016 - May 31 2017 - in the first year In the first year June 1, 2017 - May 31 2018 - in the first year In the 2nd year June 1, 2018 - May 31 2019 - in the first year In the 3rd year June 1, 2019 - May 31 2020 - in the first year In the fourth year The fee according to the schedule for a withdrawal in the fourth year is 2.5% Fee = $8000 x .025 = $200

Answer 132

c) $7200.00

Answer 133

b) False It isn't a requirement for it to be supplied but it must be available.

Answer 134

a) The contributor is refunded their contributions tax free but must pay tax on the earnings received by the plan at their marginal rate.

Answer 135

c) Distributors

Answer 136

Custodians hold all cash and securities for the fund. They accept funds and distribute income for the fund.

Answer 137

d) Mutual fund corporation investments usually sell at less than NAVPS

Answer 138

d) Thursday March 11th

Answer 139

Series T Fund

Answer 140

They are responsible to oversee potential conflicts of interest in decisions made by the fund manager.

Answer 141

b) Investment Fund Manager

Answer 142

In the simplified prospectus

Answer 143

c) custodian

Answer 144

MER, because it includes the management fee plus other expenses

Answer 145

Because MER does not include commissions or load charges and redemption fees or fees paid directly to the dealer.

Answer 146

Brokerage fees or trading fees

Answer 147

The fund manager pays the trailer fee to the fund distributors

Answer 148

The value at redemption or The amount originally invested

Answer 149

b) commission based model The fee based model would be expensive for someone who didn't trade much. They would pay less if they paid per trade

Answer 150

b) Right to Cancel the agreement

Answer 151

b) Material Change Report

Answer 152

The Additional Canada Education Savings Grant 20% paid to lower income contributors on first $500 contributed per year 10% paid to middle level contributors on first $500 contributed per year

Answer 153

It must be repaid to the government

Answer 154

a) She can start receiving her pension anytime between ages 65 and 70 even if she continues to work. She can apply for her pension anytime between ages 60 and 70. There is no requirement to stop working in order to receive the benefits. If she waits until after age 65 to collect her pension the benefit amount rises by 0.7% per month for each month past her 65th birthday. CPP benefits are not subject to any clawback of benefits.

Answer 155

a) Contributions are made by the employee and the employer, or solely by the employer. Defined benefit plans may be financed solely by the employer, or through contributions made by both employee and employer. Since the employer guarantees a defined benefit at retirement, the employer assumes the investment risk. Benefit amounts may be calculated based on a flat rate, best or last years, or average career methods. Retirement benefits are taxable.

Answer 156

b) Group RRSP contributions via payroll deductions result in immediate tax savings. If you contribute to an individual RRSP, you can claim a tax deduction for the contribution and then receive a tax refund after filing a tax return for the year. If you contribute the same amount to a group RRSP, contributions are made via payroll deductions. Based on your marginal tax rate (MTR), your employer withholds less tax each month from your pay. Instead of waiting for your tax refund, you receive immediate tax savings. Effectively, by waiting for your tax refund, you have given an interest-free loan to the government. Employer contributions are optional. All contributions to group RRSPs impact an individual's RRSP contribution room. The amount of investment alternatives depends on the plan, but typically, group RRSPs have fewer investment alternatives. The employee accepts all the risk in either a group or individual RRSP.

Answer 157

a) He must acquire his home by Oct 1, Year 2. Robert must complete the transaction by October 1st of the year after the withdrawal. He will be required to repay the amount in 15 equal instalments. No interest is required to be paid on the withdrawal. His first HBP repayment must be made at the latest on Mar 1, Year 4. If Robert is married, his spouse can also withdraw up to $25,000 from his or her RRSP.

Answer 158

b) Ellie controls the investments within her LIRA. Like an RRSP, Ellie controls the investments within her LIRA. Unlike an RRSP, she cannot make any contributions to the plan, withdraw from it, or convert it to a RRIF. Generally, she may not access these funds until retirement She may convert her LIRA to a life income fund (LIF) or locked-in retirement income fund (LRIF) to provide a life income.

Answer 159

c) Paulette cannot receive any OAS benefits because she is not 65 years of age. Paulette must be 65 years of age before she can qualify for OAS benefits. She will not receive the full benefit since she has not lived in Canada for 40 years since being 18 years of age but will qualify for partial benefits.

Answer 160

a) The pension adjustment is based on the amount of employer and employee contributions for the year. A defined contribution pension plan defines the contribution that an individual and his or her employer will make each year before the employee’s retirement. The pension adjustment is based on these contributions. Employer contributions are not dependent on the profitability of the company but rather the pension guidelines specified by the plan. The employee is not guaranteed a particular benefit at retirement. The amount available for retirement is instead dependent on how well the investments are managed.

Answer 161

b) Simone must withdraw a minimum payment from her RRIF beginning next year. In the initial year of her RRIF, Simone is not required to withdraw a payment. She may delay the withdrawal until the following year. There is no maximum withdrawal limit, she is free to withdraw any amount she wishes. Contributions to a RRIF are prohibited.

Answer 162

b) March 1 of the following year If you want to deduct your contribution in the current taxation year, you must make the contribution within 60 days of the end of the year. The last day that Ian can contribute to the spousal RRSP and use the deduction for his the current year’s tax return is March 1, of the following year, calculated as 31 days in January + 28 days in February + 1 day in March.

Answer 163

c) They are managed by the investor. Self-directed RRSPs offer investors a wide variety of investment options. The investor is able to choose any combination of investments to meet his or her needs. The self-directed RRSP does not provide a guaranteed return. Instead it is dependent upon how the underlying investments perform. A trustee, such as a trust company, bank, or investment company administers the plan.

Answer 164

d) employer only

Answer 165

b) an addition of .7% per month above age 65

Answer 166

a) $5760 $9000 - ($9000 x .36) ----. reduction is 36% at age 60 = $9000 - $3240 = $5760

Answer 167

$46,305 Thomas has worked for 30 years to date. in 5 years when he retires, he will have 35 years of service. His average final 3 years salary is: (72,000 + $73500 + $75000) /3 = $73500 Based on a 1.8% accrual rate, his pension will be: ($73500 x .018 x 35) = $46,305/year

Answer 168

a) III and IV only

Answer 169

c) Contributions are made with after tax dollars but earnings grow tax free in the plan. The text states that contributions are tax deductible which means they are made with before tax dollars since they receive a tax rebate on their contribution.

Answer 170

c) OAS plus GIS

Answer 171

b) The corporation and the employee contribute to the plan Only the employer may make contributions

Answer 172

a) Defined Contribution Pension

Answer 173

a) OAS is indexed for inflation

Answer 174

$2,945.25 You were given the YMPE of $53,000. You are expected to know the YBE of $3500 Susanna's CPP Contribution = (53,000 - 3500) x .0595 = $2945.25

Answer 175

$23,500 Income earned above OAS + GIS: $13,000 Clawback = $13,000 /2 = $6500 Myrtle will receive: $13,000 + $10,000 + ($7000 - $6500)= $23,500 per year.

Answer 176

a) % per year of service based on total salary received during all years of employment There is no calculation based on total salary over all years.

Answer 177

b) Only OAS and CPP are taxed GIS is not taxed.

Answer 178

$11,550 The pension adjustment on a defined benefit pension is calculated as: (9 x accrual rate x salary) - 600 For Thomas this calculates out to : (9 x .018 x $75000) - 600 = $11,550

Answer 179

$825 For every $1.00 over the threshold, the clawback is $0.15. Amount over the threshold: $68,500 - $63,000 = $5,500 $5500.00 x .15 = $825 clawback.

Answer 180

a) II and III only You must be a Canadian resident, not a Canadian citizen. To be eligible for the full OAS benefit, you must have lived in Canada for at least 40 years after age 18

Answer 181

d) Someone over the age of 40 earning $100,000 per year

Answer 182

b) Nothing. They don't belong to him

Answer 183

a) Employee can choose the plan provider

Answer 184

Maxwell can contribute $70,000 x .18 = $12,600 to RRSPs where he is the contributor. (his RRSP or her spousal RRSP) Patricia can contribute $45,000 x .18 = $8,100 to RRSPs where she is the contributor (her RRSP or his spousal)

Answer 185

d) 15 years

Answer 186

2022-01-01 If your client’s spouse or common-law partner makes a withdrawal from a spousal plan in the year in which they contribute to that spousal plan, or in the preceding two calendar years (also known as 2+ years), the withdrawal is taxed in the contributor’s hands.

Answer 187

a) $8,500 $100,000 x .18 = $18,000 (below the max so allowed all of this) minus PA of $8000, minus PSPA of $2500 plus PAR of $1000 = $8500.00

Answer 188

b) $20,000 $10,000 maximum per year to a maximum of $20,000

Answer 189

d) A 1% per month penalty on any amount over $2000 beyond the allowed contribution amount The $2000 overcontribution is allowed over a lifetime. Anything beyond that has to be taken out or you pay the 1% tax penalty on the excess amount each month. (until the next year gives yo room for the excess in your new allowed contribution)

Answer 190

c) LRIF Yes! Locked in funds have to remain locked in and dispersed over time. They can also be rolled into a LIF, PRIF, or Life Annuity. All of these are locked in a provide income over time.

Answer 191

c) $6500.00 The DPSP contribution is the amount of her Pension adjustment so it will reduce her RRSP contribution limit. $13,5000 - $7,000 = $6,500

Answer 192

$73,050, $10,549 Employment income = $60,000 Rental income = $14,400- $1,350= $13,050 Total earned income = $73,050 Investment income is not earned income so is not included. Contribution limit = .18 x 73050 = $13,149 (vs max of $20,000 so can use all) Minus PA of $5400, minus PSPA of $200 plus carryforward of $$3000 Total contribution allowed = $10,549

CIFC Flashcards_Units 6 to 11

(254 cards)