Retirement Flashcards

Question

When must the first RMD be made?

Answer 1

By April 1 of the year following the year the participant turns 72 UNLESS they are still employed by the plan sponsor - in this case they can delay the first RMD until April 1 of the year after the participant terminates employment ---- This exception is not allowed if they own more than 5% of the company, it's a SIMPLE or a SEP

Answer 2

FMV of participants account at Dec 31 of the preceding / Distribution period determined based on the participants age at 12/31 of the distribution year

Answer 3

If you inherit an IRA, and you're not a spouse, you take the RMDs based on your life expectancy. They start in the year following death If you inherit an inherited IRA, you have the 10 year rule. Ex, spouse gets spouses IRA then dies and the inh IRA goes to their kid.. If no beneficiary, 5 years

Answer 4

Only life insurance may be included in a qualified retirement plan - no accident, severance, or health benefits may be offered under the incidental benefit rules. To qualify under the incidental benefit rules, the entire premium for universal life cannot exceed 25% of the employer's aggregate contributions, and 50% for whole life insurance.

Answer 5

Type of profit sharing plan

Answer 6

SERP supplements the pension plan without regard to limits imposed upon salary levels (i.e., maximum salary of $305,000 in 2022) or the maximum funding levels of Section 415.

Answer 7

INclude DB Pension Plans Include Cash Balance Pension plans -

Answer 8

Profit Sharing Plans are always Defined Contribution Stock Bonus ESOPs 401(k) Thrift Plans New Comparability plans Age Based profit sharing plans

Answer 9

end of tax year

Answer 10

Age 21 One year of service (1000 hours worked) EXCEPTION - can make it 2 years of service IF they are then 100% vested. Can't do this with a 401k

Answer 11

401k must allow LT PT employees participation if at least 500 hours for at least 3 years. Starts Dec 31 2020 --- so eligible in 2024

Answer 12

Twice a year, at least 6 months apart

Answer 13

Under 21 less than 1 year of work nonresident alien employees who are not in the US Part time employees that don't meet the 500/3 year rule You can exclude a whole group as long as it's not discriminartoy. Ex: Sales team

Answer 14

>5% owner this year OR last year. ALWAYS. Note GREATER THAN but not equal to 5% Compensation > $135k You can also elect to consider the top 20% as highly comped. THis would be useful if most employees made over $135k

Answer 15

DC: -- 3 year cliff -- 2-6 year graduated DB: -- 5 year cliff -- 3-7 year graduated

Answer 16

>5% >1% AND compensation over $150k An officer with comp over $200k

Answer 17

DC - when over 60% of account balance is attributable to key employees DB - >60% of accrued benefits attributable to key employees

Answer 18

Non-key employees must be provided with a contribution equal to at least 3% of key employee contribution (unless key employee contribution is less than 3%) DB- 2% DC- 3%

Answer 19

Non key employees must be provided with a benefit equal to 2% per year of service times employee average annual comp The vesting schedule must increase to 2-6 year graduated or 3 year cliff

Answer 20

$305k So if an employee makes $400k, only $305k is counted toward the 25% employer contribution

Answer 21

lesser of $245k (2022) or 100% of the average of the employees three highest years of salary

Answer 22

$61k or 100% emoployer compensation Employee can only contribute $20,500 + $6,500) You can have $61k in multiple plans IF they are not the same owner. In this case, your employee deferral limit is still $20.5k across all plans

Answer 23

Money Purchase Target Benefit

Answer 24

Defined benefit pension plan Cash balance pension plans

Answer 25

Type of DC pension plan Better for older employees Trying to get a specific benefit so the older the employee the more you need to put in favors older entrants Participant bears risk -- you only get based on how the investments perform! Actuary is required at inception

Answer 26

Cross between DB and DC because it relies on the cash accumulation Uses a 3 year cliff or better Requires an actuary every year DB Pension plan Mandatory funding Favors younger people bc cash has more time to accumulate Quasi separate account Pension benefit based on an annual gaurenteed contribution rate and gaurenteed earnings Guaranteed minimum investment return

Answer 27

Defined benefit Cash Balance target benefit

Answer 28

Excess: People who earn more than the social security wage base will get additional money added to their pension - DB and DC plans Offset: reduces the benefit to employees who earn less than the social security wage base - DB plans

Answer 29

Mandatory funding pension benefit based on defined funding formula - flat amount - flat percent formula - unit credit formula Commingeled accounts Favors older plan entrants Must meet eligibility/coverage/vesting rules

Answer 30

DC pension plan Mandatory annual funding of a fixed percentage of total employer covered - up to 25% Participant bears investment risk Seperate account Favors younger plan entrants

Answer 31

For DB plans only Employer must have more than 25 employees

Answer 32

EmployEE money goes in

Answer 33

- Contributions must be made by due date of income tax return - No company profit required - Contributions are discretionary but must be "Substantial and recurring" - limited to 25% of total employer covered comp - limited to the lesser of 100% of comp or $61k for 2022 per employee per year

Answer 34

Allows for segmentation based on roles.

Answer 35

corrective distribution (less likely) recatagorize the over contribution from prre-tax to after tax (via thrift not Roth) QNEC - Qualified Non Elective Contributions. Employer makes contribution to all eligible non-highly. 100% vested QMC - Qualified matching contribution Employer elects to match to all eligible employees that defer 100% vested

Answer 36

just coverage testing, no ADP or ACP

Answer 37

401k can be attached to it CODA are employee self-reliance plans

Answer 38

Big difference is about deduction and distributions - Tax deduction is the FMV of the stock at the date of the distribution - Employee uses NUA -Defined contribution profit sharing -Employee puts stock into the plan -Contributions are discretionary but must be substantial and recurring -Allocations to the plan must be nondiscriminatroy -Tax deduction for the FMV of the stock

Answer 39

Net Unrealized Appreciation Only usable on a lump sum distribution. NUA is equal to the FMV at date of distribution MINUS the value of the stock when the employer contributed it Not taxed on NUA until stock is later sold In the year of distribution, NUA gets LTCG, employer contributions (whatever they gave you) are taxed OI

Answer 40

Ex: Employer contributes $25k in stock, when you sell it it's only worth $20k $5k loss

Answer 41

25% for the first 5 years 50% of sixth and final year Can be satisfied with distribution, transfer to another plan, or by offering 3+ alternative investments Employee money can ALWAYS be diversified

Answer 42

- lump sum distribution - Rollover plan assets to IRA or other qualified plan - Leave assets in plan (value must be over $5k)

Answer 43

Lump sum distribution Rollover to IRA or other plan Qualified join survivor annuity or single life annuity

Answer 44

Typically ordinary income! If adjusted basis, the basis is tax free (thrift or annuity) If NUA, LTCG If QDRO, taxed later

Answer 45

ERISA protection 10-year forward averaging NUA options Pre-1974 cap gain treatment

Answer 46

Mandatory 20% withholding! IF you put money back in, you have to front the 20% and wait for your refund

Answer 47

Back in 5 years Mortgage loan can be 30 Termination cause loan to be due Must make periodic payments at least quarterly if you fail to repay it, taxable and penalty

Answer 48

Surviving spouse child of IRA owner who has not reached age of majority - Once they are AOM they are changed to designated bene Someone disabled or chronically ill Someone who is not more than 10 years younger than the employee

Answer 49

Balance must be paid in 10 years

Answer 50

May be distributed over the life of the eligible bene beginning the year following death Spouse can roll into their IRA

Answer 51

Follows pre-secure act rules If the original owner was taking RMDs - use owners age as of birthday in the year of death. Reduce by 1 for each subsequent year Can take owners RMD for year of death If the original owner was pre RMD Take entire balance by end of 5th year

Answer 52

W2 income Schedule C net income Income as a general partner Alimony for Pre 2019 divorce

Answer 53

If anything goes in QNEC, safe harbor, etc Any money but earnings

Answer 54

It must meet the 5 year rule Qualified Distribution must be - 59.5 - death - disability - first time home buyer Always comes out 1. contributions 2. conversions (5 year clock starts with conversion date) 3. earnings What about non-qualified distribution? (see chart)

Answer 55

Roth 401k - prorata taxed rather than FIFO Holding period for roth IRAs are combined, for Roth 401ks are individual

Answer 56

Life insurance collectibles coins (except for US eagles)

Answer 57

A retirement plan for small businesses Tax deferred growth NOT a qualified plan Unique Contribution, vesting, and distribution rules No catch up provision! Limited to 25% of employee comp or $61k (versus profit sharing which is 100% or $61k $305k covered comp limit

Answer 58

Benefits must be provided to all employees that - are at least 21 - received comp of at least $650 during the year - Performance of services 3-5 years So it's good for when you have employees that don't work more than 3 years. High Turnover

Answer 59

Employer Contributions are discretionary Must be made to ALL employees even if dead or no longer employed

Answer 60

Contribution rate to other participants / 1+contribution rate to other partcipants This is for people who are not getting w2 income Exl: .20/1+.20

Answer 61

Employees are 100% vested at all times Withdrawals get the same treatment as IRAs - ordinary income - 10% penalty when necessary

Answer 62

Multiple income by .9235 Multiple again by 7.65 (half of social security)

Answer 63

Small ermployer who has 100 or fewer employee who each earned at least $5k in the proceeding year Employer can't already have a qualified plan

Answer 64

5304 SIMPLE or 5305 SIMPLE Provide participants a 60 day period to elect deferral

Answer 65

earned $5k in any 2 preceding years and expected to earn $5k in the current year Always 100% vested

Answer 66

$14k + $3k catchup for age 50+

Answer 67

EITHER 1. matching contribution up to 3% -- this can be reduced for up to 2 years in a 5 year period if financial hardship --The match doesn't have a covered comp max --In a 401k, the SIMPLE does have a covered comp max of $305k 2. 2% non-elective employer contributions. 2% of covered comp for EACH eligible employee

Answer 68

Ordinary income May be rolled into a qualified plan or IRA May be subject to withdrawal penalties which are 25% rather than 10% if completed in the first 2 years

Answer 69

Public schools Educational organizations Tax exempt organizations

Answer 70

If there is an employer contribution Erisa does not apply if it's a government or church 403b

Answer 71

PLan must meet nondiscrimination test matching contributions must satisfy ACP test In 403bs, distributions options must include prertiremen annuities and qualified joint and survivor (doesn't apply to 401k)

Answer 72

21 1 year of service

Answer 73

For 403b plans MUST BE A HER - Health - Education - Religious Permits up to an additional $15k, (max $3k per year) - Must have completed 15 years of service - Must have unused deferrals

Answer 74

Insurance Annuity Contracts Mutual Funds NOT STOCK DIRECTLY

Answer 75

NON qualified Not a combined limit with 401k and other plans!! $20500 max + catch up Public and private options - Public is for Gov - private is for 501(c) companies -Public is protected by trust -Private is not protected No catchups with private 457s! Private can't rollover because it's not protected!

Answer 76

Three years prior to normal retirement age, the employee can defer an additional $20,500 Available for public and private 457 Limited to unused deferrals Can't combine this with the 50+ catchup

Answer 77

Not qualified can discriminate No employer deduction until employee includes income Taxable at constructive receipt

Answer 78

For deferred comp plans You are taxed based on whatever the employer gave you. Ex: Employer gives $10 worth of stock, you owe taxes on $10 -- ORDINARY If you get $10 of stock, but you paid $3 for it, taxed on $7

Answer 79

Used in a deferred comp plan

Answer 80

Used in deferred comp plans SOMETIMES funded Irrevocable trust Not taxed when money is put in Retirement payments subject to OI Funds are set aside for the executive. Not available to employer -- UNLESS bankruptcy and general creditors - Can't be held off shore - springing irrevocability possible in change of ownership (but not bankruptcy)

Answer 81

CAN - job training - life, sickness, and accident benefits - severance and supplemental unemployment CAN'T - Retirement benefits - Commuter benefits

Answer 82

You get fictional stock. Nothing is issued. The employer could 'give' you the full value of the stock, or partial value and you pay the difference. You're taxed ordinary income

Answer 83

The right to buy at a specified price within a specified time. Special tax advantaged treatment-- if you do it right you're only paying LTCG Owner of stock options are not obligated to buy the stock Only grantable to employees The aggregate FMV of an ISO grant must not exceed $100k per year per executive

Answer 84

$100k If you exercise more than $100k, then anything in excess is treated like a NQSO

Answer 85

No tax obligation when stock is granted, unless FMV is greater than exercise price No tax obligation at exercise (except AMT!) ISO is not subject to payroll tax, If ISOs are held 2 years from grant and 1 year after exercise to be taxed at LTCG If you don't hit the minimum 1 year/2 year, you must recognize what the employer gave you as OI, the rest is typical Cap Gain treatment "What employee gave you" is equal to FMV at grant minus what you paid Note: AMT Adjustment with ISOs!!

Answer 86

In an ISO you sell when you exercise OI on what employee gave you No gain or loss so nothing else to worry about NO AMT

Answer 87

Non-qualified stock options are taxed on the “bargain element” (difference between the market price and the strike price) as ordinary income when exercised. (Market Price – strike price) × Number of Shares × Tax Rate = Tax NQSO is subject to payroll tax Employer gets the deduction matching your OI Ex: Strike price $3, exercise price $10, sold LT @ $25 ---$7 ordinary income ---$15 LTCG

Answer 88

ISOs can't be gifted NQSO can be gifted only when employer allows it -- Employee always recognizes the income, not the person receiving the gift -- Giftee has basis equal to exercise price (because donee already paid)

Answer 89

Grant the holder cash in an amount equal to the excess of the FMV of the stock over the exercise price

Answer 90

You are requesting to be taxed when you are granted to stock This wouldn't make sense for someone who is not going to meet vesting requirements Must elect within 30 days of receiving the stock Write a letter to the IRS

Answer 91

employees purchase stock at a discount and might receive favorable tax treatment Discount can't be less than 85% of stock price - so 15% discount max. Exercise at the lesser of grant price or exercise price $25k limit on ESPP - $25k worth of shares (so you pay less because you're getting a discount)

Answer 92

If held 2 years from grant, 1 year from exercise, the discount is taxed at ordinary income If you don't hold it for 2/1 years, taxed at ordinary income + social security/payroll

Answer 93

Voluntary Employee Beneficiary Association When a company wants to put some money aside for future employee benefits. Employer is allowed to deduct what they contribute to the VEBA. Tax exempt moving forward so earnings on these contributions grow tax free employee does not recognize any income

Answer 94

Lean FIRE Barista FIRE Fat FIRE

Answer 95

The employer gets to avoid payroll tax on their contributions Employee still pays the payroll tax

Answer 96

ERISA protection that prohibits any action that would cause the plan assets to be assigned, garnished, levied, or subject to bankruptcy.

Answer 97

Determines who at the company is eligible for coverage from a plan can exclude: - ineligible employees (21 and 1 year) - union/collective bargain agreement - non resident alien employees - part time employees who don't meet eligibility under the secure act

Answer 98

always use the 2% or 3% top heavy formula! Ignore whatever formula they give you, unless it is greater than the top heavy result.

Answer 99

always use the 2% or 3% top heavy formula! Ignore whatever formula they give you, unless it is greater than the top heavy result.

Answer 100

The employEE contributes Non-contributory means that the employEE never contributes

Answer 101

A qualified participant may force investment diversification during the qualified election period Qualified participant is age 55 with 10+ years of participation The qualified election period is the 6 plan years beginning after becoming a qualified participant during these 6 years they - can diversify 25% of stock in years 1-5 - can diversify 50% of stock in year 6

Answer 102

If after age 59.5, can take in service withdrawals Death Disability Termination of service before retirement age: - Lump sum - rollover to IRA or other qualifies plan - leave assets in plan (if >$5k) Termination at normal retirement age: - Annuity - joint or single life - lump sum distribution - rollover

Answer 103

1. RMD table 2. Fixed amortization - use interest rate 3. fixed annuitization method - use annuity factor and mortality table

Answer 104

10% penalty unless: 59.5 Death Disability 72t MED EXPENSES $5k for birth or legal adoption Fed tax levey

Answer 105

Lose lump sum tax options (10-year forwarding average, pre - 1974 cap gains treatment, NUA) Loans aren't premitted lose ERISA

Answer 106

no But SS integration is allowed with a stock bonus plan

Answer 107

An employer's deduction for ESOP contributions and amounts made to repay interest on an ESOP's debt cannot exceed 25% of the participant's payroll

Answer 108

Roth 401k: The distribution must consist of basis and earnings on a pro rata basis. Roth IRA: Contributions come out first

Answer 109

Correct by: 1. Corrective distributions - decreases the ADP of HC 2. Recharacterization -change from pre tax to after tax 3. Make Qualified non-elective contributions (QNEC) - puts money into all eligible NHC accounts - 100% vested 4. Make Qualified Matching contributions - Match all NHC employees who elected to defer - 100% vested

Answer 110

If the employee reinvests the funds within 12 months, then they can defer gains

Answer 111

43 401k, 403B 457 SIMPLE TRADITIONAL IRA ROTH ESOP SARSEP -- however note that the 401k profit sharing component CAN be integrated with SS. The CODA part cant

Answer 112

Participants can demand a limited distribution of employer securities If they want periodic payments, he can elect for this but only for 5 years. - If his account is more than $1.23, he can extend the periodic payments 1 additional year for ever $245k. Up to 10 years -Not eligible for NUA Lump sum = NUA

Answer 113

Can force the company to diversify Must be at least 55 must have been in the plan for 10 years or more Must elect to diversify during the election period: the 6th plan year after becoming a participant If they elect this, - company must diversify 25% of the stock they got in years 1-5 - 50% of the stock from year 6 -It's based on actual shares rather than $$ --- so if they got 100 shares, they could diversify 25 of them If they diversify then they can take that 25% of shares and - take a distribution - transfer to another account - employer must offer three or more diversification options within the ESOP

Answer 114

If still working for the company - no in service withdrawals prior to 59.5 - unless death or disability if no longer working for the company, and not yet 59.5, your options are: - lump sum - roll to IRA or other qualified plan - leave assets in plan (if at least $5k) If no longer working for the company and over 59.5 - QJSA - Lump sum - Rollover plan assets to IRA * You need spousal agreement to not include them

Answer 115

You can take withdrawals after 2 years of participation At termination of service, you choose - lump sum - rollover - purchase an annuity

Answer 116

Ordinary income Subject to 20% income tax withholding Unless - rolled into an IRA or other qualified plan - QDRO into an IRA When you roll to an IRA you lose ERISA, 10 year forwarding average, NUA, Pre 1974 cap gains treatment

Answer 117

Balance <$20k - can take up tot $10k Balance $20-$100 - can take 50% of vested balance Loan may not exceed $50k IF there is an outstanding loan, reduce what they can take but the outstanding loan amount Must repay within 5 years Unless house, then 30 years Quarterly payments, must be substantially level amortization Failure to repay is a taxable distribution with possible penalty Repay in full if terminated. TCJA allows repayment before next tax return

Answer 118

10% penalty unless - rollover - death - disability - section 72t - substantially equal payments - med expenses over 7.5% - fed tax levy - $5k for birth or adoption - after 55 and separated from service (not allowed for IRA) Penalty exceptions allowed for IRAs only - health insurance for unemployed - higher edu - first time home purchase

Answer 119

Must be annually for the life expectancy or joint lives of participant and bene after separation of service must be made either for 5 years or until 59.5, whichever is longer

Answer 120

Note: 401k only, does not apply to IRA If you're still employed, and less than or equal to 5% owner, you can delay distributions Delay until 4.1 of the year after you terminate employment NOT ALLOWED FOR SIMPLES OR SEPS

Answer 121

It depends on the type of bene. 1. Eligible Designated benes - spouse, minor child 1.1: Dsitrubte the balance over life expectancy of the bene beginning the year following death 1.2 A spouse can roll it into their IRA 1.3 Child becomes a designated bene at age of majority 2. Designated bene - Anyone other than eligible - balance is paid within 10 years. (Secure act rules) 3. Non- designated benes - trusts, estates, charity, etc. Follow pre secure act rules - If RMD had started, Reduce owners age by 1 and take remaining RMD -If RMD has not started - take entire balance by end of 5th year following death

Answer 122

If they have a DB plan at work, they are active when - participation OR - meets eligibility Defined Contribution plan - Receives a contribution to the plan on his behalf, including forfeitures - Defers comp

Answer 123

The post tax contribution increases the basis of the account Withdrawals are then taxed based on the ratio of basis to FMV Basis portion is not taxed, the rest is OI

Answer 124

No RMD Qualified distributions are income tax free - five years AND - 59.5+, disability, death, home buyer ($10k) Non qualified distributions: Taxation: Contributions and conversions are still not taxed. Earnings are taxed. FIFO Penalty: -No penalty on contributions, ever - Penalty on conversions if w/in 5 years - penalty on earnings, unless death, disability, 59.5, house - No penalty if for education, med expenses over floor, adoption, 72t, med insurance premiums when unemployed

Answer 125

Contribution amount No phase out on 401k No home purchase allowed with 401k Non qualified distributions Taxed at a pro rata basis instead of fifo!!!!!

Answer 126

life insurance non us coins collectibles

Answer 127

Non Qualified Tax deferred growth Can be established as late as extended due date of tax return (IRA contributions stop at 4.15) Use traditional IRA accounts Employers contribute to all employees: - that are 21 - employed for the last 3 of 5 years - received comp over $650 Form 5305-SEP Employees must be notified Each employee gets a SEP IRA account Contributions: - employer only - discretionary - must be made to all employees even if they died or quit that year - max 25% of covered comp or $61k - CAN utilize pro rata or flat dollar - CAN SS integrate Self employed contributions are limited to the contribution rate to other participants/1+contribution rate to other participants So 25% to employees means 20% to employer for sole proprietor ' 100% vested Distributions - same as traditional IRA rules

Answer 128

Simple to establish/maintain Employee deferrals Calendar year plan Small employers only - 100 or fewer earning $5k+ last year CANT combine with a qualified plan Two types: 1. SIMPLE IRA 2. SIMPLE 401k - can take loans Eligible if earned at least $5k in any of the last 2 years Max $14k deferral plus $3k catch up Employer chooses match up to $305k covered comp: 1. dollar for dollar up to 3% 2. 2% non elective !!!!Tax deductible, tax deferred growth. BUT employee contributions are subject to payroll taxes! Withdrawals - OI - Rollover option - Don't require the 20% withholding !!!!25% penalty if the withdrawal is within the first 2 years of the employees participation in the plan!!! Otherwise same as IRA

Answer 129

Technically, non qualified For public schools and tax exempt orgs 5013c Although not qualified, ERISA applies to 5013c 403Bs - it does not apply to government or church 403bs ERISA applies when : - meets non discrimination tests AND - marching contributions satisfy ACP test - Plan must offer QJSA as well as Preretirement Joint and survivor annuities Eligibility: - 21 and one year Contributions same as 401k and combined with 401k !!!Only invest in insurance annuity contracts and mutual funds!!! !!!403B 15 year catch up rule!!! If the employee has been there at least 15 years, and they did not use their full elective deferral over those 15 years, they can increase their contributions up to $3k per year limited at $15k to catch up - HER organzations - Health, education, religion - Permits an additional $15k (max $3k per year) to the 403b - Must have completed 15 years of service with un Loans: only when an ERISA 403b, same rules as 401k Distributions: same as 401k

Answer 130

You are NOT considered an active participant for participation in other plans! Two types: 1. public - government employers - all employees participate - can rollover to 401k, 403b, 457 or IRA 2. private - tax exempt employers - assets not protected in trust - NO CATCH UP - Only rollovers to other 457s SPECIAL CATCH UP : 3 years leading up to retirement, can contribute an additional $20500 Also 457F - much more limited. for key employees No churches!

Answer 131

three years leading to normal retirement age, an employee may defer an additional $20,500 for 2022 to a 457B - both public and private - limited to prior unused deferral amounts - max contribution equals $41k

Answer 132

Key employees No catch up No rollovers Not protected by the trust Gov or 501c employers not eligibleW

Answer 133

$100 per day per participant

Answer 134

20 or more

Answer 135

Usually day 8 after sickness first day of accident Last no more than 6 months

Answer 136

NO! ISOs only have an employer deduction if they are non-qualifying disposition. Then they are taxed like NQSO

Answer 137

NOT ACTIVE for IRA deductibility unless forfeitures or employer contributions into their account

Answer 138

IRAs - NO 401ks - if the plan allows it

Answer 139

Not a qualified plan Used by small business and sole proprietors Easy to establish- they use IRAs Participation is anyone 21+ and 3 of the last 5 years employed! Only had to have made $650. So good for high turnover part time Can be funded as late as tax return plus extensions! Employer contributions based on a specific formula that doesn’t discriminate

Answer 140

Either ira or 401k Deferral limit at $14k! Less than 100 employees with 2 year grace period No other plans allowed!! 100% vested Ira match: 3%

Answer 141

Benefits payable from the disability policy will be offset by workers’ compensation benefits received.

Answer 142

A 457 plan in a non-governmental tax-exempt organization would be for a select group of highly compensated individuals and not for a teacher.

Answer 143

501(c)(3) State hospital Private school Public school BUT NOT FED GOVERNMENT

Answer 144

Increase the basis!

Answer 145

No! Just gov agencies and non profits

Answer 146

Yes! But still available to creditors. No constructive receipt

Answer 147

once you turn 65

Answer 148

Tax free return of principle LTCG on the gain Ordinary income on the interest Payments are broken down pro rata

Answer 149

An employee without creditable coverage can generally only be excluded by the group health insurance plan (if offered) for up to twelve months. The waiting period is reduced by the amount of "creditable coverage" at a previous employer. If the employee does not enroll in the group health insurance plan at the first opportunity, an 18-month exclusion period may apply. All three statements are true. If you have a pre-existing condition that can be excluded from your plan coverage, then there is a limit to the pre-existing condition exclusion period that can be applied. HIPAA limits the pre-existing condition exclusion period for most people to 12 months (18 months if you enroll late), although some plans may have a shorter time period or none at all. In addition, some people with a history of prior health coverage will be able to reduce the exclusion period even further using "creditable coverage." People with a history of prior health coverage will be able to reduce the exclusion period even further using "creditable coverage."

Answer 150

Pension plan with DC rules Employer contributes a % of employee income Employee directs the investments in their own account No min funding determined by actuary - just stick to the formula Jay establishes a Money plan that commits to a 2% contribution every year. Claire is able to direct the investments. Si

Answer 151

The first tier excise tax for prohibited transactions is 15% of the amount involved and is automatic even if the violation was inadvertent. The second tier excise tax is 100% of the amount involved and is assessed if the prohibited transaction is not remedied. There are no income taxes applied; all remedies are made through restitution and excise taxes.

Answer 152

in a corporaiton no step up in basis proceeds not included in GE

Answer 153

non contributory - employEEs do not contribute contributory - employEEs do contribute

Retirement Flashcards

(192 cards)