Retirement Flashcards
415 Limits
Limits annual contributions to $66,000 or 100% of compensation
Question on Retirement 9-19
Keogh Rules
For Self employed/independent contractors!!
Using Net Schedule C Income:
* 15% contribution: multiply by 12.12%
* 25% contribution: multiply by 18.59%
Funded non-qualifed deferred comp
- Beyond the reach of employer insolvency and bankrupcy
Unfunded non-qualified deferred compensation
- owned by employer and subject to creditors
- employee has no access
- No tax deduction for contributions until the employee is taxed (constructive receipt)
What would be treated as add back for purposed of the AMT?
Stock option add back for AMT
bargain element = excess of fair market value of the stock at the exercise date over the option (exercise price)
Money Purchase Plans
- Guarantee a contribution
- flexibility for age weighting or integration
ESOPs
- Invest primarily in employer securities
- cannot be integrated with Social Security
- Distributed in stock
Borrowing for Loan
- IRA assets would be disqualified
- No loan deduction if munis are pledged
Retirement Final Exam #19
Secular Trust
Features
- corp can deduct in current year
- irrevocable (funded), not subject to corp bankrupcy or creditors
- can be funded w/ various investments
Deductability of:
Travel Related Expenses
If:
* Employee of taxpayer
* bonafide business travel
* expense is otherwise deductible
Surving Spouse benefits w/ child-in-care
- ends when child turns 16, unless child is disabled
- child can get benefits until 18 (19 if in HS)
Spousal Benefits
- Must not be remarried
- if remarried, must be married for 12 months
- Widow benefits: can receive if remarried after 60
Parent Benefits (SS)
- can receive if parent was getting at least 1/2 of their support from the decedent
Portfolio Immunization
Attempts to balance price and reinvestment risk.
gives protection against changes in interest rate risk
Wash Sale
Basis = Cost Basis + Disallowed Loss
