The owner of an IRA, age 45, has contributed $10,000 into the account and the IRA is now worth $20,000. The owner is going to convert the entire $20,000 into a Roth IRA. What are the tax consequences of this conversion? Show Recommended textbook solutions
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Terms in this set (41)An insured under a life insurance policy has been diagnosed with a terminal illness and has 6 months to live. The insured knows that his financial state will worsen even more with the upcoming medical expenses. What option could the insured utilize? Viatical settlement Who is a third-party owner? A policyowner who is not the insured Which of the following insurance arrangements will be appropriate for a parent buying a life insurance policy on a child where the parent is the policyowner? Third-party ownership What is the name of the insured who enters into a viatical settlement? Viator All of the following are examples of third-party ownership of a life insurance policy EXCEPT An insured borrows money from the bank and makes a collateral assignment of a part of the death benefit to secure the loan. Which of the following best defines the "owner" as it pertains to life settlement contracts? The policyowner of the life insurance policy In a life settlement contract, whom does the life settlement broker represent? The owner Which of the following terms means a result of calculation based on the average number of months the insured is projected to live due to medical history and mortality factors? Life expectancy If an employee wants to enter the group outside of the open enrollment period, to reduce adverse selection, the insurer may Require evidence of insurability. What type of life insurance is most commonly used for group plans? Annually renewable term An employee is joining a group insurance plan. In order to avoid having to prove insurability, what must the employee do? Join during the open enrollment period All of the following statements are true regarding group insurance EXCEPT Participants in the policy each receive a policy. In group life policies, a certificate of insurance is given to Each insured person Which of the following statements about group life is correct? The cost of coverage is based on the ratio of men and women in the group. In a single employer group plan, what is the name of the policy issued to the employer? Master contract An employee quits his job and converts his group policy to an individual policy; the premium for the individual policy will be based on his Attained age. In order to qualify for conversion from a group life policy that has been terminated to an individual policy of the same coverage, a person must have been insured under the group plan for how many years? 5 years Which of the following employees insured under a group life plan would be allowed to convert to individual insurance of the same coverage once the plan is terminated? Those who have been insured under the plan for at least 5 years All of the following are characteristics of a group life insurance plan EXCEPT There is a requirement to prove insurability on the part of the participants. An employee is insured under her employer's group life plan. If she terminates her group coverage, which of the following statements is INCORRECT? The insured may choose to convert to term or permanent individual coverage. An employee is joining a group insurance plan. In order to avoid having to prove insurability, what must the employee do? Join during the open enrollment period What type of life insurance is most commonly used for group plans? Annually renewable term What percentage of a company's employees must take part in a noncontributory group life plan? 100% When an employee terminates coverage under a group insurance policy, coverage continues in force 31 days Which type of retirement account does not require the owner to start taking distributions at age 72? Roth IRA Which of the following would be considered a nonqualified retirement plan? Split-dollar plan Which of the following is NOT true regarding a nonqualified retirement plan? It needs IRS approval. For a retirement plan to be qualified, it must be designed for the benefit of Employees Which of the following is TRUE of a qualified plan? It has a tax benefit for both employer and employee. All of the following are general requirements of a qualified plan EXCEPT The plan must provide an offset for social security benefits. All of the following would be different between qualified and nonqualified retirement plans EXCEPT Taxation on accumulation Employer contributions made to a qualified plan Are subject to vesting requirements. The president of a manufacturing company has offered one of the company's officers a special individual annuity plan that is unavailable to lower-echelon employees. This plan would be funded with before-tax corporate dollars, and it does not meet government approval standards. This annuity plan is A nonqualified annuity plan. Which of the following is NOT true regarding a nonqualified retirement plan? It needs IRS approval. All of the following are general requirements of a qualified plan EXCEPT The plan must provide an offset for social security benefits. Traditional IRA contributions are tax deductible based on which of the following? Owner's income f a retirement plan or annuity is "qualified," this means It is approved by the IRS. A 60-year-old participant in a 401(k) plan takes a distribution and rolls it over to an IRA within 60 days. Which of the following is true? The amount of the distribution is reduced by the amount of a 20% withholding tax. Which of the following is an IRS qualified retirement program for the self-employed? Keogh plan Who may contribute to a Keogh (HR-10) plan? Self-employed plumber Who can make a fully deductible contribution to a traditional IRA? An individual not covered by an employer-sponsored plan who has earned income Students also viewedTaxes, retirement, and other insurance concepts47 terms incrediblejmurph Types of Health Policies85 terms Blace05 Field Underwriting Procedures61 terms Janelle_Blank Taxes, retirement, and other insurance concepts121 terms ashley_honeyman1 Other sets by this creatorFlorida Statues, Rules, and Regulations103 terms reynaga_emily2 social insurance34 terms reynaga_emily2 Health Insurance Policy Provisions, clauses and ri…30 terms reynaga_emily2 Types of Health Insurance Policies87 terms reynaga_emily2 Recommended textbook solutionsMathematics with Business Applications6th EditionMcGraw-Hill Education 3,760 solutions
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Using and Understanding Mathematics: A Quantitative Reasoning Approach6th EditionJeffrey O. Bennett, William L. Briggs 2,969 solutions Other Quizlet setsAP Human Geography Chapter 10: Test Review19 terms easterrrrrrPLUS BIOL 5500 Final Questions120 terms cam0179 Fatoumata002StudyJam29 terms Bae_Chick CEH Final Exam120 terms Wayahlife Which of the following retirement plans is a non qualified plan?Nonqualified plans include deferred-compensation plans, executive bonus plans, and split-dollar life insurance plans.
Which of the following is characteristic of a nonqualified plan quizlet?Nonqualified plans are characterized by the following: do not need to be approved by the IRS, can discriminate in favor of certain employees, contributions are not tax-deductible, and interest earned on contributions is tax-deferred until withdrawn upon retirement.
Which of the following is an example of a qualified retirement plan?Examples of qualified retirement plans include 401(k), 403(b), and profit-share plans. Stocks, mutual funds, real estate, and money market funds are the types of investments sometimes held in qualified retirement plans.
Which of the following are qualified plans quizlet?Defined benefit and Keogh plans are funded with pretax contributions and are thus qualified plans. Payroll deduction and deferred compensation plans are funded with after-tax contributions and are thus nonqualified plans.
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Which of the following would be considered a non qualified retirement plan quizlet?
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