An Enthusiast about Tax: Boomer Planning (Third Edition) (00124639, 2012)

This course provides an overview of major considerations boomers will face as they near retirement. Many of these considerations have been concerns for past generations and will be concerns of future generations. Other concerns have developed only lately and therefore involve a unique problem of carrying little precedent for guidance. In addition to covering the main points for all boomers to consider, this course explores three "hot" tax issues that have been in the news recently: How to minimize tax on what is many boomers' largest asset-their home; How to preserve employment-generated retirement savings either through a regular pension, a 401(k) plan, one or several IRAs, or a combination of vehicles; and How recent legal developments surrounding the rights of individuals in same-sex relationships have had an impact on the tax aspects of their retirement planning.

Final Exam > Results Page

final exam score:

100%

Question 1

Correct

Until the recent housing slump, which of the following have traditionally been the two greatest wealth-building assets of most workers going into post-work life?

Personal savings and stocks

Stocks and personal residence

Retirement plans and social security

(You Answered) (Correct Answer) Personal residences and retirement plans

Question 2

Correct

The type of retirement plan that is least well funded and is being offered by fewer and fewer U.S. employers is:

401(k) plan

Defined contribution plan

(You Answered) (Correct Answer) Defined benefit plan

IRA

Question 3

Correct

For individuals under age 50, the maximum dollar amount of annual contribution to an IRA for 2011 is:

$2,000

(You Answered) (Correct Answer) $5,000

$6,000

$7,000

Question 4

Correct

An individual who owns a residence is considered to have used it as a _______ _________ even though the spouse may have been granted use during a separation agreement or divorce decree.

(You Answered) (Correct Answer) Primary residence

Second home

Tax shelter

Divorce settlement

Question 5

Correct

The health safe harbor for home sale exclusion does not apply to the following circumstance:

Move to another state to take care of an ailing parent

(You Answered) (Correct Answer) For the general health and well-being of the taxpayer

Physician recommended change for health reasons

Move to facilitate treatment of disease

Question 6

Incorrect

All of the following statements about Roth IRAs are true except:

(Correct Answer) In 2011, a single individual with modified AGI of $130,000 can contribute to a Roth IRA.

An individual’s ability to make a contribution to a Roth IRA depends upon the amount of the individual's modified AGI

Appreciation in the Roth IRA may escape federal income tax when funds are withdrawn.

Contributions to a Roth IRA are not deductible for federal income tax purposes

Question 7

Correct

In general, a 10% penalty applies to distributions from an IRA before the participant reaches age:

(You Answered) (Correct Answer) 59½

70½

Question 8

Correct

For federal tax purposes, long-term care insurance contracts should stipulate that:

The contract has a cash surrender value

(You Answered) (Correct Answer) Expenses reimbursable by Medicare are not covered

The contract has a fixed, nonrenewable term

None of the above is a stipulation for tax purposes

Question 9

Correct

In order to be certified as "chronically impaired" by a healthcare practitioner under a tax-qualified long-term care contract, the policyholder must be unable to perform _____ of six activities of daily living and have a condition expected to endure for at least _____ days.

One; 60

(You Answered) (Correct Answer) Two; 90

Three; 120

Four; 365

Question 10

Correct

The Pension Protection Act of 2006 permits direct plan to Roth IRA rollovers effective after:

August 17, 2006

December 31, 2006

January 1, 2008

(You Answered) (Correct Answer) December 31, 2007

Question 11

Correct

An example of pension benefits not guaranteed by the PBGC is:

(You Answered) (Correct Answer) Disability benefits for disabilities occurring after the date of plan termination

Annuity benefits for survivors of plan participants

Lump-sum benefits of less than $5,000

All of the above are examples of nonguaranteed benefits

Question 12

Correct

Care provided by which of the following is not covered by long-term care:

A licensed nursing facility

(You Answered) (Correct Answer) Family members in one’s own home

Respite care

Care provided by a non-family member in one’s home

Question 13

Incorrect

Under a 2010 Administrator’s Interpretation of the Family and Medical Leave Act (FMLA):

(Correct Answer) An employee who assumes the role of caring for a child receives parental rights to family leave regardless of the legal or biological relationship.

The Department of Labor ruled that same-sex couples are afforded the same rights to care for a sick partner as heterosexual married couples.

The Department of Labor ruled that COBRA benefits are extended to same-sex couples

Same-sex couples are entitled to bereavement leave

Question 14

Correct

Social Security survivor benefits:

(You Answered) (Correct Answer) Are not available to widows or widowers of same-sex couples

Are available to widows or widowers but not ex-spouses of same-sex couples

Are available to same-sex partners and their families just as for married couples of opposite sexes

Are available to same-sex couples who registered more than ten years ago

Question 15

Correct

Allowable premiums for long-term care insurance are deductible for 2011 and 2012 if, along with other medical expenses, their total cost exceeds what percent of the covered individual's AGI.

(You Answered) (Correct Answer) 7.5