Concept explainers
a
Introduction:Transfer of assets from one retirement plan to another retirement plan by a taxpayer is known as rollovers. This transfer can be accomplished in two ways, rollover of the distribution, in whole or in part to an IRA or any other qualified plan, and direct transfer, also known as a trustee-to-trustee transfer.
The amount T receives from blue fund IRA.
b
Introduction:Transfer of assets from one retirement plan to another retirement plan by a taxpayer is known as rollovers. This transfer can be accomplished in two ways, rollover of the distribution, in whole or in part to an IRA or any other qualified plan, and direct transfer, also known as a trustee-to-trustee transfer.
The amount T must contribute to the green fund to avoid having taxable income and penalties for early withdrawal.
c
IntroductionTransfer of assets from one retirement plan to another retirement plan by a taxpayer is known as rollovers. This transfer can be accomplished in two ways, rollover of the distribution, in whole or in part to an IRA or any other qualified plan, and direct transfer, also known as a trustee-to-trustee transfer.
The last date T can roll over the amount received into green fund IRA to avoid
d
Introduction:Transfer of assets from one retirement plan to another retirement plan by a taxpayer is known as rollovers. This transfer can be accomplished in two ways, rollover of the distribution, in whole or in part to an IRA or any other qualified plan, and direct transfer, also known as a trustee-to-trustee transfer.
The amount T would receive in the distribution fromthe employer’s qualified retirement plan.
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Chapter 9 Solutions
Income Tax Fundamentals 2020
- Minnie owns a qualified annuity that cost 78,000. The annuity is to pay Minnie 650 per month for life after she reaches age 65. Minnie turns 65 on September 28, 2019, and receives her first payment on November 1, 2019. a. How much gross income does Minnie have from the annuity payments she receives in 2019? b. Shortly after receiving her payment on October 1, 2034, Minnie is killed in an automobile accident. How does the executor of Minnies estate account for the annuity on her return for the year 2034? c. Assume that the accident does not occur until November 1, 2043. How does the executor of Minnies estate account for the annuity on her 2043 return?arrow_forwardOwen, who is single, contributed $6,500 to his Roth IRA for 2023. He had MAGI of $17,000 for 2023 and used the single filing status. Owen has never taken a distribution from a retirement plan. What is his maximum retirement savings credit for 2023? 1. $0. ii. $200. ili. $1,000. iv. $2,000.arrow_forwardAt the end of 2017, Erin was 74 years old and her traditional IRA had a balance of $300,000. She properly withdrew $12,605 from her IRA in 2018, which was the first year she took a withdrawal. In 2018, her IRA assets earned $37,500. What amount must Erin take as a distribution from her IRA in 2019? Some other amount. $14,768. $13,651. $14,187arrow_forward
- On December 25, 2019, Ms. Smith gives Charity Z 1,000 shares of stock that she bought originally for $9,000. No restrictions were placed on this donation. The governing board does not want to speculate on investments. Thus, it has a policy to sell all donated investments as soon as received. These 1,000 shares are sold on December 26, 2019 for their fair value of $28,000. How does Charity Z report these events on a statement of cash flows? Select one: a.As a $28,000 cash inflow from an investing activity. b.As a $28,000 cash inflow from an operating activity. c.As a $9,000 cash inflow from a financing activity and a $19,000 cash inflow from an investing activity. d.As a $9,000 cash inflow from an operating activity and a $19,000 cash inflow from an investing activity.arrow_forwardIan retired in June 2019 at the age of 71. Ian’s retirement account was valued at $490,000 at the end of 2018 and $500,000 at the end of 2019. He has had all of his retirement accounts open for 15 years. What is Ian’s required minimum distribution for 2020 under each of the following alternative scenarios? Ian’s retirement account is a traditional 401(k) account. Ian’s retirement account is a Roth 401(k) account. Ian’s retirement account is a traditional IRA. Ian’s retirement account is a Roth IRA.arrow_forwardEnrico, a retired attorney age 72 in 2023, would like to postpone distributions from his traditional IRA as long as possible. At what age will Enrico be required to take a minimum distribution? A) Age 72 B) Age 70 ½ C) Age 73 D) There is no age for required minimum distributions for retired individuals.arrow_forward
- Ian retired in June 2019 at the age of 71. Ian’s retirement account was valued at $490,000 at the end of 2018 and $500,000 at the end of 2019. He has had all of his retirement accounts open for 15 years. What is Ian’s required minimum distribution for 2020 under each of the following alternative scenarios? (Leave no answer blank. Enter zero if applicable.) (Use Exhibit 13-3) Ian's retirement account is a traditional 401(k) account. Ian's retirement account is a Roth 401(k) account. Ian's retirement account is a traditional IRA. Ian's retirement account is a Roth IRA.arrow_forwardSamantha Montgomery (age 42) is employed by Canon Company and is paid an annual salary of $62,430. She has just decided to join the company's Simple Retirement Account (IRA form) and has a few questions. Answer the following for Montgomery: Round your answer to the nearest cent. a. What is the maximum that she can contribute into this retirement fund? $fill in the blank 1 b. What would be the company's contribution? $fill in the blank 2 Note: For items c. & d. below, round interim amounts to two decimal places. Use these values in subsequent computations then round final answer to two decimal places. c. What would be her weekly take-home pay with the retirement contribution deducted (married, 2 allowances, wage-bracket method, and a 2.3% state income tax on total wages)? Click here to access the Wage-Bracket Method Tables. $fill in the blank 3 d. What would be her weekly take-home pay without the retirement contribution deduction? $fill in the blank 4arrow_forwardMabel is 45 and earned $30,000 in 2018. If she contributed $6,000 to her traditional IRA, what would be her excise penalty? . Hannah, age 56, earned $58,000 in 2018. She is also a participant in a qualified plan to which she contributed $18,500. How much can she contribute to a traditional IRA in 2018? $6,500 b. $5,500 c. $0 she is ineligible d. $7,000 In question 3 above, would her contribution to a traditional IRA be tax-deductible? Yes b. No If you own a Roth IRA, are you subject to Required Minimum Distributions? Yes b. No Bernice is age 54 and her granddaughter, age 18, will be attending UMSL in the Fall 2018. Bernice would like to withdraw $15,000 from her traditional IRA to pay for some of her granddaughter’s college expenses. She asks if this withdrawal can be made without a 10% penalty. You tell her: No way b. no 10% penalty c. tax on withdrawal and 10% penalty d. none of these answers. Gus is 72 and works part-time earning $16,000 per year. He asks you whether he…arrow_forward
- Individual Income TaxesAccountingISBN:9780357109731Author:HoffmanPublisher:CENGAGE LEARNING - CONSIGNMENT