Question

1. Distributions from a qualified pension plan may be fully taxable, nontaxable, or a combination of both.

True or False

2. If a taxpayer funded some contributions to a qualified pension plan with previously-taxed dollars, then some of the distributions from that plan during retirement will be nontaxable.

True or False

3. Roth IRA withdrawals are deemed to first come from contributions followed by earnings.

True or False

4. Distributions from a Coverdell Education Savings Account are tax-free to the beneficiary if they are used for his or her qualified education expenses.

True or False

5. If a taxpayer pays for an annuity contract with after-tax dollars, all payments received under the contract will be tax-free until the original cost is recovered.

True or False

6. To calculate the taxable amount of an annuity payment, the taxpayer must determine the expected return under the contract.

True or False

7. Defined-contribution plans establish the amount of retirement benefits an employee will receive in retirement.

True or False

8. SIMPLE and SEP plans are subject to the same nondiscrimination rules that apply to other retirement plans.

True or False

Answer 1

1. False - distributions from qualified pension plan are fully taxable.

2. False - will be taxable.

3. True

4. True

5. True

6. True

7. True

8. True