CHAPTER 19--DEFERRED COMPEN

Brown inc uses the two to six year graded vesting

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51. Brown, Inc., uses the two-to-six-year graded vesting approach for its retirement plan. Joey has five years of service completed as of March 10, 2010, his employment anniversary date. Determine Joey’s nonforfeitable percentage. A. 40%. B. 60%. C. 80%. D. 100%. E. None of the above. 5
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52. Mary, who is retired, reaches age 70 1/2 in 2010, and she will also be age 71 in 2010. She has a $170,000 balance in her traditional IRA. If her life expectancy is 15.3 years, what distribution, if any, must be made by April 1, 2011? 53. Jackie, age 52, is the sole remaining participant of a money purchase pension plan. The plan is terminated and a $200,000 taxable distribution is made to Jackie. The early distribution penalty tax, if any, for 2010 is: 54. Philip, age 68, has accumulated $829,000 in a defined contribution plan, $107,000 of which represents his own contributions. If the entire amount is distributed in 2010, his excise tax on the distribution is: 55. In 2010, Grady Corporation paid compensation of $46,600 to the participants in a profit sharing plan. Grady contributed $13,100 to the plan. Grady’s deductible amount and any contribution carryover are as follows: A. $0 deductible; $13,100 carryover. B. $8,940 deductible; $4,160 carryover. C. $11,175 deductible; $1,925 carryover. D. $11,650 deductible; $1,450 carryover. E. None of the above. 56. Jermaine is a self-employed accountant with gross earned income of $130,000 for the tax year (after the deduction for one-half of any self-employment tax). He has a profit sharing plan (e.g., defined contribution plan). What is the maximum amount Jermaine can contribute to his retirement plan? 57. The compensation paid by Antawn Corporation to the plan participants of a profit sharing plan in 2010 was $41,200. During 2010, Antawn Corporation contributed $10,700 to the plan. Antawn’s deductible amount for 2010 is what amount, if any? 6
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58. A participant, who is age 38, in a cash or deferred arrangement plan [§ 401(k)] may contribute up to what amount in 2010? 59. Merrill is a participant in a SIMPLE § 401(k) plan, and he elects to contribute 4% of his $40,000 compensation to the account, while his employer contributes 3%. What amount will vest immediately, if any? A. $0. B. $1,200. C. $1,600. D. $2,800. E. None of the above. 60. Susan is a self-employed accountant with a qualified defined contribution plan (a Keogh plan). She has the following income items for the year: Earned income from self-employment $50,000 Dividend income 8,000 Interest income 2,000 Net short-term capital gain 12,000 Adjusted gross income 72,000 What is the maximum amount Susan can deduct as a contribution to her retirement plan in 2010, assuming the self-employment tax rate is 15.3%?
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  • Spring '12
  • honig
  • a. b. c., b. c. d., C. D. E.

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