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Mabel 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 can contribute funds to a Roth IRA. You reply:

Yes, Roth IRA allow contributions after age 70 and ½

No, Roth IRA are just like traditional IRAs. No contributions after the year in which you attain 70 and ½.

Can an owner of a traditional IRA invest his IRA funds into a mutual fund investing in gold?

Yes b. No

Janet just came back from South Africa and was impressed with the South African coin, the Krugerrand. She decides to use her Roth IRA money to invest in the Krugerrand. What are the consequences to Janet of her investment?

no consequences

the investment is a deemed distribution subject to taxes and 10% penalty

Albert is 62 and decides to take a distribution of \$12,500 from his Roth IRA. The funds in the Roth IRA were contributed 7 years ago. Is this a qualified distribution?

a Yes    b. No

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Step 1

Mabel is 45 and earned \$30,000 in 2018.  If she contributed \$6,000 to her traditional IRA, what would be her excise penalty?

In  2018, a person can contribute the lesser of \$5,500 or taxabale compensation to traditional IRA if their age is less than 50 years.

Since Mabel's age (45) is less than 50, the max...

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