Table of Contents

Course Learning Objectives. v

Introduction. v

Important Note About the DOL Fiduciary Rule. v

Chapter 1 Qualified Retirement Plans. 9

Chapter Learning Objectives. 9

Introduction. 9

Defined Benefit Plans. 9

Defined Benefit/401(k) Plans. 10

Defined Contribution Plans. 11

Individual Participant Accounts Characterize Defined Contribution Plans. 11

Target Benefit Plans. 12

Target Benefit Plan Investment Risk. 12

Target Benefit Plans Favor Older Plan Participants. 13

Profit Sharing Plans. 13

Traditional Profit Sharing Plans. 13

Age-Based Profit Sharing Plans. 13

401(k) Plans. 14

403(b) Tax Sheltered Annuity Plans. 15

Simplified Employee Pension (SEP) 15

Savings Incentive Match Plan for Employees (SIMPLE) 15

Summary. 16

Chapter 1 Review Questions. 18

Chapter 2 Tax Treatment of Qualified Plans. 19

Chapter Learning Objectives. 19

Introduction. 19

Contributions to Qualified Employee Plans. 19

Employer Plan Contributions. 19

Defined Benefit Plan Limit on Deductible Employer Contributions. 19

Defined Contribution Plan Limit on Deductible Employer Contributions. 20

Employee Plan Contributions. 20

403(b) Plan Contribution Limit Increased for Long-Service Employees. 21

Catch-up Contributions for Participants Age 50 or Older 21

Designated Roth Accounts. 21

Life Insurance in a Qualified Employee Plan. 22

Requirements for Plan Life Insurance. 22

Life Insurance Premiums. 22

Distributions from a Qualified Employee Plan. 23

Cost Basis in a Qualified Employee Plan. 23

How Benefits are Distributed. 24

Lump Sum Plan Distributions. 24

Plan Distributions as Periodic Payments. 24

Fully Taxable Periodic Payments. 24

Partly Taxable Periodic Payments. 24

Figuring the Tax-Free Part of Periodic Payments Simplified Method. 25

Figuring the Tax-Free Part of Periodic Payments General Rule. 27

Early Distributions. 28

Required Minimum Distributions. 28

Plan Distributions of Non-Cash Assets. 29

Rollovers. 29

Distributions Ineligible for Rollover 30

Direct and Indirect Rollovers. 30

Plan Loans. 31

Specific Repayment Term Required. 31

Substantially-Level Amortization Required. 31

Maximum Loan Amount Limited. 31

Loan Agreement Required. 32

Death Benefits. 32

Roth Account Distributions. 32

Qualified Roth Distributions Tax-Free. 32

Nonqualified Roth Account Distributions. 33

Summary. 33

Chapter 2 Review Questions. 35

Chapter 3 - Annuities. 36

Chapter Learning Objectives. 36

Introduction. 36

Deferred Annuity. 36

Immediate Annuity. 36

Qualified Annuity. 36

Nonqualified Annuity. 37

Death Benefits. 37

Annuitization Methods. 37

Temporary Annuity. 37

Life Annuity. 38

Nonqualified Annuity Income Tax Treatment 39

Premiums. 39

Cash Values. 39

Ownership by Non-natural Persons Generally. 39

Ownership by Natural Persons and Certain Trusts. 40

Surrenders and Withdrawals. 40

Charges Against Cash Value for LTC Premiums Not Currently Taxable. 40

Annuity Loans. 41

Premature Distributions. 41

Annuity Payments During Lifetime. 41

Fixed Annuities. 42

Variable Annuities. 42

Annuitants Death After Annuity Starting Date. 42

Contract Owners Death Before Annuity Starting Date. 43

Estate Taxation of Annuities. 43

Summary. 43

Chapter 3 Review Questions. 45

Answers to Chapter Review Quizzes. 46

Final Examination. 62

CPASelfstudy.com Course Evaluation. 67