Question

16. Dean has earned $74,750 annually for the past six years working as an architect for WCC Inc. Under WCC's defined benefit plan (which uses a 7-year graded vesting schedule) employees earn a benefit equal to 4.0% of the average of their three highest annual salaries for every full year of service with WCC. Dean has worked for six full years for WCC and his vesting percentage is 80%. What is Dean's vested benefit (or annual retirement benefit he has earned so far)?

MULTIPLE CHOICE

$17,940

$59,800

$14,352

$0

17. Jessica retired at age 65. On the date of her retirement, the balance in her traditional IRA was $218,000. Over the years, Jessica had made $21,800 of nondeductible contributions and $69,000 of deductible contributions to the account. If Jessica receives a $68,000 distribution from the IRA on the date of retirement, what amount of the distribution is taxable?

MULTIPLE CHOICE

$0

$6,800

$51,000

$61,200

68,000

18. Daniela retired at the age of 65. The current balance in her Roth IRA is $200,000. Daniela established the Roth IRA 10 years ago. Through a rollover and annual contributions Daniela has contributed $85,000 to her account. If Daniela receives a $55,000 distribution from the Roth IRA, what amount of the distribution is taxable?

MULTIPLE CHOICE

$0

$23,375

$31,625

$55,000

Answer 1

16)          Dean’s annual earning is $74,750

                He worked for Six years

                Average of three highest annual salary is (74750*3)/3 =$74,750

                Benefit is 4% and Dean’s vesting percentage is 80%

                Dean’s vested benefit for the six years is = 74750*4%*80%*6 = $14,352

17)          Sorry to say, I don’t know the Tax rates or tax consequences of foreign tax laws.

18)          Sorry to say, I don’t know the Tax rates or tax consequences of foreign tax laws.