AWMA Questions And Answers With Verified Study Quiz
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Course
AWMA
Institution
AWMA
AWMA Questions And Answers With Verified Study Quiz
Corporations receive a partial exemption for income tax purposes ANS Dividend income from investments in other companies (70,80,100% tiers)
profit-sharing plan ANS incentive pay in which payments are a percentage of the organization's profit...
AWMA Questions And Answers With Verified Study
Quiz
Corporations receive a partial exemption for income tax purposes ANS Dividend income from investments in
other companies (70,80,100% tiers)
profit-sharing plan ANS incentive pay in which payments are a percentage of the organization's profits and do
not become part of the employees' base salary. Employer contributes 0-25% of covered payroll, individual may not
exceed lesser of 100% of company or $66k. (Defined contribution plan)
SIMPLE ANS For 100 or less employees. Retirement plan allows for elective contributions from employer +
employee max of $15.5k (each). Age 50+ additional $3k catchup allowed. 2 year rollover holding period required
Liability Umbrella ANS umbrella policies (both personal and commercial) are purchased to provide excess
liability coverage to an insured party.
Private placement life insurance ANS individually tailored variable life insurance policies not subject to SEC
registration requirements and designed specifically for and available only to certain qualified investors. To purchase,
the individual must qualify as accredited investors or qualified purchases.
Modified Endowment Contract (MEC) ANS A life insurance policy under which the amount a policy owner
pays in during the first 7 years exceeds the sum of net level premiums that would have been payable to provide paid-
up future benefits. Once classified as such it cannot be undone and any withdrawals from policy may be subject to a
10% early withdrawal penalty
Leveraged ESOP ANS the trust borrows against the company's future earnings in order to buy the organization's
stock. And as debt is repaid, employees receive shares of stock from trust
Most used exit plan (41% of the time). Typically done by gradually selling ownership. ANS Transfer to insiders
Not required to make estimated tax payments if pay ANS 90% of current year tax liability or 100% of tax from
prior year (only applies to individuals that have AGI under $150k Married)
Underpayment Penalty ANS If a taxpayer did not pay enough tax on a timely basis during the year, he may be
required to pay an underpayment penalty. 25% of the required annual payment.
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