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Question 1

A 529-state-approved Individual Retirement Account (IRA) permits parents to invest tax-free dollars into their children’s college education fund (this money may only be used for educational expenses). Another popular plan, the Roth IRA, requires after-tax dollars to be invested in a savings fund that may (or may not) be used for paying future college expenses. Both plansare tax free when the money is eventually withdrawn to assist with college expenses. Clearly, the 529 IRA plan is a better way to save for college expenses than the Roth IRA. Quantify “better” when the marginal income tax rate is 28% and $10,000 each year is invested in a mutual fund earning 8%per year for 10 years. Note: The estimated cost of a college education 10 years from now is $110,000.

For the following scenarios, compute the maximum total deductible contribution to a traditional IRA for 2023. Traditional IRA a. Juan, age 41, earns a salary of $58,000 and is not an active participant in any other qualified plan. His wife, Agnes, generates no earned income. b. Abby, age 29, reports earned income of $45,000, and her husband, Sam, reports earned income of $4,600. They are not active participants in any other qualified plan. Leo's employer makes a contribution of $3,500 to Leo's simplified employee pension plan. Leo is single, he reports earned income of $70,000, and his AGI is $55,000. $ Contribution 6,000 X 10,600 X 6,000 X

Linda, age 58, contributed $3,000 to her traditional IRA in 2022. If her permitted Roth IRA contribution is not reduced because of her income, what is the maximum amount she can contribute to it in 2022?.

21.Interest from which of the following types of bonds is included in federal taxable income? State of California bond City of New Orleans bond Bond of the Commonwealth of Puerto Rico S. Treasury Bond All of the above are excluded from income 39.Kate acquires a principal residence in 2016 for $200,000 secured by a $180,000 mortgage. In 2020, Kate catches the coronavirus and misses work for 3 months. Her employer stops paying her after 10 days. In 2020 when the mortgage balance is $170,000, Kate and the bank revise her terms and lower the loan balance to $150,000. The market value of the home remains above $200,000. How much cancellation of debt income will Kate recognize? $0 $20,000 $10,000 $150,000 $170,000

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Enrico, a retired attorney age 72 in 2023, would like to postpone distributions from his traditional IRA as long as possible. At what age will Enrico be required to take a minimum distribution? A) Age 72 B) Age 70 ½ C) Age 73 D) There is no age for required minimum distributions for retired individuals.

Problem 13-67 (LO 13-4) (Algo) (The following information applies to the questions displayed below.] In 2023, LeSean (age 54 and single) has earned income of $3,600. He also has $32,200 of unearned (capital gain) income. Problem 13-67 part a (Algo) a. If he does not participate in an employer-sponsored plan, what is the maximum deductible IRA contribution LeSean can make in 20237 Maximum deductible IRA contribution