Practice Test GeeksCTA - Certified Tax Advisor Practice Test
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Tax Planning and Strategy Flashcards

6 cards from real CTA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

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  1. Which retirement plan allows the highest annual contribution limit for self-employed individuals in 2024?

    Answer: Solo 401(k)

    A Solo 401(k) allows self-employed individuals to make both employee deferrals ($23,000 in 2024) and employer contributions, for a combined limit of up to $69,000.

  2. What is the purpose of a like-kind exchange under IRC Section 1031?

    Answer: To defer capital gains recognition when exchanging business or investment real property

    A Section 1031 like-kind exchange allows taxpayers to defer capital gains taxes by reinvesting proceeds from the sale of real property into similar real property.

  3. Which strategy allows high-income taxpayers to contribute to a Roth IRA indirectly by first contributing to a non-deductible traditional IRA?

    Answer: Backdoor Roth IRA

    The backdoor Roth IRA strategy involves making a non-deductible traditional IRA contribution and then immediately converting it to a Roth IRA.

  4. Qualified Opportunity Zone (QOZ) investments offer which tax benefit?

    Answer: Deferral and potential reduction of capital gains taxes, plus exclusion of gains from QOZ investment appreciation

    QOZ investments allow deferral of existing capital gains, a step-up in basis for long-held investments, and exclusion of gains on QOZ fund appreciation held over 10 years.

  5. Which of the following is a valid strategy to avoid the 10% early withdrawal penalty from a retirement account?

    Answer: Taking substantially equal periodic payments (SEPP) under Rule 72(t)

    Rule 72(t) allows penalty-free distributions from IRAs if payments are taken as substantially equal periodic payments based on life expectancy.

  6. A donor-advised fund (DAF) provides which tax planning benefit?

    Answer: Enables an immediate charitable deduction while granting investment control with grants made over time

    A DAF allows donors to take an immediate charitable deduction in the year of contribution while recommending grants to charities over future years.