FPQP Education Planning 1

Question 1

Which of the following accounts offers a tax-free growth and tax-free withdrawal benefit specifically for qualified education expenses?

Accepted Answer

529 Plan

Answer

529 plans provide tax-free growth and tax-free withdrawals when funds are used for qualified education expenses.

Question 2

A Coverdell Education Savings Account (ESA) allows annual contributions up to:

Accepted Answer

$2,000 per beneficiary

Answer

The annual contribution limit for a Coverdell ESA is $2,000 per beneficiary from all contributors combined.

Question 3

Which of the following is NOT a qualified education expense for a 529 plan?

Accepted Answer

Transportation to campus

Answer

Transportation costs are not considered a qualified education expense under 529 plan rules; tuition, fees, room/board, and required books are.

Question 4

The American Opportunity Tax Credit (AOTC) provides a maximum annual credit of:

Accepted Answer

$2,500

Answer

The AOTC provides a maximum annual credit of $2,500 per eligible student for the first four years of post-secondary education.

Question 5

Under the SECURE 2.0 Act, unused 529 plan funds can be rolled over to which type of account after 15 years?

Accepted Answer

Roth IRA

Answer

SECURE 2.0 allows rollovers of unused 529 funds to the beneficiary's Roth IRA after the account has been open for 15 years, subject to annual Roth contribution limits.

FPQP - Financial Paraplanner Qualified Professional Practice Test

FPQP - Financial Paraplanner Qualified Professional Practice Test

FPQP Education Planning 1