IRA Certified IRA Services Professional 2 — Questions and Answers
Question 1: An IRA owner who turns 73 in 2024 must take their first Required Minimum Distribution (RMD) by what deadline?
- April 1, 2025 (Correct answer)
- December 31, 2024
- April 15, 2025
- December 31, 2025
Correct answer: April 1, 2025
Under SECURE 2.0, the RMD beginning date is April 1 of the year following the year the owner turns 73.
Question 2: Which type of IRA contribution is made with after-tax dollars and grows tax-free?
- Traditional IRA
- Roth IRA (Correct answer)
- SEP-IRA
- SIMPLE IRA
Correct answer: Roth IRA
Roth IRA contributions are made with after-tax dollars, so qualified distributions are entirely tax-free.
Question 3: What is the maximum annual contribution to a SIMPLE IRA for an employee under age 50 in 2024?
- $7,000
- $16,000 (Correct answer)
- $23,000
- $69,000
Correct answer: $16,000
The 2024 SIMPLE IRA elective deferral limit is $16,000 for participants under age 50.
Question 4: Under the 60-day rollover rule, how many rollovers from the same IRA can an individual complete in a 12-month period?
- Unlimited
- One per IRA account
- One total across all IRAs (Correct answer)
- Two total across all IRAs
Correct answer: One total across all IRAs
Per the Bobrow ruling and IRS guidance, only one 60-day IRA-to-IRA rollover is permitted per individual across all IRAs in a 12-month period.
Question 5: Which of the following is NOT a qualifying reason for an early IRA distribution to avoid the 10% penalty?
- Permanent disability
- First-time home purchase up to $10,000
- Payment of college tuition
- Purchasing a vacation home (Correct answer)
Correct answer: Purchasing a vacation home
Purchasing a vacation home does not qualify as an exception to the 10% early distribution penalty.
Question 6: What is the IRS form used by IRA custodians to report IRA distributions to the IRS and the account owner?
- Form 5498
- Form 1099-R (Correct answer)
- Form 8606
- Form W-2
Correct answer: Form 1099-R
Form 1099-R is used to report IRA distributions, including rollovers and conversions, to both the IRS and the recipient.
Question 7: A Roth IRA conversion triggers which immediate tax consequence?
- 10% early distribution penalty on all converted amounts
- Ordinary income tax on the converted taxable amount (Correct answer)
- Capital gains tax on appreciation
- No immediate tax consequence
Correct answer: Ordinary income tax on the converted taxable amount
The taxable portion of a Roth conversion is included in ordinary income in the year of conversion.
IRA Certified IRA Services Professional 2
An IRA owner who turns 73 in 2024 must take their first Required Minimum Distribution (RMD) by what deadline?