Justin Guy (just
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DC3 DC3 Quiz on Chapter 2 - Other Employer Situations, created by Justin Guy (just on 21/10/2015.

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Justin Guy (just
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Chapter 2 - Other Employer Situations

Question 1 of 15

1

All corporations are taxed on their earnings at the corporate level and not at the shareholder level.

Select one of the following:

  • True
  • False

Explanation

Question 2 of 15

1

A sole proprietorship files a separate tax return to report earned income.

Select one of the following:

  • True
  • False

Explanation

Question 3 of 15

1

A QSLOB who meets the different industries safe harbor will have met the administrative scrutiny test.

Select one of the following:

  • True
  • False

Explanation

Question 4 of 15

1

A sole proprietor’s earnings are reduced by 100 percent of the self-employment tax when determining earned income.

Select one of the following:

  • True
  • False

Explanation

Question 5 of 15

1

A multiple employer plan applies coverage testing under IRC §410(b) separately for each unrelated employer.

Select one of the following:

  • True
  • False

Explanation

Question 6 of 15

1

A multiemployer plan is maintained under a collectively bargained agreement between an employee organization and more than one unrelated employer.

Select one of the following:

  • True
  • False

Explanation

Question 7 of 15

1

An LLP may be a non profit organization.

Select one of the following:

  • True
  • False

Explanation

Question 8 of 15

1

The separate line of business must satisfy a 50-employee requirement, a notice requirement and an administrative scrutiny requirement to be a QSLOB.

Select one of the following:

  • True
  • False

Explanation

Question 9 of 15

1

Each QSLOB must be tested separately for all annual compliance testing.

Select one of the following:

  • True
  • False

Explanation

Question 10 of 15

1

A plan must satisfy the nondiscriminatory classification test on an employer-wide basis first before testing on a QSLOB basis.

Select one of the following:

  • True
  • False

Explanation

Question 11 of 15

1

All of the following statements regarding business entity types are TRUE, EXCEPT:

Select one of the following:

  • A. A sole proprietorship is an unincorporated business owned by only one person.

  • B. A partnership is an unincorporated business owned by more than one individual.

  • C. An LLP must be treated as a partnership for federal tax purposes.

  • D. S corporation income is taxed to the shareholders as if they were partners.

  • E. A C corporation is taxed as a corporation.

Explanation

Question 12 of 15

1

Based on the following information, determine the net earned income for Partner A:
• Partner A owns 30% of the partnership.
• The partnership has net income, before the profit sharing contribution, of $450,000.
• The partnership contributes $50,000 to the plan for non partner employees.
• Partner A’s self-employment tax is $9,000.
• Partner A receives a profit sharing allocation equal to 5% of compensation.

Select one of the following:

  • A. $105,714

  • B. $110,000

  • C. $114,286

  • D. $115,500

  • E. $120,000

Explanation

Question 13 of 15

1

All of the following statements regarding multiple employer plans are TRUE, EXCEPT:

Select one of the following:

  • A. The plan must apply the minimum age and service eligibility requirements as if each employer were participating in a single-employer plan.

  • B. The plan must consider each unrelated employer separately for purposes of coverage testing under IRC §410(b).

  • C. The plan must consider each unrelated employer separately for purposes of ADP testing.

  • D. Each employer must recognize service for vesting purposes without considering service performed for any other participating employer.

  • E. Annual additions attributable to any participating employer must be considered when determining an individual’s maximum annual addition.

Explanation

Question 14 of 15

1

All of the following statements regarding self-employed individuals are TRUE, EXCEPT:

Select one of the following:

  • A. A qualified plan may cover a self-employed owner as if that individual were an employee.

  • B. Compensation for plan purposes is W-2 wages.

  • C. Pre-tax elective contributions are included in compensation in determining the maximum deductible employer contribution under IRC §404.

  • D. A limited partner will not necessarily derive any earned income from a partnership

  • E. Earned income is not treated as currently available until the end of the taxable year.

Explanation

Question 15 of 15

1

All of the following safe harbor tests may be used to satisfy the QSLOB administrative scrutiny test, EXCEPT:

Select one of the following:

  • A. Mergers and acquisitions safe harbor

  • B. ADP safe harbor

  • C. Maximum or minimum benefits safe harbor

  • D. Statutory safe harbor

  • E. Industry segment safe harbor

Explanation

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