- Eric, who is single and 34 years old, has a salary of $140,000 from Florida State University and earns $100,000 in self-employment income. How much of Eric’s income is subject to the additional Medicare tax?
|$240,000 (all income is subject to the additional tax if the taxpayer is over the threshold).|
On January 15, Year 1, Blake, a Senior Vice President for Acme Corporation, is granted 20,000 ISOs at an exercise price of $10. On February 6, Year 2, he exercises all his options when the price of Acme stock is $27. He sells the ISO shares three years later, when Acme stock is trading at $47 per share. What is his long-term capital gain per share?
Jacques is 62 years old, and his normal Social Security retirement age is 67. If he retires today, and his normal age retirement PIA is $2,000, how much can Jacques expect to receive as a monthly retirement benefit?
Jack and Jill are married and file their income tax return jointly. Jack is a senior engineer with a salary and bonus of $180,000. Jill is an HR executive earning $190,000. How much of their income is subject to the additional Medicare tax?
ISOs are a common benefit for executives. Which of the following statements is NOT correct regarding ISOs?
|ISOs can only be granted to an employee of the corporation issuing the ISOs.|
|The exercise of the ISO is limited to a 10-year period.|
|To the extent that the aggregate fair market value of stock with respect to which ISOs are exercisable for the 1st time by any individual during any calendar year exceeds $100,000, such options shall be treated as NQSOs.|
|To qualify as an ISO, the executive must hold the stock for either two years from the grant of the ISO or one year from the date of exercise of the ISO.|
Hiral is 62 years old, and his normal Social Security retirement age is 67. He plans on waiting to collect his benefits until he is 70 years old. If he waits until age 70, and his normal age retirement PIA is $2,000, how much can Hiral expect to receive as a monthly retirement benefit at age 70 (without regard to any COLA)?
On January 15, Year 1, Blake, a Senior Vice President for Acme Corporation, is granted 20,000 ISOs at an exercise price of $10. On February 6, Year 2, he exercises all his options when the price of Acme stock is $27. When can Blake sell the ISO shares and avoid a disqualifying disposition?
|January 16, Year 3.|
|January 16, Year 4.|
|February 7, Year 3.|
|February 7, Year 4.|
Blake was awarded 1,000 shares of restricted stock of Acme Corporation at a time when the stock price was $7. Assume Blake properly makes an 83(b) election at the date of the award. The stock vests 3 years later at a price of $19 and Blake sells it then. What are Blake’s tax consequences in the year he sells the stock?
|Blake has W-2 income of $19,000.|
|Blake has a long-term capital gain of $12,000.|
|Blake has W-2 income of $12,000.|
|Blake has a $19,000 long-term capital gain.|
Bill is single, retired, and received Social Security retirement benefits of $28,000 this year. His other income consists of his monthly $5,000 pension payment from his prior employer; $5,000 in tax-exempt municipal bond interest; and $1,000 in dividends. How much of Bill’s Social Security Benefit will be subject to income tax?
Non-qualified deferred compensation plans often use life insurance for funding within the plan. Why is this?
|Life insurance investment products typically have higher returns.|
|Life insurance products have tax advantages.|
|Life insurance is provides an additional layer of avoidance for constructive receipt.|
|Life insurance limits the liability of the company sponsor for the NQDC plan.|