Retirement
A type of profit sharing plan that have the added feature of allowing employees to voluntarily contribute a portion of their salary for retirement on a pre-tax, payroll deduction basis.
401(k)
The tax penalty for early withdraw from an IRA
10%
A trust that cannot be change and the assets held are not included in the grantor's estate.
Irrevocable Trust
This document, filed with a state or local agency, created a Limited Partnership.
Certificate of Limited Partnership
The limit for each UGMA/UTMA account.
One custodian and one minor
*When account opens, minor's ssn is used, when the minor reaches of majority the custodian must transfer the account to the new adult's name
A tax-deferred retirement plan that may only be established by certain tax-exempt, non-profit organizations, such as churches and public school systems.
403(b)
Roth IRA
A trust created during the grantor's lifetime, and is Latin for "between the living"
Inter Vivos Trust
This business allows for managerial control, but comes with unlimited personal liability.
General Partnership
JTWROS- Joint Tenants with Rights of Survivorship
A retirement plan restricted to individuals who are self-employed; has additional income through self-employment, but contributions are limited only to the income from self-employment. The employer who established this plan must also include any employees who are 21 or older and have been employed for more than 12 months.
Keogh (HR-10) Plan
The document that describes a retirement plan's investment strategy as well as the specific needs of the plan.
Investment Policy Statement
A trust that provides the granter with the ability to alter or terminate the trust and reclaim the assets.
Revocable Trust
C Corporation
In this joint account, where one owner dies, that person's portion of the account reverts to her estate.
JTIC- Joint Tenants in Common
In this retirement vehicle, employer's contributions are based on a fixed percentage of the employee's salary.
Money Purchase Plan
1. The shifting of funds from one IRA trustee to another trustee.
2. Tax-free withdrawal of cash or other assets from an eligible plan retirement plan.
1. Transfer (no limit to this)
2. Rollover (allowed only once a year)
Since the trust is taxed, rather than the trustee, this is the form that trustees file for tax purposes.
Form 1041
This corporation avoids corporate taxation by passing their income, losses, deductions, and credits to their shareholders, and is limited to only 100 shareholders.
S Corporation
The person who is ID'd in the decedent's will to be in charge of administering the estate, paying all the applicable taxes, and distributing the assets to the decedent's heirs.
Executor
The only three investment options for 403(b) plans.
1. Annuity contracts
2. Custodial accounts holding mutual fund shares
3. Retirement income accounts (defined contribution plans)
If, at the time of death, the owner had not yet reached his required beginning date, this is the difference between a spouse and another beneficiary inheriting an IRA
A spouse may postpone payments until the decedent would have reached age 70.5
The non-spouse beneficiary must begin withdrawals immediately based on the owner's life expectancy or the beneficiary's life expectancy-whichever is longer.
A complex trust can perform these functions
making tax-deductible contributions to charities and retaining income that is generated by the trust
This corporation is treated like a partnership for tax purposes, and has a more flexible management structure and easier to establish compared to a C Corp.
Limited Liability Company (LLC)
The exclusion limit to avoid estate taxes levied on an heir's inherited portion of an estate, and the exception to this limit
The exception being the surviving spouse (unlimited marital deduction)