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Certified IRA Services Professional Flashcards

7 cards from real IRA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.

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  1. A non-spouse beneficiary who inherited an IRA from someone who died in 2020 is generally subject to which distribution rule under the SECURE Act?

    Answer: 10-year rule

    The SECURE Act replaced the stretch IRA with the 10-year rule for most non-spouse beneficiaries of decedents dying after December 31, 2019.

  2. Which category of beneficiary is still permitted to use the life expectancy (stretch) method for inherited IRA distributions?

    Answer: Eligible designated beneficiaries (e.g., surviving spouse, minor child, disabled individual)

    Eligible designated beneficiaries (EDBs), including surviving spouses, minor children of the deceased, chronically ill individuals, and those not more than 10 years younger, may still use the stretch method.

  3. What is the annual IRA contribution limit for an individual age 55 in 2024?

    Answer: $8,000

    In 2024, individuals age 50 or older may contribute up to $8,000 to an IRA ($7,000 base + $1,000 catch-up).

  4. An individual has both deductible and nondeductible Traditional IRA funds. When they take a distribution, how is the taxable amount calculated?

    Answer: Pro-rata rule based on total IRA balances

    The pro-rata rule requires that each distribution be treated as coming proportionally from pre-tax and after-tax (basis) amounts across all Traditional IRAs.

  5. Which transaction allows an IRA owner to move funds directly from a Traditional IRA to a Roth IRA without the funds passing through the owner's hands?

    Answer: Direct conversion (trustee-to-trustee transfer)

    A direct (trustee-to-trustee) conversion moves funds directly between the custodians, avoiding the 60-day rule and withholding complications.

  6. A qualified charitable distribution (QCD) from an IRA must be made directly to a qualifying charity and is excluded from gross income up to what annual limit?

    Answer: $100,000

    IRA owners age 70½ or older may exclude up to $100,000 per year in QCDs from gross income (indexed for inflation starting 2024).

  7. Which of the following investments is explicitly prohibited inside an IRA under IRC Section 408?

    Answer: Collectibles such as artwork and antiques

    IRC Section 408(m) prohibits IRAs from investing in collectibles, including artwork, rugs, antiques, metals (with exceptions for certain coins/bullion), gems, stamps, and alcoholic beverages.