Study Question of the Month – September 2016

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See the answer below!

This month’s study question from the Solomon Online Exam Simulator question database is now available!

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Question (Relevant to the Series 6, Series 7, Series 62, Series 65, Series 66, and Series 99):

A single 41-year old who earns $200,000 per year wants to convert his traditional IRA to a Roth IRA. Which of the following is the best answer?

A. He may not convert because his income exceeds the limit permitted for such conversions.

B. He may convert up to $5,500 per year.

C. He may not convert because he younger than 50.

D. He may convert without restrictions.

Answer: D. If your modified adjusted gross income is greater than $133,000 (single filer) or $194,000 (married filing jointly), then you may not contribute to a Roth IRA. However, there are no income or age restrictions on converting funds from a traditional IRA to a Roth IRA. A conversion from a traditional IRA to a Roth IRA is not counted as a “rollover” under the one per year rollover rule.

4 thoughts on “Study Question of the Month – September 2016”

  1. believe the answer is C as the cutoff for single younger than 50 is 182k/yr. The person may choose to move 5500 into a Roth IRA, but the money has to come out of their paycheck after taxes.

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