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Portfolios 204: Primer to Individual Retirement Accounts

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1.
The traditional individual retirement account has all of the following characteristics except for ______.
Choose wisely. There is only one correct answer.
Contributions that are never tax-deductible. They can be if certain conditions are met. It is the Roth IRA whose contributions are never deducted from taxable income.
2.
You _______ take a tax deduction on the contributions you make to your Roth IRA.
Choose wisely. There is only one correct answer.
Cannot. You cannot take a tax deduction on your contributions, but when you withdraw the money for retirement, you also will not be taxed on that money.
3.
The contributions you make to a traditional IRA may be eligible for tax deduction.
Choose wisely. There is only one correct answer.
True. There may be limits on how much is deductible, but the eligibility exists in traditional IRAs.
4.
Which of the following may not be used to hold a Roth IRA?
Choose wisely. There is only one correct answer.
A collection of rare stamps. Collectibles are not allowed as Roth IRA investments.
5.
Which of the following is not allowed to fund an IRA?
Choose wisely. There is only one correct answer.
Cash value life insurance. Neither this nor collectibles are allowed as IRA investments.