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Portfolios 204: Primer to Individual Retirement Accounts

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1.
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.
2.
A collection of valuable, vintage, handmade Elvis memorabilia is allowed as an IRA investment.
Choose wisely. There is only one correct answer.
False. Collectibles are not allowed as IRA investments.
3.
The traditional individual retirement account has all of the following characteristics except for ______.
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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.
4.
Capital gains on Roth IRAs are _________.
Choose wisely. There is only one correct answer.
Tax-free. As long as you meet the age and waiting-time requirements, dividends and capital gains are tax-free.
5.
In a _______ individual retirement account, the money you contribute to it has already been taxed.
Choose wisely. There is only one correct answer.
Roth. Your contributions come out of your net pay, meaning they have already been taxed.