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Portfolios 204: Primer to Individual Retirement Accounts

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1.
Capital gains on Roth IRAs are _________.
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Tax-free. As long as you meet the age and waiting-time requirements, dividends and capital gains are tax-free.
2.
The party that holds funds you contribute to your IRA is called the collection agent.
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False. It is called the custodian.
3.
What is the name for the party that holds funds you contribute to your IRA?
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Custodian. When holding funds, the party is referred to as a custodian.
4.
You _______ take a tax deduction on the contributions you make to your Roth IRA.
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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.
5.
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.